Iraqi Kurdish officials have decided to hold an independence referendum on September 25 of this year. The decision was widely anticipated, since Masoud Barzani, president of the Kurdistan Regional Government (KRG), had explicitly promised an independence referendum once ISIS were defeated.

Yet without any stamp of approval from Baghdad and the international community—or at least from the majority of permanent members on the U.N. Security Council—the referendum will not by itself make the Kurdish dream of statehood a reality. The Kurds are well aware of this.

Instead, the likely overwhelming vote in favour of independence could inflame already tense relations between the Kurdish capital, Erbil, and Baghdad. The same goes for Turkey and Iran, on whose trade Erbil currently depends for survival as a separate entity. So if this independence vote could escalate tensions and will not confer statehood, why is the KRG holding it?

Political goals

The answer is deceptively simple: political expediency. Beyond its historic importance for Kurds’ independence aspirations, the decision to hold a referendum may conceal more mundane objectives. In particular this referendum has much to do with tactics in their dealings with the Iraqi government. The main prizes are increased oil revenues and territory, particularly the oil-rich region of Kirkuk.

First, oil revenues. Baghdad cut off federal disbursements following an acrimonious dispute over oil revenues in 2014. The Kurds retaliated by stopping crude oil deliveries to the central government, instead selling oil directly to Turkey through a newly built pipeline.

Negotiations with Baghdad have been on hold due to the military imperative of fighting ISIS. But with ISIS now close to defeat, oil sharing has come back to the fore. KRG officials may be hoping the referendum will increase their bargaining power, pressuring Baghdad into larger monthly disbursements. Erbil argues that, under the Iraqi constitution of 2005, it should receive roughly 17 percent of federal revenues from oil exports, amounting to about $1 billion per month.

Kurdish officials may also have an eye on disputed areas that have fallen under their authority. ISIS previously swept through large swathes of northwestern Iraq, directly threatening oil-rich Kirkuk. The much acclaimed Kurdish armed forces, the “Peshmerga”, fronted the counterattack and have been in de facto control of Kirkuk since 2014. The Kurds recently raised their flag on municipal buildings—to vehement criticism from Turkey and the local Turkmen community.

If these disputed areas deliver a strong Yes vote in September, Kurdish rule could be legitimized. The vote could then confer further bargaining advantages with Baghdad in relation to revenue sharing, further devolution of power and the demarcation of KRG borders (as well as Kirkuk, Erbil claims authority over the contested areas of Makhmour, Shingal and Khanaqin).

Economics and realpolitik

The referendum might also divert attention from the dire economic situation of Iraqi Kurdistan since 2014. Along with losing federal disbursements, the fight against ISIS and the fall in oil prices have led the economy to the brink of collapse.

Kurdish officials and the wider population of around 5 million may have valiantly coalesced around the war effort against ISIS, but dissent is intensifying. With the local parliament suspended since 2015 following a row over Barzani’s decision to extend his term as KRG president, grassroots opposition has been gathering steam.

Cracks have been appearing in the grand alliance between the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK). This is critical to the region’s survival as a separate entity, KDP and PUK having fought bitterly in the past for political and military dominance.

With a growing array of disgruntled domestic actors, the Kurdish leadership may have calculated that the moment is ripe to rally the population around the independence struggle and buy precious time to begin “putting the house in order.”

In addition, the independence vote will help to cement an effective separation from Iraq that dates back to the 1990s. It sends a signal that, in the long run, nothing short of independence will placate the Kurds. The referendum also allows Kurdish politicians to gauge the potential for international recognition of an independent Kurdistan.

The ConversationSo barring unforeseen events, the population will probably deliver an overwhelming Yes vote to independence on September 25. Since this is about the latest tactics in the continuation of the conflict between Erbil and Baghdad by other means, we can then expect a showdown with the KRG’s domestic and regional adversaries. Only time will tell whether Erbil has been correct to calculate that the benefits outweigh the political risks of going ahead.