Despite some progress, Iraq’s legislative agenda, promoted by the United States in order to capitalize on recent security gains, is bogged down. The main culprit is a dispute over territories claimed by the Kurds as historically belonging to Kurdistan—territories that contain as much as 13 percent of Iraq’s proven oil reserves. This conflict reflects a deep schism between Arabs and Kurds that began with the creation of modern Iraq after World War I. … In its ethnically-driven intensity, ability to drag in regional players such as Turkey and Iran and potentially devastating impact on efforts to rebuild a fragmented state, matches and arguably exceeds the Sunni-Shiite divide that spawned the 2005-2007 sectarian war. …
Rather than items that can be individually and sequentially addressed, Iraq’s principal conflicts—concerning oil, disputed territories, federalism and constitutional revisions— have become thoroughly interwoven. … How to move forward? If there is a way out, it lies in a comprehensive approach that takes into account the principal stakeholders’ core requirements. A sober assessment of these requirements suggests a possible package deal revolving around a fundamental “oil-for- soil” trade-off. … Such a deal would codify the significant gains the Kurds have made since they achieved limited autonomy in the wake of the 1991 Gulf War and especially after April 2003, while simultaneously respecting an Arab-Iraqi—as well as neighboring states’—red line regarding Kirkuk.
This package entails painful concessions from all sides, which they are unlikely to make without strong international involvement. The UN Assistance Mission for Iraq (UNAMI) has been providing technical support on a range of issues and, since late 2007, has devoted the bulk of its efforts to the question of disputed internal boundaries. It will need stronger backing from the United States and its allies, which have an abiding interest in Iraq’s stabilization yet have played a passive bystander role that has confused Iraqi stakeholders and encouraged them to press maximalist demands. The United States should make it a priority to steer Iraq’s political actors toward a grand bargain they are unlikely to reach on their own and to secure its outcome through political, financial and diplomatic support. Access the full report>>