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Winning
a fair share of oil revenues is important to the
Kurds, but not so crucial that they will risk
derailing the bigger goal of federal status.
When the final draft of Iraq’s new constitution
comes out next month, Kurds will be holding their
breath to see what they get out of it – in financial
as well as territorial terms.
But as members of parliament debate what should be
included in the document, Kurdish officials are
taking a soft line on one of their key demands,
saying that while they want more revenue for their
region, they are prepared to wait until the country
gets back on its feet.
The Kurds’ central demand is that Baghdad should
from now on deal with the whole Kurdish region as a
federal entity, rather than with the three
governorates that make it up. The 18 governorates of
Iraq, inherited from Saddam Hussein, currently form
the highest tier of sub-national government.
At the same time, Kurdish politicians want to be
assured of a fair share of Iraq’s oil income so that
a strengthened federal entity would be viable
economically. During the discussions on forming a
government in March, calls were heard for the 17 per
cent cut of government revenue currently earmarked
for Kurdistan to be increased to something like 25
per cent.
The Transitional Administrative Law, TAL,
effectively Iraq’s interim constitution, says that
revenues from all natural resources are to be shared
out “in an equitable manner proportional to the
distribution of population throughout the country”,
also taking into account issues such as development
needs and past injustices in particular regions.
The 17 per cent of national revenues - most of it
from oil - is based on this TAL wording and a
population estimate for the Kurdistan region. Given
Iraq’s substantial role as an oil producer and high
world prices, that translates into respectable
figures - Kurdistan got about 850 million of the
five billion US dollars the country earned from its
oil in January-March 2005, according to Dhiya al-Bakir,
director of Iraq’s State Oil Marketing Organisation.
According to Serdar Abdul-Karim of the Oil Institute
of Kurdistan, the revenue issue will inevitably rear
its head during the negotiations on federalism as
part of the constitution-drafting process.
Since the Kurdish Alliance took second place in the
January parliamentary election, after the Shia-led
United Iraqi Alliance, it should be in a strong
position to press its claim. Since turnout figures
showed that Kurds accounted for 26 per cent of all
voters, some have argued the revenue share should be
adjusted accordingly – although this figure was
skewed by the under-representation of Sunni Arabs at
the polls.
Whatever negotiations go on in private, the official
line in Kurdistan appears to be to avoid aggressive
claims that might irritate other players such as the
Shia of southern Iraq, who also sit on substantial
oil reserves.
Othman Shwani, deputy finance minister in the
Sulaimaniyah administration, one of two local
governments which run Kurdistan, said 17 per cent
was insufficient, but officials are prepared to hold
back on asking for more for the moment.
“We are looking forward to getting more in the
future,” said Shwani. “But the situation Iraq is in
has forced us to agree to this.”
Frequent sabotage attacks have cost Iraq billions of
dollars in export earnings, and the collapse of the
refining industry has forced the government to
import most petroleum products.
Abdul-Karim notes that the present situation is in
any case an improvement on the days of the
Saddam-era Oil-for-Food Programme under which the
United Nations allocated just 13 per cent of Iraqi
oil revenues to Kurdistan, which then enjoyed de
facto autonomy from Baghdad.
“The 17 percent may be enough if we look at the
damage done to other parts of Iraq, especially the
south,” he said.
Samir Hasan of Baghdad’s Oil Institute took the same
line, suggesting that funding at any level went
further in the more stable, and more efficiently
run, Kurdish areas.
“Right now, millions of dollars is being spent to
control the security situation while the security
situation in Kurdistan is stable,” he said. “So the
Kurds can make use of their portion more easily than
other parts of Iraq.”
Hasan said that - as set out in the TAL - it was
fair for the revenue division to take into
consideration the damage and repression done to
particular regions by Saddam’s regime as well as
simple demographics. But he said the Kurds must
understand that all Iraqis were oppressed and Iraq’s
treasury is already exhausted.
One reason for avoiding a fierce public debate over
the percentages may be the still unresolved issue of
Kirkuk. Many Kurds want a new federal version of
their region to be expanded to take in Kirkuk and
parts of Mosul. That would not only shift the
demographics - giving them a bigger population on
which to base any claims - but in practice it would
provide considerable de facto control of natural
resources on the ground, even though these will
continue to be managed by the oil ministry in
Baghdad.
Kirkuk represents something of a prize, with its
substantial oil reserves, but the Kurds’ historical
claim is hotly disputed by the Turkoman and Arab
communities who live there, and who do not want to
see it become part of a federal Kurdistan.
Massoud Barzani, the president of Iraqi Kurdistan,
has joined other Kurdish politicians in calling for
Kirkuk’s status to be set out clearly in the
constitution. But Iraqi president Jalal Talabani -
himself a Kurd - reaffirmed the official position,
that the Kirkuk issue will not be resolved until
after the constitution has been drafted.
Duraed Salman is an IWPR trainee in Baghdad.
www.iwpr.net
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