CONTENT PREVIEW
Country Risk

Despite risk of fragmentation, governance of Iraqi Kurdistan most likely to remain dominated by the KDP

03 November 2017

Key Points

  • The extent and penetration of the KDP and PUK’s respective patronage networks, and their control, through their affiliated Peshmerga militias, over the security forces mean that a successful challenge to their dominance by Kurdish opposition parties in the June 2018 elections remains unlikely.
  • The fragmentation of the KRG into two autonomous provincial administrations, run by the Masoud Barzani-led KDP and the PUK, remains unlikely, unless the Baghdad government makes good its threat of making direct budget transfers to the Sulaymaniyah and Halabja provincial councils, circumventing the KRG’s ministry of finance and economy.
  • Oil contracts are unlikely to face alteration or cancellation risks, unless the Baghdad government considers they break the legal framework set out in the constitution. Increased fiscal strains in the KRG means that it is likely to default on mounting debt.

Event

Kurdistan Regional Government (KRG) President Masoud Barzani announced on 29 October 2017 that he would relinquish his role as president following the elapse, on 1 November, of the second two-year extension to his term.Prime Minister of Kurdish Regional Government (KRG) Nechirvan Barzani at a press conference after meeting President of Iraq Fuad Masum and then-KRG President Masoud Barzani in Sulaymaniyah, Iraq, on 15 October 2017. (Anadolu Agency/Getty Images)Prime Minister of Kurdish Regional Government (KRG) Nechirvan Barzani at a press conference after meeting President of Iraq Fuad Masum and then-KRG President Masoud Barzani in Sulaymaniyah, Iraq, on 15 October 2017. (Anadolu Agency/Getty Images)

On 29 October, the KRG parliament passed a law temporarily redistributing the powers of the executive presidency among the KRG’s prime minister, cabinet, parliamentary leadership, and judiciary. This established the incumbent Prime Minister Nechirvan Barzani, Masoud’s nephew, as chief executive authority and external representative of the KRG. The law is set to expire after the Kurdish region’s next presidential election, which is currently scheduled for 1 June 2018.

Masoud Barzani’s decision not to opt for an eight-month extension to his presidential term, until the June election, is probably a pre-emptive move, intended to avoid the political damage that would result from the imposition of a reconciliation agreement on the KRG on terms acceptable to the Baghdad government, which is seeking to maximise its current advantage. Such an agreement is now increasingly likely, with the bargaining leverage tilted sharply in Baghdad's favour.

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