Erbil-Baghdad relations: Twenty years since the regime change

Twenty years ago, the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) were providing protection and logistical support to facilitate the return of Shia diasporic figures. If anything, the ruling Kurdish parties projected power and political stature in the new Iraq. Today, the leaders of the two parties face formidable security, economic, political, and legal challenges to their powers, highlighting the change in the balance of power between the Iraqi government and the Kurdistan Regional Government (KRG).

Since the US-led invasions of Iraq in 2003, outstanding issues between the KRG and the federal government of Iraq have gone through various phases and taken different forms, with critical milestones characterising and shaping an uneasy relationship. While Kurdistan voted for the 2005 Iraq constitution and accepted its status as a federal region within Iraq, it maintained and further consolidated its de facto independence. Twenty years since the regime change in Iraq, and 18 since the ratification of the 2005 constitution, the constitutional framework outlining relations between the KRG and the federal government of Iraq remains unfulfilled.

After a year of Iraq’s longest government formation, the Iraqi parliament elected a new prime minister, Mohammed Shia al-Sudani in October 2022. Al-Sudani is backed by the Coordination Framework, a coalition of mainly Shia parties that includes two former prime ministers and a pro-Iran set of parties. He has made progress by reaching an agreement with the KRG to address budget disputes and the management of natural resources. Revenue sharing, oil exportation, disputed territories, and the status of the Peshmerga have long been among major disputes between the two governments. As an indication of the decline of Kurdistan’s power, the recent and current disagreements are more on the issue of natural resources and revenue than on the issues of Kirkuk and other disputed territories.

The current dynamics of Erbil-Baghdad relations are shaped by three broader developments in Iraqi and Kurdish politics. These include changes in the dynamics and players of post-2003 informal consociationalism, Baghdad’s legal pressures on Erbil, and Erbil’s exposure to Iran’s threats and pressures.

Alternating between a federal-regional and a state-to-state relationship

Since the failure of Kurdistan’s referendum for independence in September 2017, Kurdistan’s de facto independence weakened, and the balance of power shifted in favour of the Iraqi government. Since then, it has become common for the Kurdistan Region of Iraq (KRI) leaders to state that Baghdad represents the strategic depth of Kurdistan. Prior to the 2017 referendum, the relationship between Erbil and Baghdad resembled a state-to-de facto state relationship than a federal-regional arrangement outlined in Iraq’s legal frameworks. Baghdad has recently gained more leverage on the KRI. In February 2022, amidst the political crisis over the government formation, the Iraqi Supreme Court passed a momentous ruling against the legal foundations of Kurdistan’s energy sector: a pillar of Kurdistan’s viability. Recently, and more specifically since the 2021 parliamentary elections, the Iraqi Supreme Court has emerged as a key player in settling political disputes in Iraq. Since late 2017, the Court has issued nine decisions against the KRI. Some of the Court’s decisions involve a kind of informal amendment of the 2005 constitution, particularly in the dispute over the management of natural resources by the Kurdistan Region. Erbil has limited power and cards to mitigate the negative impact of the Court decisions. To prevent new decisions, or to delay the implementation of previous decisions, the KRI ruling parties are required to pursue good relations with the main Shia forces, but importantly not to take major steps against Baghdad’s main powers.

A fragile ethno-sectarian power-sharing arrangement

Kurdistan’s position in Iraqi politics has long been protected by a system of informal consociationalism created after 2003. The post-2003 system in Iraq has been centred on a power-sharing arrangement among the country’s three largest ethno-sectarian groups: Shia Arabs, Sunni Arabs, and Kurds. According to this informal agreement, the prime minister’s post is reserved for a member of the Shia community, the parliament speaker must be a Sunni, and the president a Kurd. In addition to this arrangement, the system was based on “balance” and “consensus” between Iraq’s three components in major political decisions, at least between the Shia and Kurdish parties. This system served the interests of Kurdistan, through which Kurdish parties could take senior and strategic positions in Baghdad and participate in important decisions in Iraq. At the same time, they administered the Kurdistan Region independently. This system of informal consociationalism is still in place, but its dynamics and actors have changed. The ability of Kurdish parties to prevent Shia forces from making decisive decisions by a simple majority rule has been weakened. Unlike the early years after the regime change, now it has become an established and normalized part of the political process to pass laws and make decisions without any agreement with the KRG or its ruling parties.

Moreover, recent developments in Iraq, including the October 2019 protests and the political crisis after the 2021 elections, have challenged the post-2003 ethno-sectarian power-sharing arrangement. Following the 2021 early parliamentary elections, the country witnessed a significant level of intra-communal divisions and powerful actors such as the Shia cleric Muqtada al-Sadr who made calls to form a majority government in a departure from the classic consensual government. There was a lack of intra-Shia agreement on the next prime minister, and similarly, there was no consensus among the Kurdish parties on the next president. In the past, Kurdish political parties tried to keep their problems at home, but now Baghdad has become a place of confrontation between them. The division of Kurdistan’s main parties into different blocs in Baghdad has also affected the internal situation in Kurdistan, further dividing society. The post of president, which is a symbol of Kurdish representation in Iraq, has been decided by members of Shia and Sunni forces for the second time due to disagreements between the PUK and KDP.

The limits of Erbil’s balanced foreign policy

Kurdistan has long pursued good relations with multiple regional powers, including those who are rivals. Since the assassination of Qassem Soleimani by US drones in January 2020, Kurdistan has become subject to Iran-US rivalries. The capital, Erbil, has been attacked by Iran and its proxies several times. Many of these raids were planned and launched in the disputed territories of Nineveh Plains and Kirkuk and also targeted KRI’s key energy infrastructures. The attacks were not only related to the broader US-Iran rivalry, but also indicate the deterioration of relations between Erbil and some Iraqi Shia forces, further complicating the relationship between the KRG and the federal government.

In summary, the roots of the disputes between the two governments in Erbil and Baghdad remain unchanged. There is a pressure on the Erbil leadership, not least from the US, to provide certainty in its relations with Baghdad, especially around the budget. In the short run, this means, Kurdistan will continue to succumb to many of Baghdad’s conditions and demands, provided that the core pillars of Kurdistan’s political entity are preserved.

This article was first published by the Italian Institute for International Political Studies (ISPI) on 17 March 2023

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