war on the rocks

America’s Opportunity in Iraq is Ready to Be Seized

October 18, 2017

The American contribution to the defeat of the Islamic State (ISIL) has given Washington a new prestige in Iraq. Indeed, the United States has an extraordinarily favorable image in Baghdad. It is hard to overstate the significance of what Iraq has accomplished in the past three years, and most Iraqis understand the key role the United States played.

Iraq has liberated virtually all of its terrain from the Islamic State, stabilized its economy, added over one million barrels per day in oil production in the southern fields, kept human rights abuses at surprisingly low levels, avoided large-scale communitarian violence, and now made important strides in stabilization and reconciliation.

But progress in Iraq is fragile. A national election scheduled for April of next year will be critical in determining the future of this vital U.S. ally.

Led by former Prime Minister Nouri al Maliki, the Iranian-leaning opposition to Haider al Abadi, Iraq’s westward looking prime minister, has been banging the war drums over the Kurdish issue. Abadi has decisively responded to this pressure by seizing — with remarkable speed — federal installations in and around the disputed city of Kirkuk. There will be a lot of noise, and likely some minor clashes, associated with the matter over the short term, but Iraq’s political system is far too mature and pragmatic for this to lead to any serious conflict.

Thus, America’s goals in Iraq over the critical six-month period leading up to April’s vote should be to persuade both sides in the Baghdad-Kurdistan dispute to avoid further conflict for now while Washington helps Abadi to deliver election-winning progress on growth, services, and security.

If the United States can bring the Iraqis and Kurds towards a “grand bargain” that helps to further reduce Iranian influence, so much the better. Meanwhile, there is much else Washington should be doing as the April election looms. The main areas the United States must focus on are security, the economy, post-ISIL reconciliation and reconstruction, and the Kurdish issue.

Security

There are two distinct, but intertwined security issues in Iraq: The first is the proliferation of militias and sub-state forces in Iraq, despite Baghdad’s attempts to regularize them. The second is the continuing weakness of the federal security forces. There are some capable forces in the latter, especially the Counter-Terrorism Service (or “Golden Brigade”) and to a lesser extent the 9th and 16th Army divisions and the Interior Ministry Emergency Response Division. In general, however, Iraq’s forces are not yet ready to provide the security required in the post-conflict environment of the liberated territories, let alone defend the national borders.

In the short term, Baghdad will have to accept, while also trying to limit, the presence of militias of all flavors. This will include Arab Shi’a “Hashd,” both of the Tehran-influenced and Najaf-Karbala influenced flavors. Sunni militias, reporting to a host of political and tribal figures, are a part of the mix. Kurdish peshmerga, from both the Barzani-led Kurdistan Democratic Party (KDP) and Talibani-led Patriotic Union of Kurdistan (PUK, in addition to a smaller faction backed by Turkey’s Kurdish Worker’s Party (PKK) rebels, will continue to play a defensive role. Each of the minorities—Turkomen (in Shi’a and Sunni factions), Yezidis, Shabaks, and Christians—will all have at least a defensive capability, if not the ability to carry the fight elsewhere. All of these groups will also be deeply splintered between multiple local and regional interests.

The answer to Iraq’s militia problem is a “two birds, one stone” solution. Washington, as long as U.S. allies dominate the Baghdad government, should remain committed to building Iraq’s security forces and improving their capabilities so long as the Iraqis stay out of the three Kurdish provinces. The broader Iraqi public tolerates the militias largely because of security gaps. Admittedly, some militias, in particular those backed by Iran, have aggressive agendas that go beyond local security concerns.

As Iraq’s army and police forces continue to improve under U.S. tutelage, they will be able to expand Bagdad’s reach into these communities on a consistent basis, providing the security that citizens expect from their state, and making the militias superfluous to local communities and harder for their sponsors to defend. Continuing and even deepening the U.S. training mission is clearly in the best interest of both states, and should be a top U.S. policy priority.

Economy

There are important ways in which Iraq’s economy is a success story. Iraq has had a challenging recent past, fighting a three-year war against ISIL during a deep depression of oil prices. The country has nonetheless maintained a strong currency, continued to service its debts, entered a stand-by agreement with the International Monetary Fund, and increased its oil production by about 25 percent, all while fighting the Islamic State. These are significant accomplishments that should not be overlooked.

However, in the larger sense, the economy continues to face challenges. Iraq’s oil ministry is technocratic and clean, and Abadi, unlike his predecessor al Maliki, is no kleptocrat. But the broader Iraqi state is bedeviled with corruption and its economy suffers from an over-reliance on the oil sector. From the monthly food basket that every Iraqi family receives to the onerous paperwork required to start a business, the Saddam-era administrative state reaches into far too much of economic life. The country’s under-developed financial institutions and markets are largely disconnected from the larger world system. Here again, the United States should be the indispensable ally, providing technical assistance while serving as an advocate for Iraq with institutions such as the International Monetary Fund and World Bank, as well as with other important countries.

Further, the United States should encourage the Iraqis to make the most of their massive oil resources in southern Iraq, right now in their time of need. There are two main ways to do this. First, Iraq should improve the performance of its fields by upgrading from service contracts to production sharing agreements with the major oil companies, incentivizing the global oil sector to surge technology and investment to the Iraq oil fields. Second, Iraq could also consider preparing an initial public offering of a national oil company on the model of the upcoming Saudi ARAMCO offering. Selling a 5 or 10 percent share to the international market, and allocating a similar share to the Iraqi public, could raise tens of billions of dollars while introducing welcome transparency, accountability, and stakeholdership among the Iraqi people.

Neither of these options has been politically palatable in the past, but today’s circumstances may well provide an opening.

Reconstruction

Stabilization in the wake of a traumatic event like the Islamic State’s occupation and the war to eject them is incredibly complex, but some of the basic building blocks are simple. Infrastructure needs to be restored and conflict resolution mechanisms put in place. Iraq is making significant steps in both, with the help of the United Nations in the first case, and the U.S. Institute of Peace in the second. This is not to deny that the magnitude of both problems seems overwhelming. As I wrote in this forum in 2015, and as The Washington Post echoed over a year later, ISIL has been devastating for Iraq’s Sunnis in terms of wealth, health, infrastructure, reputation, education, culture, and political power.

For the subjects of Islamic State’s genocides—the Yezidis and the Assyrian Christians, mostly—it is not clear that their communities will be able to fully regenerate at all. Recovery, if it happens, will be a generational task. It is far from clear from where Iraq will get the funds required (short of leveraging future oil revenues) to deal with the multiple demands. But nonetheless, there are good-faith efforts in place to mitigate the worst and most looming crises.

The Kurdish Issue

The main recent development leading to the recent frictions with the Kurds has not been the referendum. As an exercise in symbolism, this poll told the world nothing it did not already know about the dreams of independence in just about every Iraqi Kurdish heart. Rather, the driving development has been the emergence of the Kurdish issue as a key factor in Iraq’s intensifying 2018 electoral race, something the referendum merely amplified.

In the summer of 2014, the Kurds took advantage of the ISIL crisis to seize territory in the Iraqi provinces of Nineveh, Salahaddin, Kirkuk, and Diyala. The Kurds appear still to be— as of this writing — holding territory in all four of these Iraqi provinces, despite Abadi’s recent reclamation of federal assets and land from the Syrian border in the west to the Iranian frontier in the east.

Maliki, currently the principal Iranian client in Iraqi politics, had been beating nationalist drums over the issue, forcing Abadi to get tough on the Kurds in order to cover his “right flank” in the electoral build-up. Abadi’s successful moves over the last few days will likely deliver the election to this strong American ally and deserve to be welcomed in Washington.

Without Washington’s approval, the leaders of Iraqi Kurdistan will not make any sudden dash for independence. This is a landlocked piece of territory that requires the support of Iran, Syria, Turkey, or Baghdad to have any kind of access to the wider world. Kurdish leaders in Iraq would be far too weak and isolated to survive without a major sponsor, which is why the Kurds have spent considerable energy lobbying in Washington.

Meanwhile, a new Kurdish state would not be the guaranteed American ally that the Kurds’ many Washington lobbyists promise. Half the region belongs, so to speak, to the Turkey-aligned Barzani family and their KDP party. The other half until recently belonged to the Iranian-aligned Talabani family and their PUK. With the recent death of long-time leader Jalal Talabani, the PUK machine has split into three factions. Meanwhile, an armed border separates the two parts of Iraqi Kurdistan. The internal politics of the region are vastly more complex and fraught than Barzani’s U.S. lobbyists would have people believe.

What should Washington do? Is there a case for American support for Kurdish independence? Maybe, but there must be two conditions for any such support.

First, Iraq would have to agree to it. New statelets cannot succeed without the acceptance of the original sovereign. They cannot have international air travel, for example, or insure their export pipelines or obtain letters of credit for their imports, nor can they work with international organizations like the World Bank, International Monetary Fund, or United Nations. (The Palestinian Authority’s “non-member observer” status at the United Nations is the main exception to this type of scenario.) An Iraqi Kurdistan that looked like Montenegro — a viable and fully sovereign new country trading peacefully with its neighbors — would be fine from America’s perspective. Trans-Dniestria-on-the-Tigris — bereft of international recognition and excluded from world trade and institutions — would not.

Second, an independent Iraqi Kurdistan cannot be allowed if it means losing Iraq to Iran. A pro-U.S. Iraq is far more important to U.S. interests than anything Kurdistan can provide, especially if it is to be isolated by its neighbors. Iraq is large, rich, free, and growing. Iraqi Kurdistan is small and economically struggling after years of disappointing oil exploration and centralized economic control. Iraq’s political system is resilient, thanks mostly to a high degree of accountability and choice, as evidenced by a string of successful elections fought by dozens of parties since 2005. Kurdistan’s ruling families have their hands full with a seething populace that could erupt in a Kurdish Spring at any moment.

It would not make sense to swap a more solid and valuable ally for a weaker and less consequential one. But there is — perhaps — a way to make Kurdish independence a win for the United States, giving Washington two allies where previously it had one. The Kurds want statehood, and the Iraqis want wealth and stability.

Most Iraqis, including top politicians, do not these days feel strongly enough about the three Kurdish provinces to pay any serious price to keep them. Kurdistan is simply not a major part of the rising national sentiment that is one of the strengths of today’s Iraq. This is due to many factors, the most obvious being a fraught history that has driven two groups that once had much in common further apart. This is evident in ways large and small, such as the inability of most Kurdish youth to speak Arabic, in stark contrast to older generations. A divorce between Iraq and its Kurdish north would benefit the southern 15 provinces economically. With its stronger oil sector, Arab Iraq would be a net winner from ending the current population-based sharing of oil revenues with Kurdistan.

Abadi’s reassertion of federal authority in the four Iraqi provinces over recent days has been swift, relatively bloodless, and highly effective. This restoration of the constitutional order, effectively the “status quo ante ISIL,” now sets the stage for a relatively clean negotiation on the status of the three provinces of Iraqi Kurdistan proper. The United States must devote significant diplomatic resources to driving these talks, as long as both sides want them to happen.

There is a positive bargain to be had, under U.S. leadership: The Kurds would receive independence and in return relinquish any remaining Iraqi territory seized in 2014. This would involve just enough pleasure and pain on both sides to be workable. The most difficult part would be the status of Kirkuk and its oil, but even this is resolvable. For most Kurds, the extraordinary prize of true, U.S.-backed, sovereign independence would be worth giving up a hornet’s nest of a city that their various feuding factions occupied only for three years, and only thanks to ISIL. The sharing of Kirkuk’s oil revenues, meanwhile, is something that can be worked out with U.S. leadership.

Brokering such a grand bargain now is in the American interest. So long as it is brought about through a constitutional process negotiated between Baghdad and the Iraqi Kurds, and not through a unilateral declaration by the latter, it would be a positive outcome for Washington. (It is not clear that the PUK Kurds want independence at all, so their status would be an additional issue.) An independent Iraqi Kurdistan born under these circumstances would likely find Baghdad its best friend among some very challenging neighbors.

Turkey, when it was a staunch and westward-leaning U.S. ally, used to enjoy something close to a veto in Washington over the question of Kurdish independence. Given the state of relations between Erdogan’s more Islamist and authoritarian government with the United States, this is no longer the case. Ankara’s closeness to the KDP — the Iraqi Kurdish faction that drove the referendum — and its refusal so far to play the trump card of actually cutting off Kurdish oil exports, means that the true depth of Turkish opposition to Iraqi Kurdish independence is not as clear as it has been historically. Protections for the Turkmens of northern Iraq would likely be a priority for Ankara in negotiations with either side.

Meanwhile, it is distinctly not in the U.S. interest for these issues to be resolved in foreign capitals. Erdogan was in Tehran recently discussing the matter with the Iranian regime. French President Emmanuel Macron is publicly conversing with the Kurdish leadership and trying to bring Abadi into the talks. With a positive U.S.-led deal available in Kurdistan, and a key election looming in Iraq, for the United States to let others drive this issue would be highly regrettable.

Finally, the long list of tasks above shows that Iraq will require sustained political attention from the United States. Washington will also need maximum influence in Baghdad. A significant move that the United States can make at a cost of zero dollars is the appointment of a political ambassador to Iraq. While a long line of senior foreign service officers performed exceptionally in Iraq, it is time for the relationship to be elevated by the appointment of a figure whom Iraqis see not as a distinguished bureaucrat, but rather as somebody who speaks for power. Of course, Baghdad is hardly Paris or the Bahamas, as far as pleasant postings go, so anyone leaving private life for such an appointment is likely to be significantly committed to the hard work ahead.

The political turmoil that has followed the Kurds’ risky referendum has added a layer of complexity to an already fraught situation. But with sustained attention from the United States, one can hope for a significantly improved—though still hardly perfect—Iraq to serve as one of our preferred bridges to the Arabic-speaking world.

 

Douglas Ollivant, a former NSC Director for Iraq during the Bush and Obama administrations, is an ASU Senior Fellow in the Future of War project at New America. He is a managing partner of Mantid International, a strategic consulting firm with offices in Washington, Beirut and Baghdad.

Image: U.S. Army photo/Sgt. 1st Class R.W. Lemmons IV