The Powder Keg Up North

IRBIL, IRAQ -- Explosions overhead seemed ready to crumble the earthen walls of the ancient citadel at the city center. For some watching below, the atmosphere could have been reminiscent of the day, two decades before, that Saddam Hussein had rained down mortar shells on Kurds seeking refuge inside at the height of his ethnic cleansing campaign. Others visiting from the south of the country were likely reminded of the rampant violence that dominates life there.

But the thousands of Kurds and Arab Iraqis who lined the streets of Irbil in March were all smiles, cheering the massive fireworks show that heralded Norooz, the Kurdish new year. Throughout the night, and several days after, taxi drivers pounded on their horns and musicians gave impromptu concerts that got people dancing. Security was visible, without being offensive.

It was the kind of event that the region's leaders have been striving to showcase. Indeed, the Kurdish Regional Government of northern Iraq is working round the clock to promote "the other Iraq," a bastion of relative calm ripe for foreign investors and even tourists. A promotional hook on the KRG website reads: "Welcome to Iraqi Kurdistan. Where democracy has been practiced for over a decade. It's not a dream. It's the other Iraq."

This PR offensive is boosted by the fact that no coalition troops have been killed nor foreigners kidnapped in the autonomous region since the 2003 U.S.-led invasion that ousted Saddam. (The toppling of Hussein is a service for which Kurds are still quick to show disarming gratitude toward an American guest more used to diatribes on the ills of American foreign policy in the Mideast). Muscle on the ground is provided by the Kurds' own 70,000-strong peshmerga militia and police force and ordinary residents who keep a vigilant watch. "We guarantee everyone's safety," police chief Abdullah Khaylani told me. "This is the right place to come, right now."

A walk around Irbil, the Kurdish capital, bears him out. Blast walls surrounding government ministries are splashed with pastoral scenes and motivational quotes, instead of bullet pocks. Shopping malls, housing subdivisions, and a Western-style university have gone up seemingly overnight. Faith in the future has attracted droves of investors from Turkey who, unlike their leaders, put profit ahead of politics; hundreds of trucks rumble across the border every day with loads of steel, bricks, and cement to feed a construction boom.

Kurds make no secret that they see these developments as the groundwork for the independent Kurdistan they have always longed for. Officials, for their part, are tactful in citing their commitment to a greater Iraq in interviews, though three-star Iraqi flags are scarcely found flying above state ministries.

The Kurdish region may, however, be hostage to its own ambitions, and set on a collision course with troubles it has so far managed to avoid. The major issue is Kirkuk. Kurds want to absorb the oil-rich, ethnically combustible city, located less than a two-hour drive south of Irbil, by the end of the year in a local referendum. After a forced "Arabization" campaign under Saddam that imported tens of thousands of Shiite Arabs to displace the Kurdish population, an estimated 350,000 Kurds have moved back since April 2003. They are said to now hold a majority that would carry the vote.

This prospect has united Arab and Turkoman Iraqis against the Kurds and sparked a row in Baghdad, where a plan endorsed in late March by the central government to "voluntarily" relocate these groups prompted some officials to resign in protest. Two days later, a suicide truck bomber slammed into a police station in a Kurdish neighborhood of Kirkuk, killing 15 and wounding more than 200 people. A March 16 attack left three more dead.

Additionally, other Iraqi groups of varied stripes south of Kurdistan appear willing to overlook ideological differences to ally against a possible break up of the city. Moqtada al-Sadr's Mahdi army, to name one, has reportedly orchestrated attacks on Kurdish institutions and has established a growing presence in Kirkuk. Hundreds of fighters have moved to the city over the past year in anticipation of a showdown, according to U.S. officials, with 7,000 to 10,000 Shiite loyalists there vowing to battle any Kurdish attempt to take control.

The Kurdish region itself has been no stranger to attacks, including a May 2005 suicide bombing in Irbil that left more than 60 dead. But officials insist it has largely been spared thanks to the overwhelming cooperation of Kurds determined to maintain a model of stability. Thanks no doubt also go to heavy-handed security measures that inhibit criminal elements from penetrating Kurdistan's borders. All non-Kurds wishing to enter KRG territory must have a resident vouch for them; en route, they pass through a series of militia checkpoints; and on arrival, must go directly to the Directorate of Residence to register. Personal files are kept and updated as émigrés return to report their employment and living status. Such stringent measures have left a number of Arab Iraqi refugees from the south feeling like second-class citizens in what is still their own country. Many Kurds worry a surge in crime will follow as thousands more continue to arrive.

Holding back the powerful Turkish military is another matter. Turkish officials have long threatened a military intervention if the Kurds moved to declare their independence. They fear a Kurdish-controlled Kirkuk, even prior to such a declaration, would become the economic anchor of a Kurdish state that could in turn incite separatist fervor among the roughly 15 million Kurds living on Turkey's side of the border.

In response to a recent threat by Iraqi Kurdish President Massoud Barzani that he would "interfere" in northern Iraq unless Turkey minded its own business on the Kirkuk issue, Turkish general Yasar Buyukanit held an unprecedented press conference April 12 saying that he was prepared to launch a unilateral military incursion into northern Iraq to rout Kurdistan Workers' Party (PKK) guerillas known to stage cross-border attacks. These words cannot be taken lightly, considering that Turkey is already in the throes of an aggressive spring campaign against the PKK in the mountains near the country's southeastern border. Moreover, in the political arena, the hawkish military leadership has again stepped out of the shadows to chasten moderate Islamist lawmakers and stake a hard line against the Kurds.

As the threats mount on both sides of the Kurdish region, the United States has, for now, opted to remain silent. This may be explained by a preoccupation with the "surge" of troops to secure Baghdad and al-Anbar province. Alternatively, some speculate that the Department of Defense is lending clandestine support to guerillas of the Party for a Free Life in Kurdistan (PJAK), a northern Iraq-based proxy force against Iran.

Whatever the reason, so long as this neglect continues, the only successful facet of the Iraq nation-building project is poised to go up in smoke. "Preoccupied with their attempt to save Iraq by implementing a new security plan in Baghdad, the Bush administration has left the looming Kirkuk crisis to the side," said a recent International Crisis Group (ICG) report. "If the referendum is held later this year over the objections of other communities, the civil war is very likely to spread to Kirkuk and the Kurdish region, until now Iraq's only area of quiet and progress." The final Iraq Study Group report called Kirkuk "a powder keg."

Fearing the rupture of a new front in the Iraq war, the ICG argues that Washington and the United Nations should intervene and press for a postponement of the referendum. This would require offering the Kurds a face-saving measure to avoid a political crisis that would stem from a Kurdish withdrawal from the cabinet of Iraqi Prime Minister Nuri al-Maliki. But the recognition that unrest in Iraq proper is spiraling further out of control, underscored by the prospect of a U.S. withdrawal sooner rather than later, has instilled a keen sense of urgency among Kurdish authorities. There is real reason to believe they might be willing to accept the right face-saving measure.

President Barzani, for his part, insists that the referendum will be held by December regardless of outside pressures to postpone. He told European lawmakers this month that "any intervention from the outside would add to the complexities and create more problems for the future," while reiterating his support for "a democratic, federal, and multi-party system in Iraq." Indeed, Kurdish leaders were instrumental in creating an Iraqi constitution that has nominally held the country together in a federal system. The question that lingers is how long they will tolerate dysfunction elsewhere before making a break. "Our patience is not unlimited," Barzani has said.

The absorption of full control over Kirkuk, sitting atop one of the world's biggest oil fields with 8 percent of Iraq's 115 billion barrels of proven reserves, would complete a take-the-money-and-run scenario. The Kurds have already signed production sharing agreements with foreign companies to develop fields around Kirkuk, and say that existing contracts should be upheld. Sunni officials, concerned they may be frozen out, are pushing for a new oil law that guarantees an equal share of revenues, but talks have stalled. Although many Western oil officials argue that insecurity and a lack of legal clarity suggest it will take years to evolve a healthy business climate in Iraq, the Kurds are convinced they can hold their end together.

KRG Investment Chairman Herish Muhamad, for one, is a professional believer in the "other Iraq" concept. He says the government expects rapid economic growth thanks to a safe, business-friendly climate that gives "maximum" rights to investors. Perks include no state interference or bureaucratic red tape; the freedom to repatriate capital abroad or shut down anytime, or import manpower from anywhere in the world; a 10-year tax exemption and no customs duties for five years on imported materials. "Interested companies ask, 'where is your infrastructure so we can come,'" he says. "My reply to them is: Come and make this absence of infrastructure an opportunity for investment."

Modern homes in gated housing communities priced between $100,000 and $500,000 are selling out before they are finished, according to the chairman, "Like in Dubai." Demand has also spawned two international airports in the region: one in Sulaymaniyah, the second-largest city, and another in Irbil, from which Austrian Airlines opened a direct line to Europe last year. So far, there's been no need for pilots to swerve on the approach as they do in Baghdad, where surface-to-air missiles are a constant menace.

The airports have a special significance for Kurds after years of suffering in obscurity. Conservative estimates hold that some 2,000 Kurdish villages were razed and more than 50,000 people killed in Saddam's Iraq. During the 1980s and '90s, masses fled overland to Iran and Europe; now they are free to come and go as they please, driven by the prospect an independent Kurdistan capable of defending its own sovereignty and upholding strong links to the outside world.

Entrepreneur Hazem Kurda returned after more than 30 years in exile in Sweden to dig in. "This is Kurdistan, no matter what anyone says," he told me, busy receiving guests that had come to his mountain resort near the Iranian border to relax during the Norooz festivities. "We Kurds are very proud of our culture, our land, and the stability we've created here, and we deserve to finally have our own independent state."

From where we stood it was hard to argue; the atmosphere was serene as the Swiss Alps. But a clutch of armed guards in fatigues checking vehicles at the gate of the compound betrayed what visitors wanted to forget: Iraq is at war.