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Will Oil Forever Divide Iraq?

Iraq Oil Rig


Power-sharing in Iraq

Ever since the establishment of Iraq as a state, the arrangement of power-sharing within the country, on both political and economic bases, has been at the crux of all problems and disputes. The variety of religious and ethnic denominations that pervade the geographical landscape of Iraq, and the locations of material resources, namely oil, have directed the nature of politics in the country for approximately a century.

The lack of legitimacy of the political power in Baghdad and the gross mismanagement of the economy, land and oil rents has made it inevitable that a variety of groups within Iraq are seeking devolution of political power of some sort. The picture for national unity looks bleak, and irredentism has been on the rise in Iraq from various groups since the downfall of the authoritarian Saddam Hussein. Each denomination may decide to continue to look inwardly and protect only the interests of their group, in which case one may expect to see a disintegration of Iraq. Alternatively, all groups will reach difficult compromises and agree to the fair distribution of resources and political power. An analysis of these issues and risks will help to envisage the state of Iraq in the future.

Today’s sectarian violence

In the power vacuum after the downfall of Saddam Hussein, the extreme fragility of the ostensible national unity of Iraq cracked, and the fissures within Iraq that had been sown since the establishment of the country began to show in a clear manner. Recent discussions of Iraq have mainly centered on ISIS. The group, which has a Sunni leadership, rose in prominence as a reaction to the sudden loss of Sunni political power in Baghdad (the last two Prime Ministers have been Shi’i), the devastated state of the Iraqi economy (leaving much of the youth unemployed and vulnerable to an ideology promising heavenly gains), and the civil war in Syria.

The mismanagement of the Iraqi economy, which is a prominent reason for the sectarian violence of the country, is rooted in a number of factors. The lack of rule of law has made for an unstable environment wherein both internal and external trade has been unable to flourish. In addition, the simple issues of waste and inefficiency are at the forefront of the economic woes in Iraq and are at the origins of corruption in the country. Iraq suffers from a case of Dutch disease, like many other Middle Eastern states, and its population is heavily reliant on state-sponsored jobs, which is, in turn, dependent on the fluctuation of oil prices, which is the main source of revenue for the Iraqi government. Such reliance on the state and oil limits the opportunities for entrepreneurism and alienates those who find themselves outside the public sector. Thus, marginalized sectors of the population are susceptible to taking recourse to violence.

Related: Big Oil’s Iraqi Disappointment

The question of devolution

Devolution in Iraq is an issue that is intimately connected to the geographical distribution of oil. Most oil reserves are found in the northern, Kurdish-dominated regions and the southern, Shi’i-dominated regions. This has left the Sunni population, mainly populated in the central regions, bereft of oil reserves. The assignment of Sunni Iraqis to positions of political power in the establishment of the country by the British colonial administration, and the administration’s tendency towards a divide and rule policy, still plague Iraqi politics and society today.

The Shi’a of Iraq and, especially, the Kurds, have therefore always been the most receptive to devolution. The tables have recently turned and since the downfall of Saddam Hussein, Iraq has had two Shi’i presidents and the Kurdish regions of the north have moved closer and closer to independence from Baghdad. The nature of further Kurdish devolution, however, is contested and is widely seen to be correlated with the Kurdish establishment’s foreign relations with regional and global partners.

Each large denomination (Kurdish, Sunni and Shi’i) is fighting to keep as much power and access to resources as possible. The Kurdish regions are directly adjacent to ISIS and the Kurds are very keen on reifying their independence from Baghdad completely. This has been demonstrated by the Kurds’ greater reliance on Peshmerga fighters against ISIS, rather than on the national Iraqi army, although cooperation between the two has not been hindered during US-led attacks on ISIS. The Sunnis are already discussing plans for their share of power in a post-ISIS Iraq. Some are advocating a unified Sunni region, which many others criticize on the basis that it will further weaken Iraqi unity and lead to more sectarian conflict.

Related: The Natural Gas War Burning Under Syria

As for ISIS, one wonders from where they are receiving funds to finance their activities. There are speculations that they are selling oil from land that they have occupied to Turkey. Although Turkey is, on the face of it, fighting against ISIS, Turkey may not see the group’s ascendance in such a negative light. ISIS is an enemy to the Kurds of Syria and Iraq, populations that have borders with the Kurds of South and Southeastern Turkey. Turkey would not be reluctant to see a weakening of Kurdish political power in the region, especially since the independence of Kurds in Northern Syria and Northern Iraq has been going from strength to strength in recent years.

Future irredentism or national unity?

The divisions within Iraq took root right at the start of the formation of the country. Superficial allegiances based on land acquirements, oil rents and achievement of social and political power have caused rifts between different tribes, and religious and ethnic denominations. Serious political and economic compromises are necessary to ensure a united Iraq, otherwise we are likely to see further devolution.

By Global Risk Insights

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