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Exploring the Erbil-Baghdad Ankara Triangle

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Next year's 10th anniversary of the Iraq war may focus on the feebleness so far of federalism and the country possibly breaking up without the urgent resolution of the tensions between the autonomous Kurdistan Region and Baghdad that have recently put tanks and artillery on their internal borders.

Ancient differences now involve energy policy, land disputes and differing attitudes towards powerful neighbours, which reflect the wider Shia-Sunni divide.

Iraqi Kurdistan's success attracts needless resentment rather than rejoicing in Baghdad. Last week's huge oil and gas conference in its capital, Erbil, 'the exploration capital of the world,' illustrated its dramatic progress. It is now clear that the Kurds have about three per cent of the world's oil and much natural gas, most of the world's top oil companies have established themselves there, and the economy enjoys double-digit growth.

But Baghdad remains a drag anchor. Previous regimes neglected Kurdistan and conducted genocide including the attack on Halabja in 1988 where mustard gas killed 5,000 people. Baghdad continues to seek central control over Kurdistan's resources although the 2005 constitution allows the Kurds autonomy to encourage exploration in virgin territory with bigger incentives for oil companies.

Baghdad has sought to block the Kurds, a pan-Iraq hydrocarbons law has stalled for years, and energy companies dealing with Kurdistan face being blacklisted down south. But last year the world's largest oil company, ExxonMobil powerfully endorsed the Kurdish approach by moving to Erbil. Baghdad blustered impotently although Exxon later decided to quit the south of its own accord.

But agreement is urgent. Oil and gas don't last forever and their value will fall as alternative sources are found. Delay deters multibillion investment needs and needlessly loses billions in exports.

Additionally, there are major disputes about politics and land. Shia-dominated Baghdad looks to Iran and backs Assad's bloody Syrian regime. Leaders of the largely secular Kurdistan look west, are strongly internationalist after decades of isolation, maintain relations with neighbouring Iran but also maintain a strong fellow-feeling with their repressed Kurds and oppose the Ba'athist regime in Syria where the Kurds have also been victims.

Internal land disputes add to the mix. The internal borders of the Kurdistan Region exclude perhaps half of historic Kurdistan because Saddam unilaterally set the demarcations when forced to withdraw after the 1991 popular uprising. The constitution provides a means of resolving the status of disputed territories such as Kirkuk but deadlines keep slipping as Baghdad drags its feet. This saps Kurdish confidence in the willingness of Baghdad to treat them as equal partners and drives discussion of independence.

But a glance at the map shows how difficult this would be. Kurdistan is landlocked and needs friendly neighbours to export and import. But Kurdistan's long-troubled relationship with its western neighbour Turkey has improved in leaps and bounds to the consternation of Baghdad. Kurdish trade with Turkey has doubled and 1,200 Turkish businesses have located to the region.

There is a bigger deal to be made driven by hard-headed commercial considerations. Turkey is growing fast but has few energy resources and relies on economically and politically expensive Russian and Iranian gas. Kurdistan could supply 20 per cent of its gas needs and much oil. The problem is that there is no pipeline from Kurdistan but that should change next year. The pipeline could expand autonomous Kurdistan's ability to turn its energy into revenues and reduce dependence on Baghdad. Turkey could become an energy hub which then puts Kurdistan on the commercial border of a vast and grateful European market. It could also underpin a democratic deal for the Kurds in Turkey and end the long war there which has claimed 40,000 lives. It is a game-changer.

The closeness of the relationship should have been demonstrated by the presence of the Turkish energy minister at the Erbil conference. The Iraqi prime minister astonishingly ordered his jet to turn back mid-air and tell the Turks to back off, show the Kurds who is boss and stir Arab nationalism before elections next year. This blundering could encourage the Kurds and the Turks to move even closer.

This tactical tantrum by Baghdad could blow away as Iraqi leaders insist on stepping back from the brink but highlights various futures for Iraq and Kurdistan if unresolved. Given the history of repression and genocide, it is unsurprising that deep-seated differences remain a decade after Saddam was overthrown. Tony Blair rightly concluded that '...when the lid comes off a society in this part of the world, run with an iron grip, there is an outpouring of religious, ethnic and tribal forces of disruption that make the pathway to the future very hard to navigate.'

Freedom from fascism, however, provides an opportunity for Iraq to overcome its history rather than wallowing in it. Iraq's friends should help make federal Iraq work so its plentiful natural and human resources benefit all its people and galvanise the Middle East. Success in Kurdistan is success for Iraq as a whole.

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Gary Kent is director of Labour Friends of Iraq and the administrator of the All-Party Parliamentary Group on the Kurdistan Region in Iraq and attended the oil and gas conference in Erbil as a guest of the Kurdistan Region's Ministry of Natural Resources. He writes in a personal capacity.