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From ISIS to Declining Oil Prices: Qubad Talabani on the Kurdistan Regional Government’s Challenges

Long an island of stability in a Middle East marked by conflict, the Kurdish region of Iraq now faces a perfect storm. Its finances have been severely affected by the dramatic decline in the price of oil, its main source of revenue. The KRG also faces a constitutional crisis because President Masoud Barzani's term has ended without the Kurdish political parties finding a definitive way forward or agreement on succession. And the KRG's Peshmerga military force is engaged with the United States and its allies in an extended offensive to rout the self-declared Islamic State extremist group and liberate the nearby city of Mosul, Iraq’s second-largest. Amidst all of this, President Barzani also has indicated that the KRG will hold a referendum in 2016 on whether the region should seek independence from Iraq.

Date & Time

Apr. 14, 2016
10:00am – 11:00am ET


6th Floor, Woodrow Wilson Center
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Qubad Talabani, Deputy Prime Minister of the Kurdistan Regional Government (KRG), addressed the challenges, threats, and opportunities that Iraqi Kurdistan faces today. 

On April 14, 2016, the Middle East Program, U.S. Institute of Peace, and the Kurdistan Regional Government co-sponsored the event “From ISIS to Declining Oil Prices: Qubad Talabani on the Kurdistan Regional Government’s Challenges.” Nancy Lindborg, President of the U.S. Institute of Peace, provided opening remarks, and Henri J. Barkey, Director of the Middle East Program at the Woodrow Wilson Center, moderated the event.  

Lindborg opened by noting that it was exactly 28 years ago that the Anfal Campaign occurred, which was an Iraqi governmental military campaign against the Kurdish people in the final throes of the Iran-Iraq War. Lindborg then commented that this is a time when the whole Middle East is confronting challenges, including the impact of falling oil prices. She also mentioned the growing number of displaced people, over a million of whom Kurdistan is currently hosting, and urged us all to focus on reconciliation in the region.

Talabani began his comments by saying that he was in part speaking to remind people of the atrocities that have been committed against the Kurdish people, as Lindborg also addressed. He stressed that the Kurds are still surrounded by war and face significant challenges. Among these are the threat that ISIS presents and political instability. But Talabani went on to say that the most important existential threat to Kurdistan is neither ISIS nor politics, but rather the state of its economy. He discussed multiple shocks that Kurdistan’s economy has suffered: in 2014 with the influx of ISIS, and now again with the rapid global drop in oil prices. Though Kurdistan has started a comprehensive reform plan, Talabani said that it is contributing minimally to lessening the economic turmoil.

Barkey asked Talabani several questions, one of which was what he thinks will happen next if KRG President Massoud Barzani’s call for referendum on independence passes a vote from the Iraqi Kurds later this year. Talabani asserted that the Kurds have proven, despite shortcomings, they are able to form a plural and tolerant government, and should indeed be independent—whenever that may be. He then acknowledged that independence is a process—one that first has to start with a conversation among the Kurds. He later noted that regardless of its independence, Kurdistan will ensure the protection of rights to all ethnic identities and communities.

Barkey and Talabani then turned their conversation toward ISIS. Barkey noted that part of ISIS’s success is due to its work in Mosul to form coalitions with tribes. Talabani agreed that ISIS is not just a military threat, because they have also filled a political vacuum. The question to answer, he said, is how we ensure there is not another mutation of radicalism (ISIS being one such mutation). Talabani’s solution is to fix politics within Iraq—something that would ensure a group does not come in to represent a community, as ISIS did with the Iraqi Sunnis.

David Ottaway, a Middle East Fellow with the Wilson Center, asked Talabani about Kurdistan’s oil production status. Talabani recalled how dramatically the oil sector has recently grown in Kurdistan. But he noted a recent complication with an oil company in Kirkuk having shut off fields, causing a major dent in revenue streams. Barkey then asked Talabani about Kurdistan’s natural gas, to which he responded that there is a large prospect for future production and export of Kurdistan’s excess natural gas.

With regard to Kurdistan’s restructuring, Talabani commented on the need to put greater emphasis on its private sector than the public sector. The current crisis has highlighted Kurdistan’s shortcomings, he said, and its overdependence on the public sector. Talabani promised that Kurdistan will not let realizations from the crisis go to waste. He added that the KRG was looking to the power generation sector for privatization and export potential. Similarly, he hoped that both agriculture and the IT sector would prove competitive in the future.

By Elena Scott-Kakures, Middle East Program

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Middle East Program

The Wilson Center’s Middle East Program serves as a crucial resource for the policymaking community and beyond, providing analyses and research that helps inform US foreign policymaking, stimulates public debate, and expands knowledge about issues in the wider Middle East and North Africa (MENA) region.  Read more

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