Since 2019, Nechirvan Barzani, president of the Kurdistan region of Iraq, has visited the United Arab Emirates four times, and Kurdistan Regional Government Prime Minister Masrour Barzani has made five trips, holding meetings with UAE President Mohammed bin Zayed al-Nahyan. Four of Masrour’s visits have been in the past 12 months, most recently on August 18. The visits, totaling more than all their official visits, combined, to Baghdad, demonstrate a deliberate effort by the KRG to bolster economic relations and explore avenues for trade and investment with the UAE and suggest a mutual interest in strengthening bilateral ties and cooperating on tackling regional challenges.

Kurdish-Emirati Relations

Historically, Kurdish-Emirati relations have been limited, emerging only recently into prominence. In the period after the United Nations Security Council imposed economic sanctions on Iraq following the 1990 invasion of Kuwait, the UAE provided humanitarian aid through Islamic organizations based in the Kurdish region of Iraq. Beyond this, UAE interactions with Iraq’s Kurds were limited. Only after the 2003 U.S.-led invasion of Iraq did ties begin to expand.

Recognizing the strategic significance of the stable Kurdish region within Iraq, particularly following the ascent of Shia political forces in Baghdad, Abu Dhabi eventually identified Erbil as a strategic location for its political and economic projection of power across the country. In 2012, the UAE became the first among the Gulf Cooperation Council countries to establish diplomatic representation in Erbil just nine years after the invasion. This positioned the UAE as a pivotal investor and humanitarian contributor in the northern part of Iraq. While Erbil currently lacks a diplomatic presence in the GCC capitals, there have been recent discussions regarding establishing a Kurdish paradiplomatic office in the UAE.

Meanwhile, the KRG leadership has looked to the UAE as a successful development model to emulate. The Barzanis, in particular, have sought to turn Erbil into the second Dubai of the Middle East, and to that end have implemented extravagant development projects encompassing airports, extensive highways, upscale shopping malls, fine dining establishments, and luxurious villas and apartments.

However, the economic gains from such projects have primarily benefited the political elite and their close associates, intensifying economic disparities across the Kurdistan region. Prosperous neighborhoods in Erbil enjoy uninterrupted public services, while the majority of Erbil’s residents and those living across the broader Kurdistan region grapple with water and electricity shortages.

As much as Kurdish leaders admire the Emirati economic model, the KRG has failed to replicate the governance framework of the UAE, in its adept – federalist-based – distribution of power among its seven emirates. Somewhat paralleling differences in the UAE, the Kurdistan region contends with a division across two geographically and politically incongruous domains – a product of modern Kurdish political history, with the development of two dominant – and ideologically distinct – political movements led by rival, regionally dominant Kurdish clans. While these differences and rivalry are predominantly modern, they are also the product, in a way, of historical influences tracing back to the Ottoman and Safavid empires.

Historical attempts to consolidate these two inherently politically distinct Kurdish domains have yielded mixed results, attributable to the sway exerted by formidable political and economic stakeholders, at the personal and factional levels.

The current frictions over power sharing between the Kurdistan Democratic Party and Patriotic Union of Kurdistan – telegraphed in decades of pre-KRG competition and sometimes deadly rivalry, and erupting in intensifying stages since the 2017 referendum on independence – has precipitated profound political and societal divisions in the Kurdistan region. The KRG is currently without a functional Parliament for the first time since establishment of Kurdish self-rule in 1992, and its government exists in a caretaker capacity. The internal rifts are to a significant degree a function of the KRG’s weakened position in its relations with Baghdad.  They are also a product of long-suppressed political tensions between the two parties and Baghdad-Erbil political tensions, as well, that became harder to manage after the political fallout from the 2017 referendum. Political adversaries of the Kurds in Baghdad have keenly taken note of this intra-Kurdish factionalism, exploiting it incrementally to erode Kurdistan’s hard-won autonomy.

But a weakened Kurdistan region runs counter to the UAE’s political, security, and economic interests in Iraq. Abu Dhabi worries about a Shia-dominated Baghdad potentially becoming a significant security threat to the region. These concerns were heightened after a Shia militant group launched a drone attack on the UAE from Iraq in February 2022.

A Fresh Role for the Kurds

In 2017, the Kurdistan region suffered significant political, diplomatic, and economic setbacks when KRG leaders held an independence referendum at a time of heightened turmoil in the Middle East marked by the fight against the Islamic State in Iraq and the Levant and regional rivalries among Middle Eastern powers. The move annoyed U.S. officials, who insisted futilely that the timing was wrong, and infuriated Baghdad, rousing the federal government to take political and military action to forestall any implementation. Baghdad soon realized it was positioned to begin rolling back long-developing Kurdish political power.

Two developments with the central government in Iraq have since enhanced the KRG’s value as a partner to the UAE. First, the formation of the government in 2022 by the pro-Iranian Coordination Framework, led by Prime Minister Mohammed al-Sudani, was viewed as a setback to GCC-Iraq relations. Second, Emirati leaders have become increasingly dissatisfied with Iraq’s Sunni Speaker of Parliament Mohammed al-Halbousi, who had been a key point of contact for Abu Dhabi. Halbousi’s political approach with other Sunni factions has led to internal divisions, resulting in a weakened Sunni position in Baghdad, which has undercut Emirati interests in Iraq. While the UAE aimed to cultivate positive relationships with various ethnic and sectarian groups in Iraq, Halbousi pursued a divisive strategy, according to experts, attempting to control all communication channels and thriving on factionalism. Moreover, the formation of a new Sunni political alliance, the National Resolution Alliance, to rival Halbousi, highlights his diminishing influence in the Iraqi political landscape.

With Halbousi falling out of favor with the UAE, emblematic of slippage, as well, in the UAE’s influence with Sunnis, Abu Dhabi came to rely more heavily on the Kurds to navigate the increasingly complex politics of Baghdad. The UAE and other Gulf countries were concerned about whether the new government would continue former Prime Minister Mustafa al-Kadhimi’s efforts to improve relations between Baghdad and its Gulf neighbors.

Sudani, who has sought to delicately balance the demands of the factions that propelled him to power with his own vision for Iraq’s regional policies, has indeed carried forward the diplomatic progress achieved during his predecessor’s tenure. However, due to Sudani’s political patrons holding various levels of anti-GCC sentiments, he harbored uncertainties about how he would be received by the Gulf countries.

To allay the concerns of the Emirati leadership, Sudani turned to Nechirvan Barzani for assistance in bridging the gap between Baghdad and Abu Dhabi. Consequently, Barzani’s intervention played a pivotal role in facilitating Sudani’s February visit to Abu Dhabi.

Indeed, Barzani’s mediation efforts have extended beyond Iraq’s borders. He played a pivotal role in facilitating the first phone conversation between Mohammed bin Zayed and Turkish President Recep Tayyip Erdogan in 2021. This diplomatic initiative eased tensions and paved the path for the UAE and Turkey to restore relations. Barzani also served as a mediator between Erdogan and French President Emmanuel Macron, easing strained relations between Turkey and France.

Common Security Threats

The Kurdistan region and the UAE have both faced security threats from pro-Iranian Shia militia groups, increasing interest in security cooperation. The Kurdistan region’s Khor Mor gas field, which is operated by Emirati company Dana Gas, has experienced multiple attacks in recent years. In January 2022, a Yemeni Houthi group attacked an oil facility in Abu Dhabi killing three people. Prime Minister Barzani, who previously served as head of the KRG’s National Security Council, visited the UAE just five days after the attack and posted on social media: “I’m delighted to be in Abu Dhabi to engage in discussions about regional security and to explore opportunities for economic cooperation with the leadership here.”

As part of its comprehensive counterterrorism strategy, the UAE has provided humanitarian aid to Sunni areas in Iraq and to people in the Kurdistan region who have been displaced by conflict. The Kurdistan region has played a crucial role in facilitating UAE aid for postconflict reconstruction in the Sunni areas of Iraq heavily impacted by ISIL. This aid has helped people who have been displaced to return to their homes and rebuild their lives, and it has helped thwart extremist recruitment endeavors.

Economic Ties

The UAE is the second-largest investor in the Kurdistan region, with 25% of foreign direct investment, just trailing behind China. Five companies from the UAE have collectively invested over $2.5 billion in the Kurdistan region. Notably, UAE-based Dana Gas produces up to 500 million cubic feet per day of gas in the Kurdistan region, primarily for the region’s domestic consumption and electricity generation. Nevertheless, during the period when the KRG was exporting oil, Dana Gas produced 22,000 barrels of condensate per day that was blended with heavier oil to enhance its marketability in international oil markets.

In a concerted effort to fortify investment, trade, and economic ties, Abu Dhabi and Erbil have proposed to collaboratively establish the UAE-Kurdistan Economic Council. Ahmed Al Dhaheri, the UAE consul general in Erbil, has said that six Emirati banks are considering opening branches in the Kurdistan region. In a March 2022 meeting with Prime Minister Barzani in Dubai, UAE Minister of Energy and Infrastructure Suhail Mohamed Faraj al-Mazrouei also expressed the UAE’s intent to increase investments in Iraq, with a specific emphasis on the Kurdistan region. However, with the current economic standstill and unpredictability in the Kurdistan region due to the Erbil-Baghdad dispute over the Iraqi budget law, foreign investors might have less incentive to pursue such ventures now. A senior Kurdish official highlighted the Emiratis’ cautious approach to actions in the Kurdistan region, aimed at avoiding any disruption with Baghdad officials. The official underscored that fostering favorable Erbil-Baghdad relations will be pivotal in advancing UAE-Kurdistan ties.

Trade between the Kurdistan region and the UAE is valued at approximately $3 billion per year. Historically, this trade skewed heavily in favor of the UAE. However, since 2022, the UAE has become a primary market for Kurdish agricultural products, as the KRG has worked to diversify exports beyond hydrocarbons. A notable achievement was the introduction of pomegranates as the first non-oil Kurdish product in the UAE. Furthermore, in August, the KRG signed an agreement to export 5,000 tons of potatoes to the UAE. Projections suggest that up to 90% of Kurdish potato production will soon find its place in the UAE market. The KRG also has plans to export apples, grapes, and other agricultural products to the UAE and other Gulf markets. Some UAE-based companies have been conducting feasibility studies to explore opportunities for large-scale agricultural and livestock production in Kurdistan, as part of the UAE’s food security initiatives.

Prime Minister Barzani’s Cabinet has prioritized economic diversification for Kurdistan, aiming to reduce its reliance on oil. Given the progress the UAE has made in diversifying its own economy away from hydrocarbons, the Kurdistan region stands to gain valuable insights, particularly in the wake of Erbil’s recent handover of control over its oil sector to Baghdad.

Kurdish-UAE relations have transformed over recent years, as both Erbil and Abu Dhabi have come to recognize the importance of cooperation, driven by a convergence of political, economic, and security imperatives. Nevertheless, the growing partnership faces potential vulnerabilities coming from increasing intra-Kurdish factionalism and fluctuation of relationships with Baghdad. To maintain their relevance in the regional power paradigm, Kurdish leaders must build a unified front that represents their collective interests on the domestic and regional levels