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At the start of 2014, Iraq’s Kurdistan Region was a centre of geopolitical attention. It had experienced a period of economic growth dating back to the mid-2000s, with many Kurds who had fled abroad in previous decades returning home.

At the beginning of the year, it was marketed positively as the “other Iraq”. By the end, the Kurdistan Region was the platform for the International Coalition to fight the Islamic State (IS). A decade later, it is now awkwardly caught between what it was and an uncertain future.

With the threat of IS much diminished, the international community has turned its focus elsewhere as crises in Ukraine and Gaza have emerged. As a result, domestic challenges in the Kurdistan Region are all the more potent and can no longer be papered over.

Former Kurdistan Parliament Speaker Yousef Mohammed Sadiq acknowledged that the war against IS was important but argued that there should be a greater focus on domestic factors when assessing the last decade.

“Other incidents that happened along with the emergence of the IS war have affected Kurdistan more,” Mohammed told °®Âţµş. “Unfortunately…Kurds could not benefit from all the sacrifices they made in the war against IS.”

Despite the massive influx of attention and funding from the international community for the fight against IS, the Kurdistan Regional Government (KRG) struggled to pay its civil servants and launched a . Its economy is still struggling amid disputes with Baghdad and problems exporting oil.

Politically, it was pulled in two directions: a drive to reform the duopolistic system that had emerged in the 1990s or realise the birth of an independent state. Both paths failed to achieve their goals. Socially, a new generation of young people came of age shaped by these economic and political headwinds.

“Due to the local issues within the Kurdistan Region, I expect that it either stays like this or will get weaker,” Mohammed said.

A dark economic period

The Kurdistan Region’s economic boom came to a crashing halt in 2014. Although this coincided with and was exacerbated by the emergence of IS, it was primarily caused by disputes between Iraq’s federal government and the KRG over the budget and independently.

When the exports started, Baghdad to the Kurdistan Region. This had an outsized impact on the economy because the public sector is by far the and the KRG could no longer make payroll. In response, Erbil began withholding a portion of the salaries of all civil servants.

Although framed as a temporary measure, this austerity policy would last five years until 2019, and then resume for a time during the Covid-19 pandemic. The KRG promised to repay what it kept back from its people but has never made good on that pledge. The independent oil exports that it fought so hard to achieve never brought in enough money to offset what it had lost from the federal budget.

“People’s conditions got worse and they ended up spending all their savings from before 2014,” said Mohammed, noting that public servants still do not have much certainty about when their next paycheck is coming. Instead of being routine, the timing of salary disbursements is still in the Kurdistan Region.

“This has not only affected government employees, but all residents of Kurdistan, because what is coming in and out in the market relies on public sector salaries,” Mohammed added.

Today, relations between Baghdad and Erbil remain troubled. The prospects for a national oil and gas law have dimmed. Despite some , oil exports are still suspended after almost two years. It is doubtful that there will be a major budgetary breakthrough ahead of the Iraqi parliamentary elections next year as all factions look to their bases.

Another lost decade lies ahead unless Baghdad and Erbil can find an agreement to provide timely, regular, and large infusions of cash from the federal budget.

Political failures

Since 2014, the Kurdistan Region was pulled in two directions politically: one focused on addressing a popular desire for reform and the other driven by nationalist ambitions. Neither would succeed in meeting their goals. As a result, Iraqi Kurdish politics is perhaps returning to its fundamentals.

By 2014, the Gorran Movement represented a serious challenge to the ruling duopoly of the Kurdistan Democratic Party (KDP) and the Patriotic Union Kurdistan (PUK). It won the in the Kurdistan Parliament in the 2013 regional elections on a of fighting corruption and instituting parliamentary democracy.

A constitutional crisis was boiling. Then-Kurdistan Region President Masoud Barzani had overstayed his mandate in office, in part because of an emergency agreement to aid the KRG’s response to IS. With the Kurdistan Parliament set to debate the issue, the KDP prevented Yousef Mohammed Sadiq from entering Erbil to preside as speaker. The KDP-Gorran power-sharing cabinet collapsed.

Meanwhile, the war against IS and the support from the international community convinced Barzani that there was a unique opportunity to seize the long-held dream of independence. Without a functioning parliament, the KDP-led KRG pressed forward with the 2017 independence referendum.

In hindsight, the referendum is viewed as a major strategic mistake. It resulted in significant territorial losses, including Kirkuk. Since then, Baghdad has pressed its advantage and repeatedly restricted the Kurdistan Region’s autonomy.

As the reform project spearheaded by Gorran collapsed, the KDP and the PUK regained their footing as the two most powerful parties. However, they have become increasingly divided and unable to present a unified front.

Mohammed, who played a central role in these events, reflected that the politics of the past decade “caused a deep impact on the region and the loss of trust in the process of democracy in the KRG”.

“The Kurdistan Region is getting weaker and more divided due to the issues between the KDP and the PUK. As a consequence, the KRG as an entity has gotten weaker within the framework of the Iraqi state,” he added.

With both the reform and nationalist projects suffering heavy setbacks, the ruling KDP-PUK duopoly has again become the driving force in Iraqi Kurdish politics.

This is not encouraging. There will likely be a following the Kurdistan Parliament election on 20 October characterised by discord between the two parties. The result will be more instability and less certainty.

A new generation comes of age

If the Kurdistan Region’s economy is still grappling with the upheaval that began ten years ago and its politics are returning to a previous era, its social dynamics have changed massively in new ways over the past decade.

“A new generation has developed and emerged in our society,” Mohammed said. “This generation has not experienced the [1991] uprising and civil war era. That is why they have different goals and dreams.”

There are ongoing debates about freedom of speech, the and , and religious conservatism. All of them are heavily influenced by the emergence of social media.

The new generation sees “the whole world through their phones and most of them speak a different language, especially English. They also have a lot of aspirations and dreams but not enough opportunities,” Mohammed added, suggesting that this is partly the source of wide discontent among young people.

One consequence of this social upheaval, combined with the economic and political dysfunctions, is that many Iraqi Kurds are trying to migrate to Europe. This is a darker bookend to the late-2000s when the diaspora was coming home.

As the decade that began with the rise of IS ends, the Kurdistan Region faces a disturbing array of internal challenges. Even in the most ordinary circumstances, they would be difficult for a government and society to manage. But the Kurdistan Region is located in a part of the war where cataclysm is all too common.

A new era dawns, but the future is highly uncertain.

Winthrop Rodgers is a journalist and analyst based in Sulaymaniyah in Iraq’s Kurdistan Region. He focuses on politics, human rights, and political economy.

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