Can Kurdistan Sustain Independence?
The Prime Minister of Israel has in the past called for an independent Kurdish state and his new Justice Minister, Ayelet Shaked, as well as a former Major General in the IDF, Amos Yadin, said recently that it was time for Kurdish independence and time for Kurdistan and Israel to join together. This relationship is natural, two peoples who have borne the brunt of hatred and the brutality of genocide. Both living in an area where they in fact have no friends or natural allies. Currently there is a rise in radical Islam and terrorism that is supported by the enemies of both people. The President of the KRG has been in discussions with the parties that make up the government of the Kurdish region and it looks like a referendum on independence is forthcoming. There are however difficulties that must be surmounted, the greatest is economic.
The main difference is that Israel has a thriving economy with access to the world and the Kurdish region is a rentier state with oil as its sole source of revenue. Should the Kurds in Iraq develop other sources of revenue, obstacles still remain, getting the product to market being the main problem. Even as an oil exporter it is reliant on the good graces of Turkey to allow the oil to flow. It is therefore incumbent on the KRG to build and maintain a solid relationship with Turkey.
The current alternative to Turkey is to combine oil from Kurdish fields with Iraq and accept Iraqi accounting to receive the 17% revenue as stipulated in the law. This has not been a workable solution in the past and under current conditions will likely not be viable. Baghdad is under the control of Iran, which can now pump and export its own oil and can do so cheaply. ISIS is still in control or can threaten a large section of the region which impacts oil production. Turkey is at war with its own Kurdish population and continues to attack the Syrian Kurdish population. Syria is in civil war, and what’s left is in a war against ISIS. Add Russia to the mix, which has its own oil export problems and you can see the difficulty exporting oil will be come.
So what happens to an independent Kurdistan? Israel said it must help support the Kurds but how? What will the US and EU do in the event of independence? The two potential responses are remaining a part of Iraq and hope for the best or declare independence and hope for the best. An independent Kurdistan will be more dependent on Turkey than it currently is. Expanding the borders to include that part of Syria that is Kurdish may expand economic opportunities, but will not grant access to the sea unless it is expanded to Latakia and that is a bridge too far. Of course there is always including a portion of Turkey into the new Kurdistan but that will cause a major war in the region which the Kurds cannot win.
There has been much discussion and even rioting over the financial situation in the KRG. The question is what to do about it. There is no easy answer to this question. The KRG is in desperate straits, dependent on oil in a world of falling oil prices and a global glut, the KRG needs to look at other means of revenue generation. The region is also at war with ISIS which is costing the Kurds what little cash they have on top of being unable to pay public employees.
Construction and construction materials have been a past staple of the region as has been agriculture. Manufacturing is also a potential avenue of revenue generation if the KRG can entice foreign capital into the region. Banking is also a potential industry, could Erbil become the new Switzerland. This of course is all in the future. For the time being two things are certain, the region needs an influx of money from the rest of the world and the KRG needs to maintain good relations with Turkey. The other problem for the region before any foreign non-governmental help will flow in, is the security situation. Turkey, ISIS and Iran have made the region volatile and business does not respond to this well.
So the question is, will Kurdistan be better off independent or remaining a part of Iraq? As stated before Iraq is a failed state and at best the Kurdish region could become a separate entity under some form of a federated Iraq. This is not the best option as the Kurds are a separate people from the Iraqis of the Sikes-Picot era. At the end of the day it will be up to the Kurdish people to determine if they can live as one in an independent country. It will be up to the Kurdish people how large that country will be. It will be up to the Kurdish people and the government to make sure they will build a viable economy. But it will be up to the rest of the world to ensure that the new country gets to come into existence, just like Israel. A referendum is just a start it needs to be accepted by major powers. The first two nations to recognize Israel were the United States and the Soviet Union. It will come down to seeing if the Kurdish politicians and diplomats are as brave as the Peshmerga.
Paul Davis is a retired US Army military intelligence and former Soviet analyst. He is a consultant to the American intelligence community specializing in the Middle East with a concentration on Kurdish affairs. Currently he is the President of the consulting firm JANUS Think in Washington D.C.
The main difference is that Israel has a thriving economy with access to the world and the Kurdish region is a rentier state with oil as its sole source of revenue. Should the Kurds in Iraq develop other sources of revenue, obstacles still remain, getting the product to market being the main problem. Even as an oil exporter it is reliant on the good graces of Turkey to allow the oil to flow. It is therefore incumbent on the KRG to build and maintain a solid relationship with Turkey.
The current alternative to Turkey is to combine oil from Kurdish fields with Iraq and accept Iraqi accounting to receive the 17% revenue as stipulated in the law. This has not been a workable solution in the past and under current conditions will likely not be viable. Baghdad is under the control of Iran, which can now pump and export its own oil and can do so cheaply. ISIS is still in control or can threaten a large section of the region which impacts oil production. Turkey is at war with its own Kurdish population and continues to attack the Syrian Kurdish population. Syria is in civil war, and what’s left is in a war against ISIS. Add Russia to the mix, which has its own oil export problems and you can see the difficulty exporting oil will be come.
So what happens to an independent Kurdistan? Israel said it must help support the Kurds but how? What will the US and EU do in the event of independence? The two potential responses are remaining a part of Iraq and hope for the best or declare independence and hope for the best. An independent Kurdistan will be more dependent on Turkey than it currently is. Expanding the borders to include that part of Syria that is Kurdish may expand economic opportunities, but will not grant access to the sea unless it is expanded to Latakia and that is a bridge too far. Of course there is always including a portion of Turkey into the new Kurdistan but that will cause a major war in the region which the Kurds cannot win.
There has been much discussion and even rioting over the financial situation in the KRG. The question is what to do about it. There is no easy answer to this question. The KRG is in desperate straits, dependent on oil in a world of falling oil prices and a global glut, the KRG needs to look at other means of revenue generation. The region is also at war with ISIS which is costing the Kurds what little cash they have on top of being unable to pay public employees.
Construction and construction materials have been a past staple of the region as has been agriculture. Manufacturing is also a potential avenue of revenue generation if the KRG can entice foreign capital into the region. Banking is also a potential industry, could Erbil become the new Switzerland. This of course is all in the future. For the time being two things are certain, the region needs an influx of money from the rest of the world and the KRG needs to maintain good relations with Turkey. The other problem for the region before any foreign non-governmental help will flow in, is the security situation. Turkey, ISIS and Iran have made the region volatile and business does not respond to this well.
So the question is, will Kurdistan be better off independent or remaining a part of Iraq? As stated before Iraq is a failed state and at best the Kurdish region could become a separate entity under some form of a federated Iraq. This is not the best option as the Kurds are a separate people from the Iraqis of the Sikes-Picot era. At the end of the day it will be up to the Kurdish people to determine if they can live as one in an independent country. It will be up to the Kurdish people how large that country will be. It will be up to the Kurdish people and the government to make sure they will build a viable economy. But it will be up to the rest of the world to ensure that the new country gets to come into existence, just like Israel. A referendum is just a start it needs to be accepted by major powers. The first two nations to recognize Israel were the United States and the Soviet Union. It will come down to seeing if the Kurdish politicians and diplomats are as brave as the Peshmerga.
Paul Davis is a retired US Army military intelligence and former Soviet analyst. He is a consultant to the American intelligence community specializing in the Middle East with a concentration on Kurdish affairs. Currently he is the President of the consulting firm JANUS Think in Washington D.C.