The KRG Risks Turkey Ties

If you ask representatives from the Kurdistan Region of northern Iraq, they will stress that Monday’s referendum paves the way for the KRG to be a stable and democratic regional partner to its external allies. However, almost all external actors – barring Israel – actively campaigned to dissuade the KRG from holding the referendum. But it did, and now we must look at what comes next for the KRG and its regional relationships. To be economically viable as an independent state, and indeed even to remain viable as a semi-autonomous region of greater Iraq, the KRG is insurmountably beholden to the goodwill of its neighbors.

The KRG’s most important regional partner is Turkey. Turkish exports account for nearly 80 percent of all goods sold in the Kurdistan Region; the vast majority of the region’s oil transits through Turkey on its way to international markets, and 40 percent of all foreign firms operating in the region are of Turkish origin. Currently, trade volume between the region and Turkey stands at approximately $2.5 billion. Both the KRG and Turkey have benefited from this deep and multilayered relationship, which stretches across issues of security, economy, and development. The strength of its partnership with the KRG has allowed Ankara to expand its regional footprint and influence in the region. It has also helped Turkey with a much needed diversification of its energy import sources. While on the surface it might seem that an independent Kurdistan Region could strengthen Turkey’s hand on these issues, Turkey is also acutely aware of the risks Kurdish independence could bring for the region.

Turkey is an ardent supporter of Iraqi territorial integrity. This policy is born both of the desire to see the Middle East stabilize following decades of violence and strife, and also of Turkish fears that a burgeoning Kurdish state born out of Iraq could serve as an impetus and model for similar future projects in largely Kurdish regions in northern Syria. Some have gone so far as to argue that Monday’s referendum means that “in practice, ‘Iraq’ no longer exists.” However, the referendum is nonbinding and it remains to be seen what, if any, action toward independence the KRG President Masoud Barzani will pursue. The central Iraqi government in Baghdad has refused to meet with Kurdish leaders to discuss the referendum outcome; Turkey’s leaders have likewise signaled that concrete steps towards independence by the KRG would have negative consequences on the Erbil-Ankara relationship.

Turkey has threatened to sanction the KRG for pursuing the vote and has also undertaken joint maneuvers with the Iraqi military along the Turkish-Iraqi border in the days following the vote. Perhaps most important to the KRG is Turkey’s threat to block the region’s oil exports. The prospect of economic isolation from Turkey is doubly troubling as Iran, the region’s only other energy transit partner (and much less developed than Turkish routes) also opposes Kurdish independence.

But will any of these prospects come to pass? It is likely that Turkey will leave all options on the table, rather than rushing to act on its current strong rhetoric against the KRG. Ankara’s reaction to the referendum should be interpreted as part of an ongoing effort to dissuade the KRG from moving forward with an actual break from the rest of Iraq. This isn’t to say that circumstances do not exist where Ankara would take actions against the Kurdistan region. The most likely of these is if Turkey feels its security is threatened. One example of this could be a continuous push by KRG continues to push for the inclusion of the oil-rich province of Kirkuk in its territory in any negotiations with Iraq. Clashes have already broken out in the province between Kurds and Turkmens over the referendum. Turkey has billed itself as a protector of Turkmens in the region, and has argued that the city belongs under the administration of the central government in Baghdad rather than under Kurdish control.

Such threats could push Turkey toward doing something it, ultimately, doesn’t want to do – such as intervening militarily in the region to protect its security or cutting off oil flows out of the region, both of which would sacrifice its own economic and business interests in the country and lead to a further devolution of the Turkish-KRG relationship. What happens next for the Turkish-KRG relationship will therefore very much depend on Erbil’s next moves. There is certainly reason for Turkey to believe that its influence and economic relations with the KRG render Ankara capable of swaying its decision making. It is also clear that Turkey is not backing down, as of yet, from its insistence that it will not tolerate an actual declaration of independence from its northern Iraqi neighbor.