As 25th September approaches, the eyes of the world would be focussed upon the Middle East and the repercussions of the Referendum for Kurdistan, which has brought the issue ‘Self Determination’ to the vanguard once again. Following up with the last piece, this article delves into the economics of Kurdistan and the regional impact it can have on the region.
The Kurds, divided in over four countries, thanks to the slicing and dicing post World War I are a unique phenomenon in terms of their rising nationalist demands, despite their heterogeneity. They are geographically and culturally diverse, speak Kurdish, are Sunni Muslims and are quite politically dissimilar too. Yet their aspiration for a homeland cannot be termed as unacceptable, as for many centuries, this demand has been ignored by countries.
The Economics of Kurdistan
The politics of Middle East is deeply embroiled in the economics of energy and of oil and gas production. The momentum, with which the demand for Kurdistan has come forth in recent times, is an apt example of this geopolitics in a continuously evolving and transforming region.
“With a whopping 45 billion gallons of Kurdistan oil reserves, the Iraqi-Kurds hold almost a third of all of Iraq’s 150 billion gallons of untapped black gold. If the Kurdish Regional Government autonomous region were a nation-state, it would rank 10th in the world for largest petrol reserves, coming in just after Libya” .
“Current production from the fields in northern Iraq held by the Kurdistan Regional Government (KRG) is around 600,000 bpd —roughly the output of OPEC member Qatar” . The extraction in Iraqi Kurdistan began in 2007, and hosts Chevron, Exxon Mobile, Gulf Keystone, Hess, Total  and over 50 other major petroleum players.
There are also talks of Rosneft, the Russian giant, coming into the picture for an oil pipeline between Iraqi Kurdistan and Turkey  and there are plans of KPG to increase oil output exponentially to 2 millions of barrels per day within the next two years. This changing energy politics has been the main reason why the demand for Kurdistan has revitalized and made the world take notice.
Where do other countries stand?
Creation of Kurdistan would definitely open a rabbit hole which can lead to a massive domino effect in this region. Most of the neighbours do not want rushed sovereignty for Kurdistan, considering they need to mitigate the backlash that is bound to happen, politically, strategically and economically. Therefore, the referendum was greeted by criticism throughout because is not just Iraq, Turkey, Iran and Syria, but the world which can face a serious challenge if Kurdistan were to come into existence suddenly, post the 25th September referendum.
Iraq has made an aggressive stand against this vote as it would be their territory that would be partitioned, even causing the country to collapse. Turkey has decided to impose sanctions if KPG referendum goes on, though they’ve mentioned before that they would not mind a slow and delayed process for independence of Kurdistan.
Tehran has been expanding its contact with KRG too, but at this moment has declared that it recognises only unified Iraq and would not recognise Kurdistan, possibly afraid that it would embolden its Kurdish population to separate. Syria and the Kurdish groups had a tacit alliance when it came to ISIS, yet can be best described as frenemies, hence the KRG and YPG are pushing their boundaries politically as far as Syria is concerned.
The United States, embedded in its own problems in this region and apparently preferring the status quo, at least implicitly, is not keen on engaging with a new nation state. The US presence in Syria has also been questioned, as to whether the true aims are to tackle ISIS or to maintain its hegemonic control over Middle East, making their stand against Kurdistan another devious ploy. The European Union has asked KRG not to take any unilateral action calling it counterproductive . Russia has has implicitly supported the independence of Kurdistan while India, which has an operating Consulate General in Erbil, has been apprehensive in taking any stand in present time.
However, apart from the political and economical scenario, the ever changing equations of the Shia-Sunni divide and their political dominance in Middle East need to be taken into consideration, when we think of Kurdish independence. This is what makes Kurdistan an interesting conundrum in the geopolitics and it looks like even if Kurdistan becomes a de facto state; it would not be a de jure state immediately .
Now the decision rests in the hands of Erbil, whether to go ahead or to pace out this process. Moreover, as reported by the Economist , “Iraqi Kurdistan’s economy is still a rentier one, based almost solely on oil. It sorely needs to diversify. Banking, commercial law and basic services such as the post are all rudimentary.” The country, surrounded by antagonist powers and Jihadists on all sides, will have to build upon its basic infrastructure to even survive. Their present state has drawn comparisons to Israel of 1948, yet we must not forget Israel had the backing of a powerful US which is not the case with Kurdistan. As a consequence, KRG needs to proceed with caution..
- http://blogs.platts.com/2014/01/30/map-iraqs-oil-gas-infrastruture/ Image of Iraq’s oil and gas infrastructure
- http://www.euronews.com/2017/09/20/explained-kurdistan-s-controversial-independence-referendum Image of Kurdistan