US Think Tank Warns of Fallout from Iraqi Federal Government’s Policy Toward Kurdistan Region

ARK News.. The American Global Strategy Institute (AGSI) has warned that the ongoing financial pressure exerted by Iraq’s federal government on the Kurdistan Region not only threatens Iraq’s stability but also undermines vital U.S. interests in the Middle East.

In a new report, AGSI details how Baghdad’s financial crisis has been weaponized into a tool of coercion, describing a systematic campaign of withholding budget allocations and delaying public sector salaries to force Erbil to comply with central government policies on oil and gas. The report highlights how these measures have gained a veneer of legal legitimacy through federal court rulings, deepening the crisis and dramatically weakening the region’s financial autonomy.

AGSI experts note with concern that these developments jeopardize the longstanding U.S.–Kurdish partnership, which has been a cornerstone in the fight against terrorism. The Kurdistan Region, they emphasize, played a pivotal role in defeating ISIS and preserving regional stability.

Analysts further warn that continued economic deterioration in the region could create fertile ground for expanded Iranian influence, complicating an already fragile geopolitical landscape.

In the face of this escalation, the report recommends adopting a more prudent strategy based on dialogue rather than financial sanctions. It underscores that a strong, stable Kurdistan is not only essential for Iraq’s security but also serves as a crucial safeguard for Western interests in an intensely competitive international arena.

The warning comes as Baghdad and Erbil are experiencing one of their most strained periods in recent memory over disputes surrounding oil revenue sharing and budget allocations. Meanwhile, Washington remains keen to protect its strategic legacy in the Kurdistan Region—a legacy built on substantial human and financial investment over the past two decades.
Iraq, Kurdistan Region, US Policy, AGSI, Baghdad Erbil Tensions, Middle East Stability

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