The deal was brokered between two sides of one country, the Federal Government of Iraq and Kurdistan Regional Government. The United States was the middleman behind the scene because while US-led coalition fighters pound ISIS strongholds in Iraq, it can not prepare the Iraqi forces to fight ISIS without a power-sharing deal, which includes revenue sharing.
There are several conditional clauses, which both parties must accept, as per agreement. Consequently, Baghdad will send KRG’s share of 17% share of its budget, alongside $1 billion from the defence budget to assist peshmerga forces against ISIS fighters. In return, the KRG will send 250,000 bpd oil under Baghdad’s supervision. The KRG will also allow Baghdad to send 350,000 bpd oil from Kirkuk’s oil fields, using KRG’s pipelines, under Iraq’s national oil company, SOMO.
The Baghdad-Erbil agreement on December 2nd, 2014 echoed in Erbil and Washington positively. In Washington, the State Department announced its support to both sides to resolve their outstanding issues, and move the country forward.
Media outlets covered the public’s conflicting reaction in Kurdistan’s capital, which highlighted polarised perspectives on the impact of the agreement. Some criticised the agreement because they argued Kurdistan region did not make substantial gains from it. The criticism was heavily levied against the background of the agreement because KRG’s 17% share of Iraq’ national budget is constitutionally protected, and not subject to political agreement.
Furthermore, the KRG’s commitment to allow Baghdad to send Kirkuk’s oil through its pipeline without anything in return is criticised.
Some perceived the agreement on good terms because it will flow money to Kurdistan’s market, ending nearly one-year delay of salaries to civil servants, improving public enterprise funds, and boosting the market, lessening public grievances.
Prior to the announcement of an agreement, the Kurdish lobby for independence from Iraq was growing both regionally and internationally. There were several campaigns, urging the KRG to initiate independence from Iraq, which were positively received by Kurds in diaspora. The independence dream, which inspired many locals, seems to have halted, angering people for false hopes being raised.
Amidst the conflicting perception of this agreement exists one reality, which should be welcomed by Kurds. The KRG will receive $1 billion to Peshmerga from Iraq’s defence budget for the first time since the rebuilding of Iraq’s new Army in 2005. The agreement challenges Abadi, and is perceived as conditional terms by KRG, and if broken, independence will be sought.
More importantly, the US has acted as a third party to broker the deal, and is providing more military support to Peshmerga forces and the Iraqi army — if the agreement falls flat, US military support to fight ISIS is likely to cease.
Iran welcomed the Erbil-Baghdad deal, which is ironic considering their opposition to US interference in the region — both sides have showed eagerness to save Iraq’s unity.
The new agreement between Baghdad and Erbil will reinforce both sides financially and military. It will allow them to front ISIS more efficiently, and tactically. The threat of terrorism in the region poses a security risk to all parties, including neighbours as well.
The security dilemma between Baghdad and Erbil is one of the primary concerns. The US should support both sides to improve their military capabilities without posing a threat to each other. The Kurds have long perceived US military support to Baghdad as a threat to their own interests. Meanwhile Baghdad has perceived support towards Peshmerga forces as a threat because it could lead to internal conflicts, and separation.
The US is perceived as the Kurds’ best friend, and has the most leverage in Iraq. It can influence Kurdish leaders to close a deal at minimum cost. The US also has an international commitment to protect Iraq’s unity under SOFA agreement. In fact, the US is the only party that can play a mediator’s role among Iraqi people. This enables the Obama administration to get Iraq back on track.