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New at FP: Federalism and Libya’s Oil

You can read my newest article at Foreign Policy, titled “Federalism and Libya’s Oil“.  It focuses on Libya’s loudest and most troublesome federalist, Ibrahim Jadran, and his struggle to sell oil independently. From one of the opening paragraphs:

While other oil fields and facilities were shut by protests last year, Jadran is unique for his ambition and media savvy. His oil blockade costs Libya about $60 million every day; his leadership of an aspiring regional government makes him the most recognizable thorn in the government’s side; and his youthfulness, immaculate suits, and talking points make the 32-year old look and sound like a serious politician. He is successful insofar as he remains unchallenged, although rookie mistakes have hurt his brand lately. Six months into the oil crisis he precipitated, Jadran has not budged — but he also has nothing to show for it.


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One graph says a lot–my article says the rest

The Atlantic Council just published my newest article on the strikes that are crippling Libya’s oil industry, titled “No End in Sight for Libya’s Oil Drama.” How bad is it?


The Atlantic Council has produced some of the best research and analysis on Libya this year–and I’m thrilled to contribute to their MENA Source blog. I highly recommend recent reports on Libya’s General National Congress and economic prospects. Yesterday, the Council hosted an event, Libya’s Transition and the Future of US-Libyan Relations, that is now available on video and worth watching.

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What are Iran’s Reformists Thinking?

Today’s guest author is Reza H. Akbari (@rezahakbari). Reza is a Middle East researcher in Washington, DC. He received his MA in Middle East Studies from the George Washington University in 2011. His May article, titled “Ahmadinejad’s Last Stand,” was one of the most widely read articles on Al Ajnabee.

Undoubtedly, the disqualification of Hashemi Rafsanjani stacked the deck in favor of the Supreme Leader and the conservative elites by paving the way for the election of a candidate utterly loyal to the regime. Disqualifying Rafsanjani has, once again, confirmed that the regime’s inner circle is shrinking and that power is becoming more centralized than ever ahead of the presidential election on June 14 (and a possible run-off on June 21).

But why was the reformist faction counting on Hashemi Rafsanjani and why are they currently backing Hassan Rouhani? As long time regime insiders they can hardly be labeled as reformists.

The answer is simple. There is no alternative.

Following the 2009 disputed presidential election in Iran, all major reformist factions were ousted from the political scene and hundreds of reform-minded politicians, activists, and journalists were purged from public life. The 2009 reformist candidates, Mir Hossein Mousavi and Mehdi Karroubi, are still under house arrest at unknown locations.

Significantly debilitated, reformists were left to wonder about their future in a seemingly exclusive regime. Realizing that no major reformist candidate would have a chance of getting through the vetting process carried out by the Guardian Council—the 12-member conservative body in charge of qualifying all election candidates—they viewed Rafsanjani’s decision to run as a blessing.

As one of the founding members of the Islamic Republic, and the current chairman of the Expediency Council, Rafsanjani presented the best chance for the opposition factions in Iran. His long resume included influential positions such as the Chairman of the Assembly of Experts, Speaker of the Parliament, Interior Minister, the de facto commander-in-chief of the military during the Iran-Iraq War (1980-1988). He is also credited for buttressing Ayatollah Khamenei’s ascendency to Supreme Leadership. The possibility of his disqualification by the ruling conservatives seemed slim, making him the only logical option at the time.


Currently, there seems to be major divisions within the reformists about election participation in the Islamic Republic. Reformists led by former president Mohammad Khatami announced on June 10 that they will endorse Hassan Rouhani, a moderate cleric who is also backed by Hashemi Rafsanjani.

Rouhani is a member of the Assembly of Experts and the Supreme National Security Council. He has inched closer to the reformists, but more than likely he is vying for popular support, and does not have any genuine plans for transforming the system.

Hassan Rouhani (pictured) now has the support of former presidents Khatami and Rafsanjani

As a long time member of the country’s Supreme National Security Council and the former chief nuclear negotiator, he has proven loyal to the ruling establishment and has managed to retain his positions even after the 2009 shake-up. More than likely, anyone expecting him to cross the regime’s redlines will be disappointed. But he could help ease Iran’s international isolation by being less confrontational and sensational than his predecessor.

Once again reformists find themselves with no alternatives. Presidential candidate Mohammad Reza Aref, former President Khatami’s Minister of Technology, was the sole reformist candidate who dropped out in favor of Rouhani on June 10. Aref did not have the clout to be a real threat in a race packed with conservative heavyweights.

Nonetheless, a quote from him best explains the position of reformists who favor participation: “Boycotting the election is not a form of protest, it is retreating.”


By voting for Rouhani, reformists hope to create enough breathing room for the country’s diaspora to reignite the same grassroots activism experienced during Khatami’s presidency. The Supreme Leader may set clear limits but Rouhani’s moderate tone and pragmatism are appealing when measured against some other candidates.

Such an opening may allow the reformist faction to revive the activities of the Islamic Iran Participation Front, a dominant reformist political group, credited for implementing the reformist agenda during Khatami’s presidency (1997-2005). In June 2009, Mohsen Mirdamadi, Saeed Hajarian and other prominent leaders of the party were arrested and the group was essentially dismantled. Mirdamadi is currently serving the remainder of his six-year sentence in Evin prison.

The release of Mousavi, Karroubi, and other political prisoners such as Mostafa Tajzadeh is another top priority for reformists in favor of participating in the upcoming election. Tajzadeh, a former Political Deputy Minister of Interior, was one of the seven leading reformists who sued several IRGC commanders for their alleged intervention in the 2009 presidential election. By electing a moderate figure such as Rouhani, they hope to reach that goal.


However, the reformists are far from united. In a recent statement published on June 4, the Mujahideen of the Islamic Revolution, a reformist political faction formed in 1991, asked the country’s reformists to boycott the upcoming election and refrain from supporting a candidate.

A statement released by the group said, “The upcoming presidential elections should not be viewed as legitimate” and the results will “more than likely be engineered.” The majority of the reformists who signed the statement live abroad and allegedly represent the point of view of this domestic faction.

Ayatollah Mohmmad Mousavi Khoeiniha, an Iranian cleric and the secretary general of the reformist Association of Combatant Clerics, has also voiced his disapproval of the upcoming election.

“I do not believe in election participation under any circumstances. Participation will only harm the reform movement… Election participation should be dignified. Election participation should be within the framework of improving the goals of the reform movement. We should not allow the current ruling faction…to lead us to a dead end,” Khoeiniha stated.

The reformist group opposing election participation is less clear about its ultimate goals. Given the country’s current intolerant state, they view participation to be superfluous and serving the interests of the ruling conservatives.


Iranian reformists are not naïve. Even Khatami indicated his doubt about the undemocratic nature of the election in prior months. “Even if we [reformists] are qualified, we will not have the right to get any more votes than what they [ruling conservatives] have already decided,” Khatami stated in a speech to university students in Tehran on May 9.

So, the problem for the reformist opposition is not their lack of understanding of the domestic political dynamics or being blindly optimistic about the future. The issue is their inability to reach a consensus about the regime’s ability to reform.

The regime has repeatedly cracked down on any meaningful reforms. Amid the height of the reformist era in the 1990s, popular student protests were crushed, prominent reformists were jailed and threatened, hundreds of reformist parliamentary members were banned from reelection in 2004, and hundreds of other reform-minded activists were jailed and threatened in 2009.

The current goal is to get Rouhani elected in order to create space for the reformists. But what if he is not the winner?

This is an uncomfortable impasse for reformists. If reforms are no longer possible, then what is the alternative? The Iranian opposition — and perhaps the greater public — is not ready to answer that question yet.

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Ahmadinejad’s Last Stand

Our guest author today is Reza H. Akbari (@rezahakbari). He is a Middle East researcher in Washington, DC and received his MA from the George Washington University. Reza’s last post for Al Ajnabee explored the diversity of conservative trends in Iranian politics.

Iran’s complex bureaucracy is slowly getting ready for another presidential election in June, but thus far the dynamic between the president’s faction and the regime has proven to be far from the ordinary.

Mahmoud Ahmadinejad’s tenure in office will be officially over this summer, however, he may not be ready to go down without a fight. Despite all warnings from regime officials, the president seems adamant about engineering a campaign victory for his right-hand man, Esfandiar Rahim Mashaei.

President Ahmadinejad (center) and Esfandiar Rahim Mashaei (left)

Rahim Mashaei has not officially announced his candidacy, but the campaign seems to be well on its way. Numerous analyses suggest that Ahmadinejad’s faction will not have a chance in the election. More than likely any candidate perceived to be associated with the “deviant faction” – a term used to refer to the president’s supporters and his controversial ally Rahim Mashaei – will be disqualified by the Guardian Council and eliminated from the political arena. So, why is Ahmadinejad still campaigning? And how does the government perceive the intentions of the “deviant faction?”

Shortly after the 2009 presidential election, regime stalwarts began referring to Ahmadinejad and his camp as the deviant faction. The rift began when the president publicly challenged the Supreme Leader over his constitutional right to choose the government’s ministers. The critics believe Ahmadinejad’s brand of politics has deviated from the path of the velayat-e faqih or rule by jurisprudence.


Ahmadinejad knows the history of the Islamic Republic well. As evidenced by the fate of his predecessors, Ahmadinejad understands that the regime is not kind to losers. The defeated tend to be marginalized, access to the state controlled media is lost, and at times they are even physically harmed.

Mohammad Khatami and his reformist allies were denied any major national prominence after his presidency ended in 2005. Another president, Hashemi Rafsanjani, was ousted from influential positions, after he called for unity following the 2009 presidential election. Mir Hossein Mousavi and Mehdi Karroubi, former regime members and presidential candidates, are still under house arrest at an unknown location.

Given his reputation among the influential regime members, Ahmadinejad recognizes that a dark horizon also awaits him and his camp. So, why stop fighting now?

In Ahmadinejad’s mind, the true test of his legacy will come in the next two months. Ahmadinejad has proven over and over again that he is not willing to go down without a fight and the home stretch is no time to quit. The best-case scenario will be for him to grant a safe passage for Mashaei through the Guardian Council’s vetting process, or at least assure that his faction will survive after he is no longer in office. He may even succeed in rallying the public opinion behind his camp, which may offer some kind of protection after he leaves the office.

The exact next steps of the president’s camp are not clear, but the regime should beware of a man with nothing to lose. The president has demonstrated that he is even willing to play dirty. As displayed on the floor of the parliament during an altercation with the speaker, Ali Larijani, Ahmadinejad is not afraid to publicly disclose sensitive information. In early February, Ahmadinejad challenged Larijani by accusing him of patronage, corruption, and “mafia-like rule.” He went so far as to play a tape of what he claimed was a recording of a conversation between Tehran’s Chief Prosecutor, Saeed Mortazavi, and Fazel Larijani, the speaker’s brother.

According to the tape, the Larijani family had used its prominence for economic gain. Larijani refuted the relevance of the tape and labeled it as blackmail. This unparalleled public confrontation forced the Supreme Leader issue harsh warnings. Ahmadinejad may have similar evidence and, more than likely, he will use such unorthodox tactics to ensure his longevity until the June presidential elections.

In the meantime, Ahmadinejad is doing all he can to paint himself as a populist president by paying lip service to the public. During his trip to the Khuzestan Province in southwestern Iran on April 22, Ahmadinejad announced, “They have sent a message saying that if I become any bolder, they will try to hurt me. I will fight in the service of justice, revolution, and people…until death. Thousands of Ahmadinejads are not worth as much as a drop of justice or a piece of hair from the head of an Iranian citizen.”

During his trip to Semnan Province on April 11, the president went so far as to throw a jab at the Supreme Leader and the ruling establishment. “Some say that the Leader’s opinion dictates that this person should run and that person should not [campaign]. How is this any of your business? The people should decide. All [political] types should run,” Ahmadinejad announced.

The president’s camp also hosted an event on April 18 at Tehran’s Azadi Stadium. The government had previously announced that the event’s purpose was to “acknowledge the servants of Norouz [the Iranian New Year].” However, critics of Ahmadinejad called it an illegal “election gathering,” because many expected Ahmadinejad to bring his chosen successor, Rahim Mashaei.

The controversial rally was held despite the president’s opponents accusing him of spending public funds for an extravagant gathering with political intentions. According to Hossein Shariatmadari, the editor-in-chief of Keyhan, a conservative newspaper close to the Supreme Leader, $40 million was spent on organizing the event. In an editorial written on April 23, Shariatmadari questioned the genuineness the president’s calls for justice and equality. “$40 million was taken away from the oppressed and disposed people in order to organize an election advertising event for Mr. Mashaei in the Azadi stadium. Is this an example of Mr. president’s justice seeking?”

According to IRNA news agency, nearly 70,000 supporters were in attendance, but the Iranian state media showed footage of almost deserted bleachers. Supporters of the president claimed that the video angles were chosen purposefully to only capture the empty areas, and make the event look like a failure.


Ahmadinejad rarely provides any details about the threats he receives, but it is safe to say that he is being pressured by regime officials to end his uncouth behavior. More than likely traditional conservatives do not view Ahmadinejad as a legitimate political threat to their chances of an election victory. The Guardian Council, the major constitutional body in charge of vetting the candidates, is under their control, so any candidate supported by the president could easily be disqualified. But they still view the president as someone who could further damage their personal reputations and the regime’s legitimacy.

More than once Ahmadinejad has announced that he is willing to publicize confidential records exposing his opponent’s past indiscretions. According to the BBC Persian service, during his visit to the Khuzestan Province, the president once again made his intentions public.

“Some send messages saying that they will confront me because of some of my statements. You are nothing in front of the will of the Iranian nation. This nation has stood up in front of the biggest oppressors; compared to them you [traditional conservatives] are nothing. If only the smallest part of your past behaviors are exposed, you will lose your place among the people,” Ahmadinejad declared. Many influential members of the political establishment have warned Iran’s outgoing president about his bombastic behavior, but to no avail.

On April 12, Ayatollah Momen, an influential member of the Guardian Council, warned Ahmadinejad and his camp by stating, “Don’t have any doubt. If we just sense a little deviation from a [candidate], we will disqualify him.” According to the Young Journalists Club, an Iranian semi-official news agency, Sadeq Larijani, the head of the country’s judicial system, criticized Ahmadinejad’s election efforts, saying “Unfortunately, some activities that are carried out with the government’s budget feel like election campaigns.” He continued by adding that such actions are considered to be a “crime” and the Guardian Council and the Judiciary are closely watching the perpetrators.

On April 23, Major General Hassan Firuzabadi, Chief of Staff of the Iranian Armed Forces, rejected the validity of any threats aimed at Ahmadinejad and advised him to be more measured in his claims. According to Mehr News, a semi-official news agency, Firuzabadi labeled Ahmadinejad’s statements as “unacceptable” and aimed at “disturbing the public opinion.” He added, “Mr. Ahmadinejad should stop making such statements.”

The warnings go on, but the regime is not counting on Ahmadinejad to listen. Security preparations are underway to insure a safe and calm election season. Of course, such moves include but are not limited to just concerns about Ahmadinejad’s deviant faction. Having experienced months of instability following the disputed 2009 presidential election, the regime is not taking any unnecessary risks.

It is difficult to assess Ahmadinejad’s ability or willingness to create the kind unrest seen in 2009. But, in the regime’s point of view, any potential for instability is considered a risk; so it’s always better to be safe than sorry.

In an interview with Mehr News on April 22, Firuzabadi also stated that the Iranian armed forces are “completely ready to confront any potential sedition” in the upcoming June elections. “Our armed forces are highly trained and experienced. They have the experience of the 2009 sedition, so they are familiar with the manner and the details of how to confront any potential dangers.”

On April 19, Iranian Police Chief Brigadier General Esmail Ahmadi Moghaddam announced the reimplementation of new “moral and security” measures ahead of the upcoming elections. The move follows an April 16 announcement by Deputy Police Chief Brigadier General Saeed Montazeralmehdi on that an elections headquarters would be created for police to provide security for the elections and monitor anti-regime websites and social media.

The Cultural Ministry also recently announced that all mass text messages sent from election campaigns should be preapproved. According to TELNA, an Iranian information technology website, the spokesperson for ministry stated, “All SMS messages must be sent from traceable and known numbers…the content of such messages will also be controlled.”

In the coming months the battle between the president’s camp and the establishment will intensify. It is impossible to predict Ahmadinejad’s next move, but one thing that is guaranteed is his willingness to fight until the last breath. He does not have that many alternatives. He has to remain aggressive all the way up to the election, since otherwise he risks impending obsoleteness.

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KRG’s Talking Points on Display in DC

From the Facebook page of the KRG’s Representative in the US.

A high-profile delegation from the Kurdistan Regional Government visited Washington, DC last week. Speaking on behalf of the KRG were: Fuad Hussein, chief of staff to KRG President Massoud Barzani; Natural Resource Minister Ashti Hawrami; Falah Bakir, Director of the KRG’s Foreign Relations Department; and former KRG envoy Qubad Talabani, now Director of the KRG’s Coordination and Follow-Up Department.

The timing of the mission’s visit is telling: it arrived in Washington just weeks before Turkish premiere Recep Tayyip Erdogan is set to visit the White House. The main topic discussed by the delegation—during joint panels and speeches—was Iraqi Kurdistan’s relationship with Turkey. Over the past five years, this relationship has grown rapidly. It constitutes a majority of Iraq-Turkey trade.

Normally, the U.S. would champion prosperity and peace between neighbors who, just years before, were totally at odds over the question of Kurdish independence. But today, U.S. officials worry that Turkey and the KRG are ready to forfeit Iraq’s unity in favor of a comprehensive energy deal. That deal—if signed—would presumably connect Kurdish oil fields to Turkey and world markets. Conventional wisdom dictates that this move would grant the KRG independent oil revenues and enable it to withdraw from Baghdad’s orbit. In the worst-case scenario, the KRG would go its own way; Iraq would become a less diverse rump state with a weaker political opposition.

The KRG came to D.C. to relieve these fears and change minds before Prime Minister Erdogan arrives. Their talking points were sharp and polished. I say this as someone who saw the mission in person at George Washington University and the Atlantic Council on April 8.

Over the course of last week, the delegation met with Deputy National Security Adviser Tony Blinken and Acting Assistant Secretary of State for Near Eastern Affairs Beth Jones. According to an April 16 press release: “The delegation met with Congressional leaders and other key members of Congress, both Democrats and Republicans including the House Majority Leader, Rep. Eric Cantor (R-VA); Rep. Christopher Van Hollen (D-MD); Foreign Affairs Committee chairman, Rep. Ed Royce (R-CA); Intelligence Committee chairman, Mike Rogers (R-MI); Senator John McCain (R-AZ); Senator Roger Wicker (R-MS), as well as members of the Kurdish American Congressional Caucus including its new Democratic co-chair, Rep. Jarred Polis (D-CO).” (For pictures see last week’s entries on the KRG’s Facebook page.)

With this post I want to give readers a sense of how officials are framing the issues and what they’re seeking from the U.S. Much of this blog post is paraphrased unless quotation marks are used. The two events I attended were on-the-record and covered by media outlets so nothing confidential is contained herein. You can find audio and a copy of Hawrami’s prepared remarks on the Council’s website. Also be sure to read his April 14 op-ed for Real Clear World.

The delegation focused on the constitutionality of any future arrangement with Turkey. The KRG believes Iraq’s constitution allows the region to sign a bilateral trade deal with a foreign government without Baghdad’s input. Officials maintain that revenues from oil sales will be divided according to long-standing oil revenue-sharing agreements. Kurdish officials frequently cite a legal finding provided by a British law firm that upholds their claims—and they referenced it in D.C. more than once. Until it is tested in court, however, there is no telling how the argument will hold up if challenged by Baghdad, which has threatened to sue companies that export Kurdish oil.

Iraqi Prime Minister Nouri al-Maliki gives the KRG no choice but to sign these deals and pursue new infrastructure. Maliki represents the greatest threat to Iraqi unity because of his sectarian approach and refusal to apply the constitution. In his remarks at the Atlantic Council, Hawrami, the energy minister, said that the concentration of power for Iraq’s oil sector is unfair: “It’s what it was under Saddam Hussein.” He argued that oil and revenues are key sources of power in Iraq. As such, the U.S. cannot insist that Baghdad has final say on oil deals or export agreements. Maliki has no interest in developing Kurdish oil fields.

The sense of frustration and urgency felt by the Kurds was very real. They want to act now. In order to improve ties between Baghdad and Erbil, the only choice is to change the situation on the ground, and pursue reconciliation after the KRG’s success makes the central government reconsider its hard-line position. This argument makes sense given the long time horizons associated with the oil and gas industry (pipelines take months to build; commercial oil production levels are only achieved after years of surveys and drilling; etc.).

The Kurds want to initiate deals now because other options are no good. They could wait years more for an Iraqi oil law. Or they could wait for Maliki to change his mind or leave office.

Kurdish independence is a “myth,” Hawrami said. For the foreseeable future, the KRG wants its fair share of Iraq’s wealth, as guaranteed by the constitution. Erbil wants a federal system. But a decentralized oil policy is essential to that arrangement, meaning that the Kurds must be allowed to exploit resources and sell oil. A bruising fight over the Iraqi budget earlier this year has only confirmed for the Kurds that they need control over a revenue stream of their own. They cannot trust Maliki and his allies in parliament to produce a fair budget.

Hawrami’s most memorable line was delivered with a smile: “Iraq is a rich country. We want a share of that wealth… If even we have any motive for independence, we will wait until the last drop of Iraqi oil [is pumped and sold]—and then we might do something” (25:00 minute mark). The Kurds don’t want to prematurely cut themselves off when Iraq’s production could double or triple in the coming decades. Kurdistan may contain 45 billion barrels of recoverable oil. Iraq now estimates that the country holds 150 billion barrels total, placing it fifth in the world for proven reserves.

There is another upside to a Turkey-KRG deal and it has to do with Kurdish independence beyond Iraq. Hawrami suggested that the KRG’s dealings with Turkey had actually buoyed Erdogan’s outreach to Kurdish insurgents in his own country. How so? Cooperation with the KRG proved that the Turkish government was reliable; these ties gave the PKK confidence in Ankara’s sincerity.

Washington must adopt a neutral policy instead of backing Baghdad. Supporting Maliki in the name of “Iraqi unity” is a mistake. Supporting the constitution (i.e. the Kurdish reading of it) will prevent the country from fracturing. The Kurds recognize that U.S. influence over Baghdad is limited today. Washington prioritizes Iraqi “stability” above all but it has no real vision or policy for achieving that end, they say. Instead, Washington insists on reconciliation with Maliki, which favors central authority by default. Hawrami said the KRG can’t wait another seven years and do nothing. (Note: Maliki became PM in 2006.) The US approach is “outdated.”

Publicly-traded oil companies operating in the KRG slashed production in December because they could not rely on prompt payment from the central government. The newest Iraqi budget, which Hawrami called a “punishment,” provides only $650 million for operator costs in Kurdish territory, whereas the KRG demanded $3.5 billion. Kurdish oil exports flirted with 200,000 b/d late last year; volumes have since fallen to roughly 50,000 b/d, all of which is trucked across the border into Turkey because the federal government can’t be trusted to ship oil and compensate the Kurds as they see fit.

Looking forward, Hawrami believes the KRG can produce 2 million b/d by the end of the decade, most of which would be exported. A new pipeline like the one being considered by Turkey and the KRG would allow Iraq to sell ~3 million b/d through a northern corridor if the Kurdish and federal pipelines all become fully operational. As a rule, supply diversity is the best guard against energy insecurity. Hawrami mentioned “market stability” as an incentive for a deal with the Turks, something the U.S. can get behind.

Finally, the U.S. should not deter companies from operating in the KRG, the delegation said. The region is no different from anywhere else in Iraq. This goes back to the central theme of neutrality.

Kurdish prosperity will serve Iraq’s interests even if it angers Maliki. Speaking at the Atlantic Council, Hawrami said, “The KRG is confident that once oil export revenues are generated by KRG, and shared constitutionally, then Baghdad will become more reasonable, accepting a constitutional settlement on power and revenue sharing, thus creating lasting stability and unity in Iraq.”*

This kind of success, reinforced by timely transactions, will convince the people of Iraq—not just politicians—that the KRG was right all along. It will change minds and encourage the adoption of the constitution in practice. Kurdistan’s reputation for development and better services may even trickle down to the rest of Iraq, as more and more people ask: what are the Kurds doing right?

Conclusion: It’s hard to tell how successful the KRG mission was. We know who they met with but it’s impossible to tell how receptive their American counterparts were. Jackson Diehl of the Washington Post wrote an approving editorial on April 14 after meeting with at least one member of the delegation. That article ended with Diehl, a critic of Obama’s foreign policy generally, arguing that the U.S. policy towards the KRG was “wrongheaded.” Instead, Washington should encourage what he called Kurdistan’s “renaissance.”

The Kurds made a strong case last week. The rest is up to Erdogan when he raises the issue with Obama next month.

* Note: Revenue sharing is a thornier issue than first glance might suggest. Right now, the two sides disagree on the number and cost of “sovereign expenses,” which have cut the Kurds’ budget share year-on-year from 17 percent to about 10 percent. Might the Kurds push back once they control revenues? Could they retake 17 percent in full or compromise closer to 15 percent? Hawrami told the Associated Press on April 12 that the KRG will return revenues to Baghdad “after it has taken its legal allocation and paid contractors.”)

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Erdogan’s Case for KRG Oil Exports

The Middle East Policy Council published my new briefing yesterday on the Turkish prime minister’s upcoming visit to Washington. Titled “Erdogan’s Case for KRG Oil Exports,” the article skips the issues that the U.S. and Turkey agree on, and instead focuses on a much thornier problem. By all indications, the Obama administration opposes future energy deals between Turkey and Iraqi Kurdistan. The White House is afraid that any comprehensive deal could supercharge Kurdish aspirations for independence, dissolve Iraq, or at the very least heighten the risk of conflict. Although American anxiety is sincere, the Turks and Kurds believe it is misplaced. They are convinced an energy deal will benefit all Iraqis–even if Baghdad appears irreconcilable for now. To paraphrase the KRG’s Minister of Natural Resources, who spoke this week at the Atlantic Council, “Baghdad will be more reasonable after they get their cut.”

From the section Erdogan’s Challenge:

If Erdogan is serious about pursuing a comprehensive energy deal, then he will have to explain the Kurdish side of their dispute with Maliki and point to the absence of the U.S. as an honest broker. As long as the U.S. and other members of the UN Security Council take Baghdad’s side in the dispute, any KRG exports to world markets could be rigorously challenged by Baghdad in various judicial venues. Erdogan’s case is made stronger by other negative developments in Iraq that reflect poorly on Maliki.

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Baghdad and Washington at Odds Over Syria’s Future

U.S. Sec. of State John Kerry was sworn in on February 1, 2013

The Los Angeles Times reported yesterday that Iran is still using Iraqi airspace to shuttle weapons to Bashar al-Assad’s forces in Syria. This arrangement was first reported a year ago, to the dismay of U.S. officials who hoped Iraqi Prime Minister Nouri al-Maliki would stop it. Baghdad promised last year to inspect Iranian cargoes. However, according to anonymous sources quoted by the Times, they have not done so since two planes were brought down in October, one of which was inspected after its cargo was discharged in Syria. On February 25, the New York Times quoted an American official who said the shipments were so routine they could be called “a milk run.”

No doubt these shipments have taken on greater importance in recent weeks. Syria’s rebels “scored a string of strategic victories” early this year and aid from outside sources is strengthening the resistance. Even though the war has not reached a tipping point, Assad needs all the help he can get. And Iran is happy to help. He may need more assistance now than ever before, as the U.S. reconsiders its options, the second anniversary of the uprising approaches, the capital becomes less secure, and the death toll eclipses 70,000.

The sectarian conflict in Syria is deeply unsettling for Maliki. Assad and his most loyal forces belong to the Alawite offshoot of Shia Islam, while certain religious minorities have gravitated to his side or remained neutral out of fear. By all accounts, the resistance draws its power from the country’s Sunni majority; it represents both secular and ultra-conservative trends, all of which aim to drive Assad from power.

Maliki’s logic is simple. The prime minister, who belongs to Iraq’s Shia majority, is worried that Assad’s ouster could inspire Sunnis to rise up in Iraq or—at the very least—resist his rule, which many complain is autocratic. He fears the spill-over effects of a new insurgency, like the one Maliki faced when he first became prime minister in 2006. “Neither the opposition [in Syria] nor the regime can finish each other off,” Maliki told the Associated Press in a February 27 interview. “If the opposition is victorious, there will be a civil war in Lebanon, divisions in Jordan and a sectarian war in Iraq.”

More specifically, Maliki is worried about the strong cross-border ties that connect Sunnis in Iraq’s Anbar province with those fighting Assad next door. For years, Anbar was the beating heart of the anti-American, anti-government insurgency following the 2003 invasion. Violence there subsided only after Sunni militias joined forces with the U.S. to fight Al Qaeda in Iraq.

At the end of last year, outraged Sunnis took to the streets in increasingly large demonstrations against Maliki’s government. They accuse Baghdad of systematic intimidation and abuse. As proof, they point to high-profile cases in which Sunni politicians, including Vice President Tariq al-Hashemi, were charged with crimes against the state—despite a lack of evidence and the use of forced, televised confessions (a hallmark of Saddam Hussein’s rule). Hashemi has been sentenced to death five times in absentia; he now lives in exile. In December, the security detail of Sunni politician and Iraqi Finance Minister Rafi al-Issawi was arrested, kicking off the newest wave of protests. Channeling demands heard elsewhere in the Arab world, demonstrators are calling for the downfall of “the regime.”

Maliki says the Anbar protests can continue but he is eager to dismiss them. Like other Arab heads of state—both democratically elected and self-appointed—he swears the demonstrations are sponsored by foreign powers. At the same time, he has made some concessions, freeing about 4,000 prisoners in order to satisfy Sunni demands. Thus far, his calls for dialogue have not gained traction.

It’s worth noting that Maliki is already locking horns with the Kurdistan Regional Government, the semi-autonomous grouping of provinces in Iraq’s north (these are administered by Erbil rather than Baghdad). The two sides have exchanged threats over oil contracts, export rights, the constitution, and revenues. The KRG and federal government even deployed forces and heavy artillery to disputed provinces in November.

For the prime minister, raising the stakes and risking conflict in the country’s west at the same time may not be an option, especially if it backfires or changes attitudes ahead of Iraq’s upcoming provincial elections. Instead, Maliki has relied on a friendly judiciary to undercut his enemies, security forces to do his bidding, and the Assad regime to suffocate an insurgency before it can poison Iraq’s western territory. Turning a blind eye to Iran’s aid achieves this end.

Iraq’s refusal to intercept Iranian aid to Syria has not been overlooked by Washington. In a September 2012 hearing, Senator John Kerry told Robert Beecroft, now the U.S. Ambassador to Iraq, that aid to Baghdad should be conditional. Informed that Iraq had already been engaged on the matter, Kerry said:

“Well, I mean, it may stop when it’s too late. If so many people have entreated the government to stop and that doesn’t seem to be having an impact, that sort of alarms me a little bit and seems to send a signal to me maybe we should make some of our assistance or some of our support contingent on some kind of appropriate response… it just seems completely inappropriate that we’re trying to help build their democracy, support them, put American lives on the line, money into the country and they’re working against our interest so overtly—against their interests too, I might add.”

Kerry is now Secretary of State. He is closer to President Obama than ever before and his counsel will carry additional weight. It’s unclear if he still thinks holding back aid is a wise choice. But it is one of the only remaining points of leverage the U.S. has now that the occupation is over. In FY 2012, the U.S. provided $1.7 billion of aid to Iraq. That sum could climb over $2 billion in FY 2013.  And, in 2014, Iraq is set to receive its first batch of American-made F-16 fighter jets. This administration doesn’t want to act directly in Syria by arming rebels or intervening militarily. So cutting off Iranian supplies to Assad may be the easier option, even if it complicates relations with Iraq.

Maliki, for his part, may seek to avoid being leveraged, however, as I’ve argued before. Last year, a $4.2 billion deal for Russian military hardware collapsed at the last minute when accusations of corruption were revealed. Officials later said that the deal would be renegotiated. This past week, another deal—this one for roughly $1 billion of Czech aircraft—also fell through.

If the U.S. attempts to leverage Maliki by making aid conditional or withholding military sales, look for both of these deals to be revived soon. Any American threat would be conveyed quietly at first, behind closed doors, so that Maliki is not humiliated. And given the tremendous investment made by the U.S. in Iraq over the past decade, we should expect Washington to give Maliki another chance to redeem himself. But if the Russian and Czech arms deals are seriously expanded in the coming months, it may be the first signal that Maliki is preparing other options in case he’s punished for enabling Syria’s crackdown.

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