Oil Wealth Divides Iraqis

Oil Wealth Divides Iraqis
Constitution is hung up on whether Shiites and Kurds should control their regions' riches.
By Alissa J. Rubin
Times Staff Writer

August 1, 2005

BAGHDAD — It is crunch time for the drafters of Iraq's constitution, and one question above all has stymied them: whether Kurds and Shiites should control their own regions and the oil money they generate.

On Sunday, transitional National Assembly officials argued about whether to seek a delay of the Aug. 15 deadline for completing the document to give them more time to hash out such sticky issues.

The key, when it comes to Iraqi politics, is the map. And what it shows is that in the Shiite Muslim south and areas close to the Kurdish north lie vast oil deposits worth billions of dollars per year. In the center, where most Sunni Arabs live, lie sand and scrub.

Although other issues remain under debate, including the rights of women and the role of Islam, there is only one that could provoke violent upheaval: whether political power and oil revenue will be controlled largely by a centralized national government or by regional authorities.

"Women's rights are very important, of course, but however they come out, it will not lead to civil war. Other things are far more likely to do that … and federalism is by far the hardest issue," said Joost Hiltermann, director of the International Crisis Group's office in Amman, Jordan, which tracks Iraq.

Struggles for power between central and regional governments have been at the core of some modern nations' bloodiest wars. Countries such as the former Yugoslavia and the Soviet Union fought bitterly over the issue. The United States broke out in civil war over states' rights in 1861. Local autonomy often comes at a terrible price.

The Kurds have a head start in carving up the map, having enjoyed semi-autonomy from Saddam Hussein's Sunni-dominated regime under the protection of a U.S.-enforced "no fly" zone. Kurdish leaders want the constitution to ratify and strengthen that autonomy by creating a federal system with strong regional governments entitled to a proportion of regionally derived oil income.

Most Shiite leaders, whose people suffered brutal repression under Hussein, say it is only fair for them to get the same autonomy as the Kurds so they can create a comparable region in the south.

Sunnis strongly oppose such an arrangement. They want more power to remain in the capital and money to be distributed by the central government. That is an arrangement over which they, as a minority, hope to exercise more control.

Sunnis fear that if southern Iraq establishes a Kurdish-style autonomy, eventually the country would violently break apart, and they would be left with little in the way of natural resources.

U.S. officials are also uneasy about an Iraq without a strong center. They worry that because of Sunni opposition to such an arrangement, it would worsen rather than resolve civil strife, gradually drawing in neighboring countries and fomenting trouble in the region. Furthermore, the U.S. mantra has long been a democratic, unified Iraq — not three de facto countries.

"For the constitution to play the role that it should play to facilitate Iraq's success, it has to be a national compact among all Iraqi communities," said Zalmay Khalilzad, the new U.S. envoy. "It's very important that the constitution is produced through the participation of all Iraqis and that all Iraqis see themselves in this picture that is emerging…. This is important for ending and defeating the insurgency."

Yet serious fractures are evident.

Two versions of the constitution were published in Arabic newspapers last week that highlighted two groups' distinct interests.

One draft, acceptable to many of the country's Shiite leaders and to some Kurds, featured a detailed section that would allow provinces to join together to form semi-autonomous regions. Each would be run by an assembly, a council and a president. The budget would be financed by a combination of grants from the central government and an unspecified share of the region's resources, enshrining in the constitution the right of local governments to their natural resources.

Shiite leaders were especially attracted to an explicit acknowledgment in this version that Islam would be the primary source of Iraq's laws.

Another version, published in a Kurdish newspaper, was the Kurds' dream constitution, all but making their region an independent country. It would give the regional governments sweeping powers. Under this version, just 35% of natural-resource income would be sent to Baghdad.

That version also would require regional governments to approve laws passed by the National Assembly for them to take effect. Kurds say they need such powers to maintain their region's secular, Western character — especially its progressive treatment of women.

"The Kurds are not fundamentalist, they are anti-Islamic form of government," said Nasreen Berwari, a Kurd who is minister for municipalities and public works. "The Kurds need to be very careful, very persistent. They need … to be free to take or not to take whatever law is applied" in the rest of the country.

A third draft, written by some Sunni groups but not yet published, would permit gradual decentralization of power. It is unlikely to win approval from Kurds or Shiites in part because the regions would have no right to keep the income from their natural resources. But it would allow significant regional autonomy to be phased in over four years.

One increasingly likely scenario is that the drafters, in their reluctance to confront the difficult issue and force a compromise, will put in vague language that defers the hard choices.

Iyad Allawi, the former prime minister, argued that regional autonomy is so divisive that decisions should be put off until after the next election, when there will probably be more Sunnis and other minorities in the National Assembly. Just over half of eligible voters went to the polls in January, and few Sunnis were among them.

"It's very clear right now, national unity is jeopardized. National unity is not even possible right now … because a lot of Iraqi people are not part of the general assembly," Allawi said.

If the deadline were pushed back, animosities and suspicions might fester, because no one would be reconciled to a compromise. "These issues are not going to get any easier six months from now," said a Western diplomat, speaking on condition of anonymity. "They need to put down on paper what they want and start to make trades."

One problem inherent in the creation of semi-autonomous regions is that Iraq's three major groups are not neatly gathered in distinct parts of the country. Several provinces have mixed populations, and even those with a clear majority of either Shiites or Kurds also have significant numbers of minorities.

"There is the possibility that minorities would be abused in these areas, and a great possibility of external interference in those areas, and the possibility that the political parties that will be in control of politics there will have some links to outside groups," said Iyad Samarrai, a Sunni member of the constitutional panel, referring indirectly to the Sunnis' fear that Iran will influence Shiite political parties.

The two groups seeking to create autonomous regions appear undeterred by the problems because the potential gains are so attractive.

In Basra province, where Iraq's second-largest city perches on the Tigris Delta, oil revenue exceeds $13 billion per year. Not surprisingly, provincial officials would like to get their hands on some of that money. They imagine repairing their water systems, bringing electricity to impoverished villages and building hospitals, among other things.

But the south has other priorities, including uniting with neighboring provinces, which are bound by Shiite faith and culture.

"As for the southern governorates, this might well become one big region. There would be no limit on the number of provinces that could join together. It's fairly homogenous. The region is predominantly Shia, but it would be up to the people to decide by referendum," said Hussein Shahristani, one of two deputy speakers in parliament and an influential Shiite leader.

Unlike the Shiites, the Kurds need to expand their region to ensure that the largest oil fields are safely within their territory. They sit next to, but not on top of, largely untapped reserves in the Kirkuk region. So they keep redrawing the maps to put Kirkuk within their borders.

Other Iraqis resent these efforts. But the Kurds, who have displayed considerable toughness and solidarity during the negotiations, say that historically, Kirkuk was theirs. The area is so ethnically mixed today, they say, only because Hussein expelled thousands of Kurds, redrew the provincial borders and paid Arabs to move in.

Reports are rife of kidnappings, random imprisonments and even killings of Sunnis and Turkmens, the two minority groups in the area. But it is the large number of Kurds who have been pouring back into the Kirkuk region, living in tent villages, stadiums and camps, that have had the biggest effect on local demographics.

The Kurds call it "normalization" of the population and promise to hold a referendum when it is over to see whether the residents want to join Kurdistan or remain part of Arab Iraq. Few doubt that if such a referendum were held, the residents, by then largely ethnic Kurds, would vote to join Kurdistan.

For Iraq's Sunnis, it is difficult to see themselves in this picture. Their "region" has little to recommend it, yet they fear that those of their people outside it will be marooned in largely Shiite or Kurdish Iraq.

"If we believed in their goodwill, then we would not mind if we had federalism, or whatever," said Sheik Illiam Khalaf, secretary-general of the National Dialogue Council, one of the Sunni groups with representatives on the constitutional commission. "But we are totally convinced that there are efforts underway to divide Iraq … and there are people in the Iraqi government willing to heed those calls."