Tag: Iraq
Peace Picks April 14 – 18
1. Terrorism, Party Politics, and the US: Expectations of the Upcoming Iraqi Elections
Monday, April 14 | 12:30 – 2pm
Room 517, SAIS (The Nitze Building), 1740 Massachusetts Ave NW
Ahmed Ali, Iraq research analyst and Iraq team lead at the Institute for the Study of War, and Judith Yaphe, adjunct professor at the Elliott School of International Affairs at George Washington University, will discuss this topic.
For more information and to RSVP, send an email to: menaclub.sais@gmail.com
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No tempest in a teapot
I did this piece based on my visit to Erbil last week for the Middle East Institute, which published it today under the title “Erbil, Baghdad and Implications of the Oil Dispute”:
Erbil—the capital of Iraqi Kurdistan—was once a chaotic and dusty backwater. Today, it is well on its way to becoming an attractive and orderly commercial and government center. A decade ago there were virtually no trees, as they had all been cut down for firewood to heat Kurdish hearths during the 1990s wars among Kurds and between Kurds and Saddam Hussein’s army. A magnificent wooded park now graces the mile or so from the high-rise hotel district to the Kurdistan Regional Government’s parliament and offices. The ancient citadel—the current signs claim it was settled as early as 6000 BC—is being tastefully restored with UNESCO help. The once shambolic souk still needs work, but it is a lot more organized than a decade ago. Wide avenues outside the center are sprouting shopping centers, restaurants, offices, hotels, and apartment buildings.
The security presence is high near government offices, but mercifully light elsewhere. Al-Qa‘ida attacks still occur, though rarely. The peshmerga forces associated with what were once the two main political parties, which fought against each other in the 1990s until the United States mediated a peace pact, have been partially merged. More than a dozen public and private universities have been established in the last decade. Health conditions have improved.
All of this is the result of a deliberate, sustained effort by the Kurds of Iraq to use their share of Iraq’s oil revenue to build a Kurdish state, one that is constitutionally part of a sovereign Iraq but with broad self-governance in many areas.
At the moment, a caretaker government is in place, because the now three biggest political parties—one party split and has found itself in third place behind its rebel portion—have been unable to agree on how to slice the patronage pie. Parliament functions as in most other countries, though Kurdish sources tell me the media is far from independent and corruption is a big problem. Kurdish politics can be a rough sport, though nowhere near as deadly as politics in the rest of Iraq.
The vital revenue to support this burgeoning state comes mainly from oil. The Kurdistan Regional Government receives 17 percent of Iraq’s overall oil income, minus deductions for Baghdad expenses that are supposed to benefit Kurdistan. The real amount comes to more or less 14 percent, but that approaches the large sum of $15 billion.
The trouble from the Kurdish point of view is that Baghdad controls the flow of the money, and an increasingly authoritarian Prime Minister Nuri al-Maliki controls Baghdad. A recent dispute over Kurdistan’s oil production prompted Baghdad to reduce and eventually to end the revenue stream, leaving Erbil without the funds needed to pay its employees. The dispute concerns Kurdistan’s production and export of oil without Baghdad’s permission. One and a half million barrels of Kurdistan crude is currently sitting in storage tanks in Turkey, exported via a pipeline that Baghdad does not control.
This may seem like a tempest in a teapot. But it has broader implications than Kurdistan. Iraq has vast oil and gas reserves. It currently produces over three million barrels per day but has potential for much more. Kurdistan produces about one-tenth that amount, but also has potential to produce much more. Once Kurdistan production passes 500,000 barrels per day, Erbil would be better off receiving 100 percent of its own oil revenue rather than 14 percent of Iraq’s, if Iraq’s production does not increase.
The amounts are important, but so too are the directions in which the oil is exported. As things stand today, Iraq sends about 90 percent of its oil through the Gulf and the Strait of Hormuz, under the threat of Iranian guns. If more Iraqi oil were exported to the west (via Jordan to Aqaba) and to the north (through Turkey), Iraq would be tied much more definitively to Europe and the West. Its gas, still largely undeveloped, could eventually be a serious alternative to Russia’s, also reinforcing ties with the West.
Thus it is the geopolitics and geoeconomics of Kurdistan’s oil and gas that make it important. This is why an American diplomat, Brett McGurk, has been shuttling between Baghdad and Erbil, trying to resolve their current dispute. It is also why Turkey and Kurdistan have gone to great lengths to settle their differences. Today, Turkey is a major investor and trading partner for Kurdistan.
As goes oil, so goes Iraq. If Baghdad and Erbil can settle their current differences and reach the long-anticipated agreement on a law regulating production and export of oil and gas as well as distribution of the revenue, Iraq will stay in one piece. But if Kurdistan decides it would be better off to go it alone, calling the referendum President Massoud Barzani never fails to mention to visitors who call at his Saddam Hussein-era palace outside Erbil, Iraq will come apart, and not likely in two neat pieces.
Erbil and Baghdad have never settled their disputes over which territory should be governed by one and the other, including oil-rich Kirkuk. Nor are the Sunnis of western Iraq likely to stick around in an Iraq that without Kurdistan might be 80 percent Shi‘a. Their provinces are already in rebellion against Maliki. A messy dissolution of Iraq, with uncertain borders and ready availability of Sunni extremists from Syria, would be a formula for violence, further realignment of Baghdad and its vast oil reserves with Tehran, and a haven for terrorists in Iraq’s western provinces.
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Prime Minister of Shiastan
I don’t generally write about elections in advance, since whatever you say is bound to be dated (and more than likely wrong) once the votes are counted. But the Iraq parliamentary election April 30 is important enough to merit some comment. And it is far enough in advance that I can write off any mistakes to things that occurred after the post.
The current expectation is that Prime Minister Maliki will do well in his campaign for a third mandate. He may not match the 90 seats his State of Law got in 2010, but the prevailing consensus of both his supporters and opponents is that 80-90 is well within reach. A plurality seems assured. This is a bit surprising, given the challenge to his rule Sunnis have been mounting in Anbar and Ninewa, where Al Qaeda has taken over substantial areas. But Maliki’s belligerent stance towards the Sunni gives him credibility with Shia, who are fed up with extremist Sunni attacks and will want to express their view at the polls. Even 60-70 seats would put Maliki in the driver’s seat after the election, because changes in the electoral law (provincial electoral districts and open lists) have ensured that smaller parties have a good chance of doing better than in the past, thus fragmenting the opposition. The Iraqiyya list that beat him last time by two votes has been evaporating.
Some think government formation might take a long time, as it did last time around. That is certainly a possibility, but if Maliki gets the largest number of seats for his own State of Law and manages to hold the Shia alliance together he can hope to shortcircuit the process by coopting smaller parties and independents as well as taking on board some more moderate Sunnis. The Kurdish parties would then have no choice but to hop on board, before the train leaves the station.
What might upset Maliki’s apple cart? Two things: Iran and Najaf. Both want the Shia united. But Tehran has become concerned that Maliki is getting too strong. Iran has suffered in the past from a strong executive in Iraq and is therefore not wedded to Maliki. Najaf, that is the marjariya (Shia religious authorities) are thought not to be keen on Maliki either, as he has failed to deliver services to the Shia poor, or most others for that matter. If either Najaf or Iran decides that the Maliki cannot unite the Shia block, they might defenestrate him and manage it with someone else. Maliki himself last time around set a precedent by forming a government without having the largest number of seats (he assembled his coalition post-election).
That however is unlikely. Maliki, who has proven himself a master at political maneuver, will more likely keep the Shia united, pick off some Sunnis and present the Kurds with a virtual fait accompli.
The trouble is government formation in this fashion might be the end of Iraq. The Kurds, who are resentful of Maliki’s failure to keep promises they say he made last time around, might well take the occasion to conduct a referendum on the status of Kurdistan, especially if there is no settlement of their oil disputes with Baghdad. Independence would pass overwhelmingly. If that happens, the Sunnis will not be sticking around: there would be a giant uprising in Anbar, Saladin and Ninewa. Maliki would react by trying to crack down on both Kurds and Sunnis, but there is no reason to believe the Iraqi security forces would be able or even willing. A big election victory for Maliki would thus become Pyrrhic. He would become prime minister of Shiastan.
Even if Iraq does not break up as a result of a third Maliki mandate, the sectarian and ethnic strains will be dramatic. Maliki’s inclinations are to centralize power. That is precisely the wrong direction to go in if something like democracy is to survive in Iraq.
A more favorable outcome would require a cross-sectarian, interethnic alliance of major Shia blocs (other than State of Law) with Sunnis and Kurds, backing an alternative to Maliki. This is unlikely, since it would require a quick and definitive choice of a speaker of parliament, president and prime minister, one of each flavor, then a quick distribution of ministerial slots, with Maliki and his plurality trying to block the effort at every turn. Unlike political leaders in more mature democracies, he cannot expect a quiet retirement, or a turn in opposition. He has chased several Sunni leaders out of power and into Kurdistan, where people told me last week they would be happy to welcome Maliki as well. From his perspective, that’s not an attractive proposition.
Sarah Chayes writes that the election in Afghanistan today may bring neither the stability nor the transition the West wants. I fear much the same might be said about Iraq. Both countries are in need of national dialogue and reconciliation. But in Iraq the election definitely does matter, while in Afghanistan Sarah suggests that will not be the case.
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All deliberate speed, please
UN Secretary General Ban is marking the third anniversary of the Syrian uprising, which by my reckoning is March 15, by appealing to Russia and the US to revive peace talks. That’s his job, but prospects are not good.
The Asad regime continues to make slow progress on the battlefield. The opposition continues to insist that he step down to initiate a transition to democracy. There is no “zone of possible agreement.” Asad is preparing to conduct what he will call an election this spring to reconfirm his hold on power. The conditions in regime-controlled areas will not permit the election to be anything like free or fair. The conditions in liberated and contested areas won’t allow an election to occur at all. But Asad will claim legitimacy. Russia will concur.
In the US, consciousness of the horrors occurring in Syria is growing. The recent reports of the Save the Children and UNICEF boosted the case for humanitarian relief. The US has already been generous, even to a fault, as it appears to be buying tolerance for the failure to bring about a political resolution of the conflict. Russia, more committed to realpolitik, continues to arm, finance and provide political support to the regime. The crisis in Crimea leaves little oxygen in Washington for Syria. There is an argument for replying to Putin’s moves in Ukraine by strengthening opposition efforts in Syria, but I am not seeing signs that it is winning the day.
Some key members of the Syrian Opposition Coalition (Etilaf) will be in DC next week making the case for more support, including to the more moderate fighters. What Etilaf needs to do is convince the Obama Administration that vital American interests are at risk in Syria. The two most striking are the risk of extremism putting down deep roots in Syria and the risk of state collapse, both of which would affect not only Syria but its neighbors, especially Lebanon, Iraq and Jordan. Perhaps eventually also Turkey and even Israel, whose boundary with Syria in occupied Golan could become hotter than it has been for many years.
Etilaf has not yet convinced Washington that it can be an effective bulwark against these threats. The Coalition has precious little control over even the relative moderates among the fighters. It has little to no capacity to counter Jabhat al Nusra or the Islamic State of Iraq and Syria (ISIS), the former the official al Qaeda franchisee and the latter its Iraq-based competitor. Etilaf favors preservation of the Syrian state, but with every passing day that becomes less likely. Nor has Etilaf demonstrated a lot of traction with the ad hoc administrative councils that pop up in liberated areas.
Where Etilaf showed itself to best advantage was at the Geneva 2 talks, where it outmaneuvered the Asad regime and scored lots of good points in favor of a managed transition and against the horrors of what Asad is doing. There is irony then in Etilaf emphasizing the limits of diplomacy, which is the arena in which it has done best.
That is not however a good reason to revive the talks, which really went nowhere. Nor can they be expected to, given what is happening on the battlefield. Until Iran and Russia are convinced that they risk more by continuing to support Asad rather than abandoning him, Tehran and Moscow will provide the edge he needs to continue to gain ground, albeit slowly. This is a formula for more war, not less.
A couple of weeks ago, the Obama Administration was thought to be looking at new options for Syria. There is no sign they have emerged from the “interagency” labyrinth. That’s not surprising. It took 3.5 years for something meaningful to emerge from the National Security Council in Bosnia, and depending on how you count at least that long in Kosovo. Only in Afghanistan and in Iraq have such decisions proved quick, mistakenly and disastrously so in Iraq.
Deliberation is wise. But if it takes too long, vital American interests in blocking extremists and maintaining the states of the Levant may suffer irreparable damage. Not to mention the harm to Syrians, who deserve better. All deliberate speed, please.
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The wrinkles in aid to Ukraine
Columbia University Financial Law Visiting Scholar Jeremy Pam, who did sovereign debt restructuring (including for Iraq) at Cleary Gottlieb and then went off to Baghdad for the Treasury Department and Kabul for the State Department, kindly offers some clarification of points I raised on Tuesday about assistance to Ukraine. He writes:
1. Here’s some insight on the accounting for loan guarantees generally, from an April 2013 CRS report on US Foreign Aid to Israel:
Since 1972, the United States has extended loan guarantees to Israel to assist with housing shortages, Israel’s absorption of new immigrants from the former Soviet Union and Ethiopia, and its economic recovery following the 2000-2003 recession that was sparked by a Palestinian uprising (known as the second intifada). Loan guarantees are a form of indirect U.S. assistance to Israel, since they enable Israel to borrow from commercial sources at lower rates. Congress directs that subsidies be set aside in a U.S. Treasury account for possible default. These subsidies, which are a percentage of the total loan (based in part on the credit rating of the borrowing country; in the case of the loan guarantees in the 1990s, the subsidy amount was 4.1%), have come from the U.S. or the Israeli government.
2. Here‘s a subtle discussion by Simon Johnson and Peter Boone on both the political and policy dynamics of IMF assistance to Ukraine and the larger problems caused by pressure on both the West and Russia to provide large, relatively unconditioned aid to Ukraine.
3. The questionable international law doctrine of “odious debt” seems unlikely to be of much help to Ukraine, particularly as given the numbers that Johnson and Boone provide about Ukraine’s concrete debts (to Russia and to other creditors) that have been coming due it seems reasonable to assume that Russia’s late-in-the-game subscription to $3 billion in Yanukovich-era sovereign bonds mostly went to keeping the ship of state afloat after the EU/IMF deal fell through.
4. Boone and Johnson do not suggest any easy solutions. A quick bailout will just defer needed reforms (they’d previously written here about the economic and political need for a more Western-oriented Ukraine to bite the bullet on ending the gas subsidies enabled by the agreement with Russia to discount gas — in part for the extension of the lease to Sevastopol! Putin described the gas bill discount for the naval base extension as “exorbitant”, saying “there’s no military base in the world that costs this much money.”
On the other hand, a “disorderly” debt default is always scary. The best solution implied might be what we used to call an “orderly” debt restructuring, but the problem with that is that there are not that many people around anymore (both inside the official sector and outside) with the skills and experience to do it well. This is what I take to be one of the real lessons of the Iraq debt deal — unless there is a new appreciation of the value of such skills and experience, we may not look upon its like again….
So if I understand correctly, the Congress prefers loan guarantees because only a small fraction shows up on the books. It is not clear to me yet whether guarantees are really an effective way of producing more money for Ukraine, though I suppose without them no one would ante up. Little of the aid is likely to arrive quickly, especially if the EU and US insist on needed reforms. Debt reduction will be difficult because a lot of the money is owed to Russia, putting the West in the awkward position of getting Putin his money. Default could make a messy situation worse. Lots of wrinkles in aid to Ukraine.
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No end in sight
Syria is the most rapid and widespread displacement of people since the Rwandan civil war of the 1990s, according to State Department Deputy Assistant Secretary Kelley Clements of the Bureau of Population, Refugees, and Migration. Last Friday’s Brookings Institution/Mercy Corps panel focused on “No End in Sight: Syria’s Refugees and Regional Repercussions,” drawing on humanitarian and diplomatic expertise from Iraq, Jordan, Lebanon, Turkey, and the United States.
Ambassador Antoine Chedid said Lebanon honors its international commitments to meeting the needs of Syrian refugees and asylum seekers, who are straining the country’s public services and the economy. Lebanon’s population has increase by about one-third. This population bulge has distorted the economy, increasing the unemployment rate and driving the cost of rent upward. Conditions in the refugee camps are exacerbating poor health and insecurity as well as breeding terrorism and radicalization. The Lebanese government favors creation of safe zones within Syria, but these are controversial, because their civilian population can become a target of the warring parties. Read more
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