Since the adoption of the Iraqi Constitution in 2005, the relationship between the Kurdistan Region and the Federal Government has fluctuated between a hoped partnership and frequent conflict. Although the constitutional texts granted the region a clear federal status, their practical application has revealed a deep gap between legal interpretation and political practice, and between commitment to the spirit of partnership and the pursuit of reproducing a strict centralism.
Part of the dispute is portrayed as differences in the interpretation of the constitution, particularly regarding the management of natural resources and the distribution of revenues. However, the depth of the crisis extends beyond the language of the texts to the structure and behaviour of power. Some political forces consider federalism a threat to the unity of the state and are working to reduce the powers of the region to the limits of strict centralization. In contrast, there is a growing conviction in Kurdistan that the repeated obstruction can only be addressed through broader arrangements, ranging from establishing a genuine federal system, and perhaps other options when equitable partnership proves impossible.
The most complex issue is the energy file, oil and gas. The region sees its constitutional right to invest and market according to its laws, while the federal government insists on monopolizing exports. The dispute has turned from a legal debate into a tool of political and economic pressure, through obstructing or delaying the disbursement of the region’s budget. Thus, the daily economy of the citizen has become a chip bargaining, which undermines trust and jeopardizes any talk of partnership.
This intersect with the issue of the disputed Kurdish territories—Kirkuk, Sinjar, Khanaqin, and the Nineveh—where attempts for demographic change are resurfacing, reviving past conflicts and deepening divisions. Without a fair and transparent resolution to this issue, any financial or oil agreement will remain fragile and subject to the evolving tensions on the ground.
Nor should we forget the regional factor that further complicates the situation. Türkiye views Kurdistan from two angles: a security perspective related to the Kurdish issue within its borders, and an economic perspective that benefits from the export pipeline and logistical infrastructure. Iran sees the strengthening of Baghdad at the expense of the region as a guarantee for the sustainability of its influence, and supports – politically and militarily – forces that weaken any balanced federalism. Therefore, the dispute is no longer purely internal; it is part of a regional equation in which energy intersects with security and the limits of influence.
In the medium term, the transition should be from a "federalism on paper" to a measurable federalism: performance indicators, time windows for implementation, and rapid arbitration mechanisms. If this is not possible, national transparency is required to explore arrangements of a higher degree of decentralization - even confederation - within a clear contractual agreement that prevents economic and security collapse and preserves the rights of the constituents.
In conclusion, the dispute between Kurdistan and Baghdad is not a technical conflict or merely a legal argument; it is a test of Iraq’s ability to manage its diversity with a modern system of governance. Either the Constitution becomes a binding contract that is respected in good and bad times by all, or it is reduced to a seasonal bargaining subject to the balance of power. Between these two options, the future of the Iraqi state is decided: a stable partnership that produces a prosperous economy and sustainable security, or a centralism that recycles endless crises.