Ben Van Heuvelen
As security forces in northern Iraq crumble under the onslaught of 
Islamist militants, the autonomous Kurdistan region -- a bastion of 
stability -- is rapidly laying the groundwork to become an independent 
state.
Iraqi forces have continued to cede territory to an 
insurgency led by the Islamic State of Iraq and Syria (ISIS), which is 
swiftly advancing toward Baghdad after capturing Mosul on Tuesday. 
Kurdistan's military forces, known as the pesh merga (or "those who face
 death"), have taken over many of the northernmost positions abandoned 
by the national army, significantly expanding the zone of Kurdish 
control.
"As the Iraqi Army has abandoned its posts .?.?. 
Peshmerga reinforcements have been dispatched to fill their places," 
Jabbar Yawar, secretary general of the Ministry of Pesh Merga Affairs, 
said in a statement.
The Kurds have also recently taken a big step
 toward economic independence by deepening a strategic alliance with the
 Turkish government. In late May, they began exporting oil via a 
pipeline through Turkey, with the revenue set to flow into a 
Kurdish-controlled bank account rather than the Iraqi treasury.
"This
 economic independence is vital for the Kurdistan region," Prime 
Minister Nechirvan Barzani said in an address to the Kurdish parliament 
last month. "We will not stop here."
Strained relations
Strained relations
Since
 the beginning of the year, Iraqi Prime Minister Nouri al-Maliki has 
responded to Kurdish oil ambitions by cutting the monthly distribution 
of the region's share of the national budget. The Iraqi government has 
also filed an international arbitration claim against Turkey for 
facilitating the exports, which Baghdad characterizes as smuggling, and 
has threatened to sue anyone who buys the oil.
With relations 
badly strained, there is little appetite in the Kurdish capital of Irbil
 to provide any military support to Maliki.
"The Iraqi government 
has been holding the Kurds hostage, and it's not reasonable for them to 
expect the Kurds to give them any help in this situation without 
compromising to Kurdish demands," said an adviser to the Kurdish 
government, speaking on the condition of anonymity to be candid.
The pesh merga say they have not tried to displace ISIS from territory it now controls.
"In
 most places, we aren't bothering them [ISIS], and they aren't bothering
 us -- or the civilians," said Lt. Gen. Shaukur Zibari, a pesh merga 
commander.
In his statement, Yawar said, "There is no need for Peshmerga forces to move into these areas."
The
 United States has tried for several years to broker agreements to bring
 Irbil and Baghdad closer together, but the efforts have failed because 
the two sides have fundamentally different visions for the country. 
Whereas Maliki has pushed for centralized control -- especially over the
 oil resources that provide 95 percent of state revenue -- the Kurds 
have insisted that the constitution grants them almost total autonomy.
The
 conflict has been so tense recently that Kurdish leaders have obliquely
 suggested that, absent concessions from Maliki, they will hold a 
referendum on whether to declare independence -- a measure that would 
almost certainly pass amid an upswell of Kurdish nationalism.
"The
 policy of the Kurdistan Regional Government is to never take a step 
backward," Barzani said in his address to parliament. "If we do not 
arrive at any resolutions [with Baghdad], then we have other 
alternatives, and we will take them."
Tensions have also been 
aggravated through the years by territorial disputes. In the aftermath 
of Saddam Hussein's regime, which waged campaigns of ethnic cleansing, 
ethnic groups have made competing claims to a belt of land stretching 
across the country as the formal boundary between the Kurdistan region 
and federal Iraq remains unresolved.
The symbolic heart of these 
disputes has been the oil-rich city of Kirkuk, which some have called 
the Jerusalem of the Kurds. On Thursday, after the national army left, 
Kurdish flags were flying where Iraqi flags once were, and Yawar said 
Kurdish forces "now control Kirkuk city and the surrounding areas." Even
 Iraqi government oil facilities were now being guarded by Kurdish 
forces, Kurdish security officials said.
Turkish lifeline
Turkish lifeline
As
 the Kurds try to shore up their territory, they also need an economic 
lifeline, and they have turned to Turkey. Last year, the landlocked 
Kurds built an oil pipeline to the Turkish border and signed agreements 
to govern the export of oil and gas to the Mediterranean; now, crude has
 begun to flow.
Those exports, which began May 22, were a 
milestone. Although the Kurds have been able to export oil for years by 
truck, only a pipeline can enable them to sell enough oil to replace the
 revenue being withheld by Baghdad.
In the meantime, the Kurdish 
government is staying solvent through loans from companies and foreign 
banks, according to Barzani. Two officials involved in the Turkey deal, 
speaking on the condition of anonymity because of the sensitivity of the
 topic, said the Turkish government had granted a loan directly to the 
Kurds, but they did not disclose the amount or the terms.
Turkey's
 willingness to facilitate such autonomy marks a dramatic reversal by 
Prime Minister Recep Tayyip Erdogan, whose administration once worried 
that an independent Iraqi Kurdistan might inspire Turkey's own Kurdish 
minority to seek a similar outcome. Erdogan was swayed, ultimately, by a
 convergence of interests, particularly Turkey's growing energy demands.
 Now, with the rise of ISIS, Iraqi Kurdistan also represents a 
geographic buffer between Turkey and the chaotic violence to the south.
"Turkey
 will use its influence in Irbil to discourage independence," said one 
of the Turkish officials involved in the energy deal. "But if Kurdistan 
should become independent, then, to put it in financial terms, Turkey 
has bought that option."
The question now facing the Kurds is 
whether they can hold the line against ISIS. The group has begun 
attacking some of the pesh merga's forward positions and nearly killed 
the leader of the force, Sheik Jaafar Mustafa, with an IED targeting his
 convoy near Kirkuk, according to a pesh merga soldier stationed there.
So
 far, the pesh merga have been able to repel ISIS attacks, and the 
Kurdistan region seems to have the military capability -- and the 
backing of a powerful neighbor -- to succeed without the federal 
government.
Drawn to this relative stability, tens of thousands 
from besieged Mosul have sought refuge in the region. Among them were 
three top Iraqi generals; on Thursday, the Kurdish government put them 
on a plane to Baghdad.
Loveday Morris in Irbil contributed to this report.
 
