In some basic outline, the paper gives the readers an idea where Kurdistan Region foreign policy is at and where it is heading. It also points out the values and mechanisms the KRG are using and have used to enhance their influence in the region, exploring the issues behind the headlines. I have also touched on the use of trade, investment and oil as a tool to conduct diplomacy and what that means to Turkey with specific focus on the issue of energy and oil, which is the most important from a Turkish prospective.
The Future of Iraqi Kurdistan: Between Survival & Independence
İhsan Dağı, Editor in Chief, Insight Turkey
"Turkey, the US and the KRG: Moving Parts and the Geopolitical Realities"
William Park, (Kings College, London)
"Democracy or Partition: Future Scenarios for the Kurds of Iraq"
Burak Bilgehan Özpek, (TOBB ETU University,Ankara)
"Survival Strategies and Diplomatic Tools: The Kurdistan Region's Foreign Policy Outlook"
Shwan Zulal, (Politicial Analyst & Energy Consultant, London)
The KRG has been to trying to create an environment conducive to investment in order to attract foreign investment and create strong bilateral relations leading to strengthening multilateral partnerships with allies and neighbours that has been hostile to the Idea of Kurdistan.
By adopting investor-friendly policies, the KRG has managed to attract multinationals and oil Majors leading to a rapid economic development. The policy of looking outward has made the Kurdistan region an attractive place for investment which earned it many friends around the world.
Turkey has been and is the leading trading partner and investor as Turkish companies are thought to make up 55 percent of all the foreign companies operating in the Kurdistan region and annual trade is reported to be more than US$4 billion.
As more oil is discovered, Kurdistan region now has the potential to become an important and reliable source of energy for Turkey in particular and to the global energy market.
The KRG has been utilizing oil to its advantage when conducting diplomacy. Through oil, they have managed to form alliances and lobby politicians abroad. Oil and gas will and has been playing a leading role in the KRG's foreign policies. For example, oil has already been used to form alliances with Turkey.
Iraq's main revenue comes from oil, therefore it not surprising that there is a standoff between Baghdad and Erbil over oil policy and revenue sharing. Baghdad wants to centralise power and have full control over the hydrocarbon resources. Meanwhile the KRG sees oil as a tool to enhance its autonomy and use it as a tool to strengthen its influence in the region.
Kurdistan region oil policy has been successful. Attracting oil majors has been pivotal in putting Kurdistan region on the world energy map. Kurdistan region President likened the presence of ExxonMobil to having 10 US military divisions, meaning an oil giant like ExxonMobil, which represents US interest, will act as a security buffer for the region.
Although the KRG has been rather successful and oil policy has contributed to a successful foreign policy, this has come at a cost of domestic policy. While the KRG has rightly enhanced its diplomatic influence in a challenging geopolitical environment, domestic politics has taken a back seat. The political parties influence still overpowers the KRG and Parliament, which has led to a chronic mistrust from the public and an unhealthy political rivalry. The tense political atmosphere has led to delays in decision-making and political polarisation endangering the unity of purpose for the political factions in Kurdistan, which is vital to the survival of the region.
It is true to say that the KRG still stresses the unity of Iraq and would want to be part of Iraq. This pragmatic approach is multidimensional. The KRG needs 17% of the Iraqi budget to sustain the current economic growth and development. While the government income is heavily reliant on oil export, the Kurdistan region will be at a disadvantage if it decides to go it alone and separate from Iraq at this stage, given the infrastructure limitation. Furthermore, there is the geopolitical dimension of a possible Kurdish state which neighbouring countries would object to for obvious reasons. The KRG have been known as kingmakers in Iraq. This may no longer be the case, but they are still very influential. Secession from Iraq will increase Kurdistan's reliance on Turkey for imports and exports at the same time and make it almost a vassal state, in which Kurdistan will lose its influence and become a junior partner in the relationship.
Relations with Turkey
The Kurds in Iraq understand that the AKP has been pursuing a multifaceted approach towards transforming its relations with the Kurds in the Kurdistan region and in Turkey through extensive trade and investment. The KRG on the other hand has been trying to act in parallel of this policy and become a partner, both politically and economically. Erbil's intention has been to use its shared cultural and religious heritages as well as economics, primarily in the hydrocarbon sector, to enable it exercise a degree of influence over Turkey by enticing Turkey with commercial interests.
And now the KRG is taking advantage of the religious dimension of this relationship too, as Kurds and Turks are both largely Sunni Muslims. Although not very relevant in the past, the emerging regional sectarianism which is playing out in Syria is making the differences more relevant. Moreover, KRG's good relations with Turkey is also been encouraged by the US, for strategic region given what is happening in relation to a Shiite Iran.
Today the relationship between Turkey and the KRG has developed beyond anyone's imagination, reaching its peak last year when Turkey's prime minister, Erdoğan, visited Kurdistan region. There is a debate about the meaning of this visit. However, to me it is a clear vote of confidence in the KRG and recognition that Kurdistan region does matter to Turkey and will play a role in region. New oil trade be it on a small scale and talks of new oil and gas pipelines going through Turkey directly from the Kurdistan region in spite of Baghdad's vehement opposition, is a clear indication of the strengthening ties.
The energy trade is an important element in the relationship. Turkey's economy is growing rapidly and economic growth requires energy. Turkey imports most of its energy needs, making it largely reliant on gas imports by pipelines from Russia, Azerbaijan and Iran. Moreover Turkish gas demand is set to double and the need for diversification and new suppliers is apparent. The Kurdistan region has the potential and the willingness to fill the gap, hopeful that by providing energy security and diversification to Turkey, they would receive more political recognition.
If Kurdistan region becomes a stable source of energy to fuel the Turkish economy, KRG seeks to become more self-sufficient and independent while giving Turkey a leverage when it comes to negotiating energy deal with others. This will also make Turkey more influential in Kurdistan region as its income will largely depend on oil and gas exports going through Turkey.
The KRG knows that Turkey is possibly the only reliable, or perhaps the most reliable neighbour. If the outstanding issues, which all culminate in the Kurdish question in Turkey can be resolved, the partnership could work much better.
The Kurdish question
The ongoing Kurdish issues in Turkey is one of the main barriers in further developing the relationship. On the one hand, the Turkish establishment largely denies the identity-based political rights of the Kurds; while on the other hand, the Kurdish public is sceptical of the intentions and motives of any Turkish government.
The KRG see its role as a mediator; persuading the PKK to lay down their arms in return for the Turkish government granting more political rights and autonomy for the Kurdish population in Turkey. The KRG also believes that Turkey has limited options but to use the Kurds in Iraq to peacefully solve the long-standing issue of the Kurdish population in Turkey. At the same time, the KRG realizes the importance of energy to Turkey and hopes that Turkey's economic interest will override its frivolous stance on the Kurdish question.
While the KRG has been upbeat about the prospect of a Kurdish-Turkish partnership, they are aware that, Turkey like any other country has its internal politics to deal with. It also recognizes that AKP party has made progress therefore wants to be part of the solution. Therefore KRG's intention has been to help the AKP party to enable it resolve the Kurdish issues in Turkey. Not only because of the geopolitical and security reason but because if they don't and the political landscape changes in Turkey in which the Kurdish issues becomes politically unappealing for AKP to fight elections over, moving more to the right. The result will be more violence and only extremist voices could be heard from both sides, jeopardizing any progress made.