Kirkuk oil wealth fuels prosperity

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KIRKUK, Iraq -- Relative stability and oil wealth are drawing jobs and opportunities to the northern city of Kirkuk, which will soon be the first major city in Iraq to take charge of its own defense.

But the same qualities that are leading businesses to relocate from Baghdad have made ethnically divided Kirkuk a major bone of contention as Kurdish and Shi'ite factions wrestle over the shape of Iraq's new government.

While much of Iraq struggles with roadside bombs and suicide attacks, Kurdistan -- the northern region where Kurds enjoyed more than a decade of virtual autonomy within a U.S.-enforced no-fly zone -- is prospering.

Kurds living abroad have begun to return home to set up new businesses. Construction is booming. And with oil fields containing 40 percent of Iraq's reserves nearby, opportunities are plentiful.

The multiethnic city of nearly 1 million has begun to attract investment from other parts of Iraq, said Maj. Darren Blagburn, intelligence officer for the U.S. Army's 116th Regiment in Kirkuk.

"We're seeing a lot of businesses move to Kirkuk from Baghdad," he said.

Local security forces, manned mostly by former members of the Kurdish militia, the peshmerga, are also more capable than those in other parts of Iraq.

As a result, the U.S. Army plans within weeks to make Kirkuk the first city in former Ba'athist-controlled areas to complete the transition from foreign to local protection.

All this has made the city a critical prize in the more than two months of negotiations for a new government between a Kurdish faction led by Jalal Talabani and a Shi'ite faction led by Ibrahim al-Jaafari.

The Kurds want to annex the city and make it the capital of an autonomous Kurdistan, arguing that Kirkuk holds the same significance for them that Jerusalem holds for the Jews.

Mr. Talabani will have serious problems with his followers -- many of whom favor outright independence -- if he trades away that dream.

"In order to keep a unified, peaceful Iraq, Talabani must keep the Kurds back," Maj. Blagburn said.

But neither can Mr. al-Jaafari easily give away the city, which was subject to an "Arabization" campaign under Saddam Hussein and now is home to roughly equal numbers of Kurds, Shi'ites and Sunni Arabs.

Baghdad has a monopoly on the state's oil production and is using most of Kirkuk's oil revenue to fund reconstruction elsewhere in Iraq -- something that could end if the Kurds get what they want.

There are fears that any Kurdish attempt at taking control of Kirkuk could instigate large-scale violence owing to what Maj. Blagburn calls the city's "competing social demographics."

Mr. Talabani so far has been careful to acknowledge Kurdish sentiment about Kirkuk without committing to any course of action that would put him at odds with the new government.

But in a recent interview with United Press International, he described the city as sacred to the Kurds. "Historically and demographically speaking, Kirkuk was never part of Iraq, but part of Kurdistan," he said.