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Iraq is a tangled web of competing demands

Iraq's prime minister Maliki has, so far, pulled off a delicate balancing act, juggling the competing demands of the country's ethnic groups, writes Kirk Sowell. But for how much longer?

Iraq's prime minister Nuri al-Maliki has had a steady mantra over the past two years - the need for a "majority government" uniting Iraqis from across the country's three main ethnic groups: the majority Shia and minority Sunni and Kurds. The slogan has replaced one that defined the government formed in December 2010, that of "partnership government". While a patchwork of agreements with rivals secured Maliki's re-election three years ago, it also saddled him with a government that almost immediately became unwieldy and whose failures he attributed to having ministers who, believing themselves really to be in opposition to him, weren't working as a team.

Maliki's aim has been to reduce his political dependence on the Kurds, who have often held the balance of power in parliament, and hostile elements of the cross-sectarian but predominately Sunni Arab Iraqiya coalition, which won a narrow plurality in the 2010 elections. On the Baghdad-Erbil front, several summit agreements between Maliki and the Kurds have been punctuated by long periods of standoff, resulting in a breakdown in oil exports from the Kurdistan region. Iraqiya, which is nominally headed by Iyad Allawi, a former prime minister, has splintered, with the largest part, headed by parliamentary speaker Osama al-Nujayfi, siding with the Kurds. A smaller group, headed by deputy prime minister Salih al-Mutlak, has aligned with Maliki based on a centralist, Arab nationalist line. Allawi, however, lives abroad, and is now a marginal player.

The content of Maliki's alternative majority government has gradually shifted. In 2010 it appeared that it might draw together Maliki, the Kurds and some other Arab factions. But that was when the extension of the US troop presence was the core issue and Maliki-Kurd relations were held together by a stop-gap agreement between Maliki and then-Kurdistan Regional Government (KRG) prime minister Barham Salih to pay the expenses of oil companies under contract with the KRG. But the Maliki-Salih agreement has broken down, and the withdrawal of US troops deprived the two sides of their last point of political common ground.

Since late 2010, Maliki's priority has been to build a centralist, Arab nationalist coalition. The cause of the deterioration in the Maliki-Salih agreement is disputed, with Erbil blaming Baghdad for not making payments and Baghdad claiming the KRG failed to present the proper paperwork. The most likely source of the rift was the breakdown of deputy prime minister for energy affairs Hussein al-Shahristani's signature blacklist policy. The policy was designed to stop companies from signing contracts with the KRG by threatening to bar them from doing business elsewhere in Iraq. It came to a head with the KRG's groundbreaking October 2011 agreement with ExxonMobil, which two years earlier had signed a deal with Baghdad for the super-giant West Qurna-1 oilfield development in the south. Starving the KRG of cash became Baghdad's fallback position.

Yet Iraq has undergone two political ruptures in the past six months and these have upended Maliki's majority government plans. One is the Sunni protest movement, which erupted in late December 2012. The other was the disappointing showing of Maliki's party in this year's provincial elections, held on 20 April.

Two separate events ignited the protests in Sunni Arab provinces last December: in Anbar, the arrest of aides to then-finance minister Rafia al-Isawi and legal threats against him personally; and, in Ninawa, an inflammatory incident involving the rape of a local girl by a military officer. The protests first spread to all Sunni Arab areas, but have since evolved from demands relating to better treatment by the security services to calls for an autonomous Sunni region, like the KRG, complete with its own independent security force. The protests have now taken a hard anti-Maliki edge. Parliamentary speaker Nujayfi's Mutahidun electoral bloc, which backs this regional agenda, helped organise the protests in the beginning, but at this point the ostensibly popular movement and Nujayfi's political coalition have largely converged.

Maliki retains some Sunni allies - aside from Mutlak, he is also on good terms with the recently re-elected governor of Salah al-Din, Ahmad Abdullah al-Jiburi. Nonetheless the nearly relentless anti-Maliki rhetoric in Sunni media, combined with the parliamentary elections that saw a majority of Sunni votes back Nujayfi's Mutahidun bloc, has undermined the Sunni Arab plank of Maliki's presumed majority government.

Criticism

After initially threatening to suppress the protestors with force, Maliki came under criticism from Shia religious authorities. He began to implement prisoner releases and ultimately reached a deal with Mutlak, who is from Anbar, to make sweeping reforms to laws affecting former members of the Baath Party, the predominately Sunni organisation that ruled under Saddam Hussein, in exchange for a statute formally banning Baath activities. The measures satisfied neither the protesters - who have sought a total repeal of the de-baathification policy that banned former party members from any position of authority - and many Shia, who viewed it as providing a way for the Baathists to get back into government. Maliki's Shia rivals used the issue against him in the provincial elections campaign.

This was the environment in which elections took place in April. Despite having brought other Shia parties under the umbrella of Maliki's State of Law Coalition (SLC), the SLC received short of 34% of Shia seats - far worse than his party fared in previous elections. Other Shia groups, including the Islamic Supreme Council of Iraq (ISCI) and the Sadrists, also fared worse. The gap was filled by an increase in seats won by small parties across provinces. So it is hardly clear that the Shia leg of Maliki's majority government stool is stable either.

The now six-month long absence of Iraq's president Jalal Talabani, a widely respected Kurdish leader, following his stroke last December has not helped matters, although despite his conciliatory personality his presence would not likely change much. His Patriotic Union of Kurdistan (PUK) is heavily dependent on Iran financially, and the PUK's leadership will remain the lynchpin of the much-tested Shia-Kurd alliance. The fate of the country will be primarily determined by the power struggles among Shia and Sunni Arabs.

What does all this mean for Iraq's oil sector?

Basra has experienced a shake-up in political leadership following the elections, but the province that produces over 90% of Iraq's oil is unlikely to see radical change. Basra's new governor, elected on 12 June, is Majid al-Nasirawi of ISCI. The former governor, Maliki-ally Khalaf Abd al-Samad Khalaf, settled for the council chairmanship when other parties cooperated to outvote the SLC plurality. Nasirawi is a long-time ISCI cadre and was the head of the party in Basra during Khalaf's period in office. Although ISCI officials in Basra have been critical of the federal government's often unilateral development policies, Khalaf himself has as well, and both seem to reflect local opinion that the province provides the country's wealth and is mistreated in return.

Shahristani, who unveiled a new Comprehensive National Energy Strategy on 12 June, could be adversely affected by the continued loss of support for Maliki's bloc, of which he is part. Shahristani is often a target of criticism both for his perceived high-handedness in dealing with provinces on oil policy, as well as for failures in electricity provision, which is also part of his portfolio. In June, protestors in Dhi Qar personally targeted him for these failures.

Yet while both ISCI and the Sadrists have criticised Shahristani's insistence on an oil law that concentrates power in the Ministry of Oil - supporting instead a version of the oil law that would shift power to a national oil commission - there is little disagreement among Shia on development per se. The Sadrists do have it out for Shell's gas operations in Basra - Sadra's parliamentary leader, Baha al-Araji, recently launched a diatribe on national television against the "Jewish-owned" Dutch company - but this is a minority obsession.

Even under the worst-case scenario, in which a renewed insurgency leads to national partition, Basra and other core potential resource areas in the Shia south - Maysan, Dhi Qar and Wasit - would not likely be affected. Maliki and his allies mention the possibility in interviews from time to time as a kind of threat - they want to keep Iraq together, but if it takes place, the Shia provinces will be self-sufficient.

Kurdistan is another matter. Maliki's 9 June visit to Erbil and warm press conference with KRG President Mahmud Barzani has generated some optimism about Baghdad-Erbil relations. They confirmed a preliminary agreement reached between Maliki and KRG prime minister Necherivan Barzani during a recent visit to Baghdad, but the deal, such as it is, appears to be little more than a renewed effort to establish working committees to reach real agreements on matters of dispute, not a real agreement on any substantive issue.

Kurds and Kirkuk

A better indication of the direction of events comes from Kirkuk and other disputed territories along the Arab-Kurd ethnic borderline. Tuz Khurmatu, in Salah al-Din, is a heavily Kurdish and Turkoman area of the province sandwiched between Sulaymania, in Iraqi Kurdistan, and Kirkuk. In June over 1,000 Kurdish soldiers stationed there for the federal army defected to the KRG after Maliki ordered them to leave the area. They knew Arab units would replace them.

In Kirkuk, the KRG and the city's governor Najm al-Din Karim, a senior member of the PUK, are implementing measures to ensure that core geographic areas are "Kurdistani" - meaning part of the Kurdish region - and not just Kurdish. The KRG's peshmerga, or army, took over perimeter areas around the city when Iraqi forces withdrew in April to deal with Sunni insurgents. The peshmerga are now pushing forward with a controversial security trench along Kirkuk city's southwest border, separating it from homogenous Arab Huwija. On 30 May, the province approved a further measure giving unregistered Iraqi migrants to the city - meaning Arabs - 21 days to leave. Many Arabs call the measures ethnic cleansing, although Kurds frame them as reversing the Arabisation policies of the Baath. Iraqi Kurdistan's present borders, set by the Treaty of Sevres in 1920, were always artificial, and the Kurdish leadership seems determined to give the return of history a guiding hand.

Future development in the Kurdish demographic zone follows from separate dynamics inside and outside the KRG. Within the KRG, full resource exploitation faces two hurdles. One is the logistical obstacle of building the necessary infrastructure to export directly through Turkey. This is underway. The KRG claims a 300,000 barrels a day (b/d) pipeline to Turkey will be on stream by September and capacity will rise to 1m b/d by 2015 and 2m b/d by 2019. Assuming Turkish policy remains steady, the KRG's economic independence is a matter of time.

The second, often less appreciated obstacle is internal Kurdish division. While Barzani and his Kurdistani Democratic Party (KDP) have latched their fortunes to an alliance with Turkey - becoming a commercial and military protectorate of the New Ottomans - Talabani and the PUK, along with the main opposition party, Gorran, are strongly opposed. PUK leaders' pronouncements tend to reflect Tehran's priorities as faithfully as those of any Shia Islamist, and only dominance by Barzani within Kurdistan, or perhaps a Turkey-Iran rapprochement, can settle the issue.

Alternatively, Baghdad and Erbil could resolve their differences, enabling the Kurds to export resources through established channels, including the Kirkuk-to-Ceyhan pipeline, which before war and saboteurs affected its operations had capacity of 1.6 million b/d. (Flows through the pipeline are thought to be about a third of that level now and attacks on the infrastructure frequently interrupt it.) But such an outcome requires the existence of facts not in evidence now.

Kirkuk's future is more determined by whether Kurdistan's likely eventual split from Iraq takes place in the context of a negotiated settlement, ethnic war, or national partition. A negotiated settlement would naturally be the best option, and would rebound strongly to the benefit of those invested in the area. But neither side is doing anything to prepare its own public for the compromises necessary for such a settlement.

The second possibility, ethnic war, could happen if both Maliki and Barzani succeed in their respective struggles. If Maliki can keep Arab Iraq together, no elected Arab prime minister is likely to surrender Kirkuk. Vocal criticism by Shia authorities in Najaf of Maliki's military mobilisation against the Kurds last fall makes it impossible for Baghdad overtly to advocate war. But given strong tensions in Arab areas, this would not prevent the incidence of unplanned conflict.

Partition, another possibility, would leave the Kurds in control of Kirkuk, and further development delayed. The Kurds would have the advantage in superior organisation and, on this issue, complete unity, and would presumably take over all districts which are not homogenously Arab. Conflict would put any oil producing areas - including the giant field in Kirkuk, believed to hold 10bn barrels of oil and for which BP and Baghdad have discussed a contract to lift output from 260,000 b/d to 600,000 b/d - offline for years. Eventually, though, if Barzani's alliance with Turkey works out, we should expect the disputed areas to become a fully integrated part of semi-independent Kurdistan.


Kirk H Sowell is a political risk analyst based in the Washington DC area and the editor of Inside Iraqi Politics

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