Political disputes endanger Iraq’s fragile recovery

• Last Updated: October 15. 2009 11:36PM UAE / October 15. 2009 7:36PM GMT

At least 85,000 Iraqis died between 2004 and 2008 as a result of the sectarian violence that ensued after the US-led invasion, according to figures from the Iraqi government. The number serves as a grim reminder of how much has been lost in Iraq. But it should also underscore what is still at stake. That Baghdad is struggling to pass laws it will need to lay the foundation for long-term stability is reason for concern.

The news that crude has stopped flowing from the Tawke field, the only producing field controlled by the Kurdistan regional government (KRG), is yet another example of the knock-on effects of the inertia afflicting the Iraqi government. Exports stopped because the oil companies developing the fields were not being paid; the government was holding up the funds. But the issue wasn’t about the oil companies themselves, it was about the Kurds. Baghdad is using its control over the federal coffers to squeeze the Kurds into concessions on territorial disputes and to boost the central government’s authority.

Central to overcoming this deadlock is determining the fate of Kirkuk. Claimed by both Baghdad and the KRG, the city, and the province for which it is named, hold historic significance for the Kurds. It is also the site of approximately 10 per cent of the country’s oil reserves. The Kurds want it as a symbol of their national ambitions; Baghdad wants it to boost the nation’s GDP. And the oil dispute has even begun to affect one of the most promising aspects of Iraq’s recent history: its ability to hold free and fair elections. Unless a much-delayed census is held in Kirkuk this month as planned, the Kurds could use their presidential veto to block necessary amendments of the country’s electoral laws. The census is the first step to holding a referendum on Kirkuk’s future. The Kurds want it to show that they are the majority in the province.

The dispute over territory and who controls Iraq’s oil has become a stand-off for control of the nation’s future. On one side are the proponents of a strong national government. Led by the prime minister Nouri al Maliki, this group received a boost after the last provincial elections. Parties running on nationalist platforms had widespread success. On the other side are those who support a loose, federal structure. This group is more factious and divided between the Kurds in the north and Shiites in the south.

Oil could generate the revenues necessary to rebuild a broken Iraq. But in the absence of an oil law, Iraq has been signing contracts based on laws from the Saddam Hussein regime. There are further disputes concerning who ratifies contracts with foreign oil companies, the oil ministry or the parliament. The oil ministry has signed a series of deals to develop fields in Iraq, but that is being challenged in parliament. Meanwhile most of Iraq’s crude stays in the ground.

Mr al Maliki hopes that he will again bolster his party’s control in parliamentary elections next year. If he wins, the Kurds will probably lose their veto. Whatever the outcome, the Kurds cannot be ignored without consequences. To Baghdad, the struggle is about money. To the Kurds, it is about reclaiming a lost identity. But all Iraqis will lose out if their aims cannot be reconciled. As the number of deaths released by the government this week revealed, Iraq has lost far too much already.