Although Iraq is a fairly diverse country with three broad groupings – Shiites, Sunnis and Kurds – the country's Shiite contingent is easily the largest. But Iraqi Shiites are deeply internally divided. Currently, many in the Shiite-dominated province of Basra are pushing for increased autonomy and calling for more local investment and development due to the province's energy wealth. But the Iraqi government — also predominantly Shiite — is unlikely to support this goal, since its economic health relies on Basra's resources.
The Iraqi province of Basra produces roughly the same amount of oil as the entirety of the neighboring country of Kuwait. But it has little control over its own revenue, since the Iraqi federal government, which pulls the country's purse strings, is located in Baghdad. This economic reality has on multiple occasions prompted Basrawis to push for increased autonomy and greater control over their region's oil wealth. And on April 1 the Basra Provincial Council launched another significant attempt to do so by voting, unanimously, to become an autonomous region of Iraq under the country's constitution. The move could trigger a clause in the Iraqi Constitution that would allow the province to become a region through a referendum. If the council's efforts are successful, Iraq's economic capital would obtain a status similar to the Kurdistan Region of Iraq. But Baghdad won't accept Basra's push easily.
Basra: Iraq's Restive Economic Capital
Basra is home to about two-thirds of Iraq's oil production and an even higher amount of the country's proven oil reserves. But it has been in near-constant disputes with Baghdad over oil revenue and local investment since former leader Saddam Hussein was toppled more than 15 years ago. Some Basra council members in the past have claimed that Baghdad owes the province some $45 billion in unpaid oil and gas revenues from previous agreements — although that figure is certainly inflated.
The Difference between a Region and a Province Matters
If Basra became its own region, its constitutionally enshrined powers would increase dramatically. Although Baghdad would technically retain the rights to all oil fields that are currently producing oil, Basra could — like the Kurdistan Regional Government — claim that it controls the rights to any oil and gas fields not currently producing, and it could then auction them off. If an autonomous Basra pursues this option, it would open up the door for increased local revenue to the local government as well as opportunities for Basrawi companies to gain local contracts in the oil and gas sector. Basra would also gain more control over its domestic economy and broader economic management decisions.
If Abdul-Mahdi's government eventually moves to prevent the Basra Provincial Council's referendum push, Basra could be in for another restive period marked by increasing protests and violence.
What to Watch For
Iraqi politicians in Baghdad will likely try to prevent a referendum. And there will almost certainly be calls from figures like Shiite leader Muqtada al-Sadr and Grand Ayatollah Ali al-Sistani against such an action. Iran, which would not want to see the Shiite camp in Iraq divided further, would also try to stop pro-Iranian parties and Iranian-back militias in Iraq from supporting Basra's push for autonomy.
Basra's push for an independence referendum will put Iraqi Prime Minister Adel Abdul-Mahdi in a difficult position. Abdul-Mahdi is trying to manage a chaotic government and has struggled to appoint critical interior and defense minister Cabinet positions. To contain instability, he will likely try to negotiate with Basra. The question is: To what extent can he be successful? His predecessor, Haider al-Abadi, struggled to find money and revenue to appease protesters in 2018, and Baghdad's financial position has not improved since then. If Abdul-Mahdi's government eventually moves to prevent the Basra Provincial Council's referendum push, Basra could be in for another restive period marked by increasing protests and violence.