Politics

U.S. Welcomes Budget Accord between Iraq, KRG— Despite Questions on Iran’s Role

The U.S. ambassador to Iraq expressed Washington’s support for the agreement on financial payments from Baghdad to Erbil that Iraq’s Council of Ministers approved on Sunday, despite Iran's evident role in securing that agreement.

Laurie Mylroie 2023/09/18 14:10

Alina L. Romanowski, United States Ambassador to Iraq (Photo: US embassy)

Kurdistan Analysis Alina L Romanowski PM Barzani

WASHINGTON DC, United States (Kurdistan 24) – The U.S. ambassador to Iraq, Alina L. Romanowski, has expressed Washington’s support for the agreement on financial payments from Baghdad to Erbil that Iraq’s Council of Ministers approved on Sunday.

We applaud efforts between @IraqiGovt & KRG to reach resolution on the budget & its implementation, such as today’s CoM decision to transfer payments over the coming months. We look forward to continued dialogue to reach a more lasting resolution in the interest of the Iraqis.
— Ambassador Alina L. Romanowski (@USAmbIraq) September 17, 2023

“We applaud efforts between @IraqiGovt & KRG to reach resolution on the budget & its implementation, such as today’s CoM decision to transfer payments over the coming months.” Romanowski tweeted, adding, “We look forward to continued dialogue to reach a more lasting resolution in the interest of the Iraqis.”

The Kurdistan Regional Government [KRG] has been under serious financial pressure, as its two main sources of income had been suspended–until Sunday’s decision in Baghdad.

One key source of KRG revenues was oil exported through Turkey to the Mediterranean port of Ceyhan. But those exports were stopped in March, following an adverse ruling by the International Chamber of Commerce’s International Court of Arbitration.

That flow of income has yet to be restored, and the KRG has lost some $4 billion in revenues.

The second key source of KRG revenue is payments from Baghdad. But for the past three months, the Iraqi government had not paid the KRG its agreed-upon share of the federal budget: 12.67 per cent, over $12 billion annually.

That issue was resolved, at least temporarily, on Sunday, with the decision of the Council of Ministers.

Background to Decision

The KRG is an important ally of the U.S. in a part of the world, where the U.S. has few friends. The KRG, including the Peshmerga, played key roles in the 2003 war that overthrew Saddam Hussein, as well as the conflict with ISIS that began in 2014.

Senior U.S. officials, like Gen. David Petraeus and Sen. Tammy Duckworth (Dem, Illinois) have praised the KRG in the highest of terms.

But the Biden administration has not been particularly helpful to the KRG on this matter.

In a letter addressed to President Joe Biden, dated Sept. 3, but delivered to the White House on Sept. 10, as Al-Monitor reported, KRG Prime Minister Masrour Barzani stated, “I write to you now at another critical juncture in our history, one that I fear we may have difficulty overcoming,” as he appealed for Washington to use its leverage with Baghdad to resolve the budget crisis.

“We are bleeding economically and hemorrhaging politically,” Barzani’s letter continued. “For the first time in my tenure as prime minister, I hold grave concerns” about the possible collapse of “the very model of a Federal Iraq that the United States sponsored in 2003 and purported to stand by since.”

The White House had not responded, as of Tuesday, when the Al-Monitor story appeared.

At Wednesday’s State Department briefing, Kurdistan 24 asked about the letter. The Spokesman, Matthew Miller, declined “to discuss diplomatic correspondence between the President and the KRG.”

“But I will reiterate, as we did in the February U.S.-Iraq Higher Coordinating Committee in Washington,” Miller continued, “that we continue to urge the Government of Iraq and KRG officials to resolve their budget disputes in a manner that benefits the Iraqi citizens, as the Iraqi constitution requires.

That was significantly less than what Barzani had asked for. However, there was another party that was far more responsive: namely, Iran.

On Thursday, Barzani led a large delegation to Baghdad to hold discussions on resolving the budget crisis. Those discussions were preliminary to the ministerial decision on Sunday that approved allocating Iraqi funds for the KRG.

In addition to meeting Iraq's Prime Minister, Mohammed al-Sudani, in Baghdad, Barzani also saw Iraqi President, Latif Rashid of the Patriotic Union of Kurdistan (PUK), as well as the Sunni Arab Speaker of the Iraqi parliament, Mohammed al-Halbousi.

But he also met with three major Shi’ite figures, closely linked to Iran.

They included Falih al-Fayyadh, head of the Popular Mobilization Forces (PMF.) Fayyadh assumed that position after the previous PMF head, Abu Mahdi al-Mohandis, died in a U.S. strike in early 2020 that targeted Qasim Soleimani, head of the Qods Force of Iran’s Islamic Revolutionary Guard Corps (IRGC.)

The second such figure with whom Barzani met was Hadi al-Amiri, head of the Fatah Alliance in Iraq’s parliament, as well as the leader of the Badr Organization. Amiri was Secretary of Transportation in the highly sectarian government of Nuri al-Maliki.

Barzani also met with Maliki, head of the State of Law Coalition in parliament. ISIS emerged during Maliki’s tenure as prime minister, bursting out of Syria and seizing one-third of Iraq. The Obama administration then reluctantly recognized that it had to return U.S. forces to Iraq, after they had been withdrawn three years before.

The Obama administration judged that Maliki’s pro-Shi’ite policies had contributed to ISIS’s emergence, and it made–as a condition of U.S. support against ISIS–that Maliki resign as prime minister, which he, in fact, did.

Moreover, Mike Pompeo, U.S. Secretary of State under Donald Trump, identified both Amiri and Fayyadh as leaders of the December 31, 2019, assault on the U.S. embassy in Baghdad.

“The attack today was orchestrated by terrorists, Abu Mahdi al-Muhandis and Qais Khazali, and abetted by Iranian proxies Hadi al-Amiri and Falih al-Fayyad. All are pictured outside our embassy,” Pompeo wrote later that day.

Thus, those are the three individuals, closely tied to Iran and strongly criticized by previous U.S. administrations,with whom the KRG Prime Minister was obliged to meet in order to secure the funding to avoid a catastrophic failure in the Kurdistan Region–as he warned.

Almost certainly, Tehran was instrumental in securing the agreement of those parties to provide those funds for the KRG. Before he left for Baghdad, Barzani met with Iran’s ambassador to Iraq, Mohammad Kazem al-Sadeq, who even made the trip himself from Baghdad to Erbil for the meeting

U.S. Passivity: Renewing the Nuclear Deal?

Speaking to Al-Monitor, former U.S. Ambassador to Iraq, James F. Jeffrey, warned that Iran was using an “all elements of power” strategy to take control of Iraq, following the same model it had used so successfully in Lebanon.

The Trump administration, Jeffrey explained, had “pushed back”against Tehran by “inventorying all the ways” the U.S. and the West more broadly, “were important to Iraq and then threatened to start sending them down, if the Iraqi government didn’t take specific steps we detailed to push back on specific Iranian or militia tentacles inside government structures.”

However, the Biden administration “doesn’t seem to be doing anything in this regard,” Jeffrey continued, most likely because it still seeks to renew the Obama-era nuclear accord with Iran.

Biden has expressed strong support for the KRG, even telling this reporter, “Masoud Barzani is a good friend of mine,” but many senior officials in his administration who deal with this issue served previously in the Obama administration.