Christopher Foot: Reforming Iraq's currency system amid the ruins of war and the challenges of the future.
Christopher Foot: Reforming Iraq's currency system amid the ruins of war and the challenges of the future.
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Dr. Mazhar Muhammad Saleh
Christopher L. Foote arrived in the country, days after moving from his position as chief economist on the Council of Economic Advisers in February 2003, the body directly subordinate to the President of the United States, to the position of chief economic policy advisor at the Federal Reserve Bank of Boston, to find his way in the few days before the occupation to his next stop was Iraq, until the man began to take hold of the file of ((supporting the project to issue the new Iraqi dinar)).
Meeting him in May 2003 was fraught with the anxieties of working amidst the ruins of war-torn, burned-out buildings, and facing monetary and banking policies whose design and implementation remained a mystery. We managed to find a place to sit, surrounded by dust on all sides, and he began speaking about the problems of printing currency locally during the years of sanctions, and how to transition to a currency resistant to counterfeiting or tampering, one befitting Iraq and the future of its payment systems.
Our discussions concluded, and I sensed that Christopher Foot, a figure with experience teaching at Harvard University, was impressed by the professional and academic dialogue we had. He said he would present the Coalition Provisional Authority with technical details based on the discussions we had had with a young Australian of Iraqi origin, a university professor of economics in Australia, who was assigned to work with the Coalition Provisional Authority's economic team.
That young man had convinced us of the importance of issuing the next currency in a style similar to the Australian dollar, made of polymer. He argued that this currency would have a longer lifespan, look better than paper currency, and function efficiently even in tropical and subtropical climates, like the Singaporean currency, of which he had brought a sample. This was agreed upon, with the possibility of removing zeros, and many other serious points related to gradually improving the currency system and exchange rate. I don't know why those recommendations were ignored, perhaps due to the dominance of the Treasury team, which Christopher Foot said had the final say.
He was saddened by the devastation that had befallen the country and told me he was keeping a diary about our country and its economy, which he later dedicated to an article published in the Boston Federal Reserve's quarterly journal, Volume 13, in 2003. That article, considered the most famous on the situation in Iraq at the time, was titled:
"
An Economist Reports from Baghdad: Reviving the Iraqi Economy in the Aftermath of War."
More importantly, Christopher Foot, after describing his experience inside post-war Baghdad and how the American team dealt with the collapse of financial institutions and the Iraqi currency and the reconstruction of the economy, repeatedly pointed out, admitting that the American team entered Iraq lacking deep knowledge of Iraqi society, or even sufficient experience in transforming the economy of a centralized state into a market economy, and that many decisions were made amidst chaos and a lack of information.
The Iraqi currency ended up being issued in the same denominations, and Christopher Foot's report was ignored.
The central bank's buildings were rebuilt, its new law was issued granting it legal independence, and the new currency was issued… I remembered Christopher Foot while talking to the chief expert at the currency printing company, asking: What is the difference between the paper currency that you printed and the idea of plastic currency, which is more durable and is used by Australia, Singapore and many other countries!
He answered me with an Anglo-Saxon smile, saying:
“Which do you prefer, playing football on a field planted with natural green grass or one planted with artificial grass?”
He then replied:
“Playing on natural grass is certainly more in keeping with nature than playing on artificial grass manufactured in plastic factories.”
She smiled without conviction!
The dialogue continued in a climate where the forces of the global economy converged in Singapore in 2006, on the sidelines of official meetings with delegations participating in the annual conference of the International Monetary Fund and the World Bank.
Everyone was delighted, as the dinner where the currency discussion resumed was held in the hall of a prestigious club, the former residence of the late British statesman Winston Churchill, and many of his meals had been enjoyed in this classic hall since the 1920s, in a world then governed by the British Colonial Office.
Thus, the story of the new Iraqi currency remained more than just a monetary project or a banknote replacement process; it was an attempt to redefine confidence in a country just emerging from the storm. Amid the smoke of war, the ruins of institutions, and the hastily conducted dialogues amidst the devastation, profound questions arose about the meaning of the state, economic independence, and the future of Iraq's currency.
Over the years, the image of Christopher Foot remains vivid—the economist who came from academia and public policy to witness a country searching for its identity amidst chaos and a will to survive. Perhaps not all his ideas were adopted, and many recommendations were lost in the clamor of international decision-making, but what remains constant is that building a currency was never a purely technical matter; it was part of rebuilding the Iraqi spirit itself.
The Friday sermon preacher in Najaf: The Prime Minister faces the problems of power-sharing and international interference.
The Friday prayer leader of Najaf, Sadr al-Din al-Qubanchi, expressed the Iraqi people's expectation that the newly elected Prime Minister would announce the completion of the cabinet to provide services.
During his Friday sermon, al-Qubanchi stated, "Our people are still waiting for the Prime Minister to complete the cabinet, as we have nine ministries that remain vacant.
" He added, "The Prime Minister faces two problems: the first is the issue of power-sharing on one hand, and international interference on the other. There have been leaked reports of an effort by some Arab countries at the United Nations to designate Iraq as a state sponsor of terrorism if a member of the resistance is given a ministry.
" The Friday prayer leader questioned the benefit to Iraq of creating new ministries that would cost a huge budget, arguing that streamlining the cabinet would be preferable. He concluded, "We hope that the framework and the Prime Minister's office will study this matter in a way that serves the interests of Iraq, not the interests of political parties."
Government advisor: The 2026 budget will focus on reducing unnecessary spending.
The Prime Minister's financial advisor, Mazhar Muhammad Salih, confirmed on Friday that the 2026 budget will focus on reducing unnecessary spending and ensuring funding for vital sectors directly related to citizens' lives. He also indicated that continuing to operate under the amended Federal Financial Management Law No. (6) of 2019 remains a constitutional and financial option should the budget's approval be delayed.
Salih stated, "In light of the escalating crisis in the Strait of Hormuz, through which the world's oil artery passes amidst anxiety and tension, Iraq finds itself facing a dual challenge: how to successfully enact its 2026 budget amidst regional turmoil that threatens its oil exports, while simultaneously maintaining internal financial stability."
He added, "The budget is no longer merely an accounting document or a set of figures; it has become a political and economic equation reflecting the nature of the Iraqi economy, which is based on oil revenues, and simultaneously revealing the state's ability to manage its financial resources prudently and efficiently in a highly volatile and fragile regional environment."
He added, "Given the escalating geopolitical conflict in the Middle East and the accompanying direct and indirect threats to maritime navigation and energy flows in the Strait of Hormuz, the possibility of enacting Iraq's 2026 budget appears constitutionally and politically viable. However, it will be one of the most sensitive and complex budgets in Iraq's modern financial history due to the intrinsic link between the Iraqi economy and global oil markets."
He pointed out that "Iraq still relies almost entirely on oil revenues to finance salaries, pensions, social welfare, general operating expenses, and investment projects. This makes any disruption to exports through the Gulf a direct pressure on the country's financial and monetary stability." He noted that "the financial authorities are expected to prepare a more conservative budget based on prudent oil assumptions, reducing unnecessary spending and reprioritizing expenditures to protect social spending related to salaries, pensions, social welfare, and basic services, as well as ensuring funding for vital sectors directly impacting citizens' lives and their economic stability."
He explained that "conversely, geopolitical crises often drive up global oil prices, which could provide Iraq with temporary financial relief, mitigating the deficit and offering an opportunity to pass the 2026 budget without a direct financial collapse, especially if the financial administration succeeds in managing oil revenues efficiently, activating export alternatives, reducing financial waste, and increasing the efficiency of public spending."
He stated that "continuing to operate under the amended Federal Financial Management Law No. (6) of 2019 remains a constitutional and financial option if the budget's approval is delayed due to continued uncertainty and tension in the regional landscape."
He
pointed out that "the real challenge lies not in the debate surrounding the enactment of the 2026 federal budget law itself, but rather in the ability of public finances to ensure the sustainability of funding amidst a turbulent regional environment and an economy that relies almost exclusively on oil."
He explained that “the 2026 budget, if it is enacted under the current geopolitical climate, appears to be closer to a (crisis management budget) than to a budget for economic expansion or long-term sustainable development, which requires the legislative and executive authorities to deal with it with economic rationality and financial realism, far from containment policies, immediate reactions and ill-considered emergency spending.”
Government advisor: The 2026 budget will be a “crisis managementbudget”
The financial advisor to the Iraqi Prime Minister, Mazhar Muhammad Salih, warned of the challenges that may face in preparing the general budget for 2026, in light of the escalating geopolitical tensions in the Gulf region, describing the anticipated budget as being closer to a “crisis management budget” than to a budget for economic expansion or long-term development.
Saleh said, in a statement followed by (Al-Mada), that the escalating crisis in the Strait of Hormuz puts Iraq before a double challenge, which is to ensure the continuation of internal financial stability, in conjunction with protecting its oil exports, which constitute the main source of public revenues.
He explained that the budget “is no longer just an accounting document or tables of numbers,” but has become a reflection of the nature of the rentier Iraqi economy and the extent of the state’s ability to manage its resources amid a turbulent regional environment.
He indicated that the government would most likely move towards preparing a more conservative budget based on cautious oil assumptions, focusing on reducing unnecessary spending and rearranging priorities towards protecting salaries, pensions, social welfare and basic services.
He added that any disruption to oil exports through the Gulf would put direct pressure on Iraq’s financial and monetary stability, given the country’s almost complete dependence on oil revenues to finance operational and investment spending.
In contrast, Saleh pointed out that geopolitical crises may lead to a rise in global oil prices, which may give Iraq a temporary financial reprieve that alleviates the severity of the deficit and helps to pass the budget without an immediate financial crisis, provided that revenues are managed efficiently, waste is reduced, and the efficiency of public spending is increased.
He stressed that continuing to work according to the amended Federal Financial Management Law No. 6 of 2019 remains an option if the budget is delayed due to continued regional uncertainty.
Saleh concluded by saying that the real challenge lies not in the budget legislation itself, but in the state’s ability to ensure the sustainability of funding in an economy that is almost entirely dependent on oil, calling for dealing with the 2026 budget with “economic rationality and financial realism” away from emergency spending and ill-considered policies.
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New US sanctions against Iran
The US Treasury Department announced on Friday evening new counter-terrorism sanctions targeting individuals and entities in Iran.
Meanwhile, US Treasury Secretary Scott Bisent said that any lifting of the financial and economic embargo imposed by the United States on Iran would be slow.
He added, "We'll see... it will be like that - anything that lifts, lifts slowly."
Earlier today, Bessent announced that US authorities had seized nearly $1 billion worth of encrypted digital assets linked to Iran as part of sanctions and monitoring activities targeting crypto assets linked to Tehran.
Washington removes the name of an Iraqi with 12 titles from its sanctions list.
The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced Thursday evening that it had lifted sanctions on 76 entities and individuals who were on old sanctions lists, including an Iraqi citizen whose name appeared in various forms in the department’s records.
This move came as part of an initiative to modernize the US sanctions system, a trend discussed by Treasury Secretary Scott Bisent during the "No Money for Terror" conference held in the French capital, Paris.
The US Treasury explained in its statement , which was reviewed by Shafaq News Agency, that the review included removing restrictions on deceased individuals, ships that were dismantled or taken out of service, as well as people who were previously classified as part of illicit financial networks that no longer exist, or others who were listed more than a decade ago without sufficient identifying data to continue scrutinizing them.
According to Treasury Department documents, the updated list included a prominent Iraqi citizen named Badran Turki Hishan al-Mazidi, who was born in Mosul, the center of Nineveh Governorate, and is known by the nicknames "Abu Ghadiya" and "Abu Abdullah".
The lifting of restrictions on him came after his name and titles appeared in 12 different forms in previous lists to avoid merging identities.
The list also included the removal of other names and companies belonging to multiple nationalities, including Colombia, Algeria, Mexico, the Philippines, Burma and Germany.
Worth $1 billion: Washington seizes cryptocurrency assets linked to Iran
U.S. Treasury Secretary Scott Bisent announced on Friday that U.S. authorities have seized nearly $1 billion worth of encrypted digital assets linked to Iran as part of sanctions and monitoring activities targeting crypto assets linked to Tehran.
Bloomberg quoted Bessent as saying that the seizure was part of US efforts to track and monitor the flow of sanctioned digital currencies.
The US Treasury Secretary did not disclose the type of cryptocurrency that was seized or when the operation took place.
Last month, Bessent announced that the U.S. Treasury Department’s Office of Foreign Assets Control had imposed sanctions on a number of electronic wallets linked to Iran, resulting in the freezing of $344 million in cryptocurrency.
Bisent said these measures are part of ongoing efforts to prevent Tehran from "providing, transferring, and bringing funds home," stressing that the department will continue, as part of the "economic wrath" campaign, to systematically deny Iran access to its financial resources.
Recent Western reports have revealed the expanding use of cryptocurrencies to finance networks linked to the Iranian Revolutionary Guard, through global trading platforms, most notably Binance, the world’s largest cryptocurrency exchange.
The Wall Street Journal recently published a lengthy investigation that discussed billions of dollars in financial transfers that passed through Binance to networks linked to Iran, some of which are directly linked to the Revolutionary Guard, despite the US sanctions imposed on Tehran for years, and despite previous pledges from the platform to tighten monitoring and financial compliance systems.
TRM Labs, a company specializing in tracking digital transactions, estimates that Iranians conducted cryptocurrency transactions worth more than $10 billion last year alone, a figure that reflects the growing reliance on the digital economy within Iran, whether by individuals, institutions, or state-affiliated networks.
Kazakhstan open to holding Iran’s enriched uranium stockpile, says IAEA chief
Kazakhstan has expressed willingness to receive Iran’s stockpile of uranium enriched to levels close to those required for weapons production, International Atomic Energy Agency (IAEA) Director General Rafael Grossi revealed on Friday.
In remarks to the Financial Times, Grossi said Kazakhstan would be prepared to do so if the United States and Iran reach an agreement on Tehran’s nuclear program, adding that the Central Asian country signaled its openness to the idea during a meeting between President Kassym-Jomart Tokayev and Grossi in Astana earlier this week.
Kazakhstan hosts an internationally supervised low-enriched uranium bank designed to guarantee fuel supplies for nuclear power plants in IAEA member states and help prevent the proliferation of nuclear weapons. The storage facility was established in cooperation with the IAEA and officially opened in 2018.
Meanwhile, US President Donald Trump insisted that Iran must agree never to obtain a nuclear weapon, claiming that its enriched nuclear material “will be unearthed” and destroyed by the United States in close coordination with Tehran.
Trump announces lifting of naval blockade in the Strait of Hormuz
US President Donald Trump announced on Friday the lifting of the naval blockade in the Strait of Hormuz, stressing the need to reopen it immediately to international shipping without any transit fees.
Trump said in press statements, as reported by Shafaq News Agency, that "ships stuck in the strait due to the blockade, which will now be lifted, can begin the process of returning," adding that "the Strait of Hormuz must be opened immediately without transit fees in both directions."
He noted that "all sea mines will be removed if found," explaining that US forces "detonated many of them," while Iran will immediately remove the remainder.
Trump asserted that "ships stuck in the Strait of Hormuz can return home," emphasizing that "Iran must agree that it will never possess a nuclear weapon or bomb."
He pointed out that "the nuclear dust buried deep underground will be extracted in coordination with Iran and the International Atomic Energy Agency."
He concluded that "no money will be exchanged with Iran until further notice," revealing that he would go to the "operations room to make the final decision on this matter."
After the depletion of state-owned banks, the central bank faces the burden of financing.
Economist Mahmoud Dagher gave a briefing on the liquidity crisis facing government banks and its implications for the state’s ability to finance its needs through domestic borrowing, warning of continued financial pressures if the current crisis lasts for an extended period.
Dagher told Al-Jarida that “the low level of liquidity in government banks makes it difficult to resort to them to achieve internal borrowing, which prompted the Ministry of Finance to transfer remittances to the Central Bank for discounting instead of having them discounted by government banks.”
He added that “this measure leads to additional pressure on the debt-backed central bank budget,” indicating that “the continuation of the crisis for a longer period may force the government to look for alternative solutions, foremost among them being reducing public spending and rationalizing expenditures to limit the increasing financial pressures.”
Washington seizes $1 billion in Iranian cryptocurrency assets amid sensitive negotiations over a potential deal.
US Treasury Secretary Scott Bisent announced on Friday that the United States had seized $1 billion in cryptocurrency assets belonging to Iran, in a move that coincides with ongoing talks about a possible agreement between Washington and Tehran to extend the ceasefire and reopen the Strait of Hormuz.
Bisent said the confiscation was part of what he described as the economic aspect of the policy of putting pressure on Iran, noting that any lifting of sanctions and the US financial embargo would be “slow and gradual” if understandings were reached.
In contrast, the Iranian Fars News Agency quoted unnamed sources as saying that an agreement had been reached to release about $12 billion of frozen Iranian assets abroad, while US President Donald Trump denied allowing any exchange of funds “until further notice,” according to a post on the Truth Social platform.
These developments coincide with reports that the two sides are close to drafting a preliminary political framework to extend the truce in place since April, which could allow for the resumption of shipping and energy traffic through the Strait of Hormuz, at a time when the issues of the Iranian nuclear program and the lifting of sanctions remain the most prominent points of contention.
Trump indicated that he would hold meetings in the White House Situation Room to make the final decision on the agreement, stressing that Iran “will not have a nuclear weapon,” and emphasizing the need to open the Strait of Hormuz to international navigation without restrictions.
Energy markets are experiencing significant volatility amid continued uncertainty, with oil prices falling and stock markets rising following leaks about possible progress in negotiations, amid conflicting accounts between the two sides regarding the terms of the anticipated agreement.
New York Times: Trump made no immediate decision after two-hour meeting on Iran
US President Donald Trump concluded a meeting on Friday that had been presented earlier as being for a final decision on reaching an understanding with Iran, according to a White House official.
The official did not clarify whether Trump made a decision or not at this meeting, which was held in the White House operations room, according to AFP.
The New York Times reported that the meeting lasted two hours and that Trump did not make any immediate decision as a result.
Prior to his meeting, US President Donald Trump announced the terms and principles of a potential agreement with Tehran to end tensions between the two countries, revealing strict conditions related to the nuclear issue, freedom of navigation in the Strait of Hormuz, and sensitive security and military matters.
In a lengthy post published on his official Truth Social account (May 29, 2026), Trump stressed that the essential and crucial condition is "Iran's absolute agreement not to possess a nuclear weapon at all and at any time."
Regarding international maritime security, the US president obliged Tehran to immediately open the Strait of Hormuz to ship traffic in both directions without restrictions or imposing any fees.
At the same time, he announced the lifting of the US naval blockade, which he described as "unique and amazing," and confirmed that the stranded ships could now return home.
Trump also addressed the issue of sea mines in the region, noting that advanced American mine-clearing vessels had succeeded in destroying the majority of them.
He called on the Iranian side to immediately end the dismantling and detonation of the remaining mines, which he described as few in number.
Tehran confirms that "there are no negotiations on the nuclear issue at present."
Iran's Foreign Ministry announced on Friday that "no negotiations" are underway regarding its nuclear program, after US President Donald Trump indicated that Tehran would give up enriched uranium under a memorandum of understanding to end the war in the Middle East.
"At this stage, we are focused on ending the war, and there are no negotiations on the nuclear issue," ministry spokesman Esmail Baghaei told state television.
US President Donald Trump announced on Friday the terms and principles of a potential agreement with Tehran to end tensions between the two countries, revealing strict conditions related to the nuclear issue, freedom of navigation in the Strait of Hormuz, as well as sensitive security and military matters.
In a lengthy post published on his official Truth Social account (May 29, 2026), Trump stressed that the essential and crucial condition is "Iran's absolute agreement not to possess a nuclear weapon at all and at any time."
Regarding international maritime security, the US president obliged Tehran to immediately open the Strait of Hormuz to ship traffic in both directions without restrictions or imposing any fees.
At the same time, he announced the lifting of the US naval blockade, which he described as "unique and amazing," and confirmed that the stranded ships could now return home.
Trump also addressed the issue of sea mines in the region, noting that advanced American mine-clearing vessels had succeeded in destroying the majority of them.
He called on the Iranian side to immediately end the dismantling and detonation of the remaining mines, which he described as few in number.
Iran announces it intercepted a drone near Qeshm Island
Iranian media reported on Friday evening that air defenses had shot down a drone in the skies over Qeshm Island.
The Iranian news agency Mehr reported that the sound of air defenses was heard in the vicinity of Qeshm Island, without disclosing further details about the nature of the threat or the party behind it.
Meanwhile, Tasnim News Agency confirmed that air defense units succeeded in destroying a drone that penetrated the region's airspace, noting that Iranian forces dealt with the aerial target immediately.
It is worth noting that the Iranian Foreign Ministry expressed doubts earlier on Friday regarding US President Donald Trump's announcement of lifting the naval blockade in the Strait of Hormuz.
US President Donald Trump had announced earlier on Friday the lifting of the naval blockade in the Strait of Hormuz, stressing the need to reopen it immediately to international shipping without any transit fees.
Iraq Nears Completion of Government Formation Following Intensive Consultations
"Putting Kurdistan on the world stage": Washington interprets Nechirvan Barzani's diplomacy and signals a test.
An American report highlighted the success of Kurdistan Region President Nechirvan Barzani in transforming Kurdish politics from a "revolutionary" approach to a more modern style of state administration. However, this path faces three main difficult factors within the region itself. The report also considered that the diplomatic window opened by Barzani could achieve tangible gains for the region and the Kurdish people as a whole.
A report by the American " National Interest " Institute, translated by Shafaq News Agency, stated that Nechirvan Barzani's diplomacy has contributed to making the Kurdistan Region more present internationally, more able to communicate with rival capitals, and more useful to partners seeking to reduce escalation in Iraq and Syria. However, it said that "the biggest challenge may not lie in Baghdad, Washington, Ankara, Tehran, Paris, or Damascus."
According to a report by academic Soran Tarkhani, a professor at Hampton University in the United States, three main factors in domestic politics may limit the ability of Kurdish foreign policy to achieve its goals. The first factor is the stalled process of forming the regional government. The second factor relates to perceptions within and outside the region regarding the influence of partisan and familial balances in decision-making. Despite Nechirvan Barzani's success in establishing an approach that prioritizes the interests of the region and its people, his actions remain constrained by a complex domestic political environment and multiple centers of influence. The third factor is related to the fragmentation of the foreign policy apparatus and its lack of a higher level of coordination and the strategic vision necessary to translate Barzani's diplomatic achievements into sustainable institutional gains.
While the American Institute affirmed that the diplomatic opportunity opened by Nechirvan Barzani could achieve tangible gains for the region and the Kurdish people, it believed that this opportunity could fade away if the Kurdish political parties in Iraq were unable to reach a settlement among themselves and find a way to support the flourishing of institutions in Erbil.
Establishing a new reality
The report stated that the Kurds have always feared losing what they gained through great sacrifices quickly at the negotiating table, adding that these fears are not just a slogan, but reflect a reality that generations have lived through because of alliances that are abandoned, deals that are made over the heads of the Kurds, and moments when military or field gains failed to turn into sustainable guarantees, noting that these fears have left deep effects on Kurdish politics.
According to the American report, memories of past experiences returned strongly after the failure of the 2017 independence referendum, which expressed a genuine national aspiration, but left the region diplomatically exposed, which sparked a confrontation with Baghdad that ended in losses "on the ground" and politically, while Masoud Barzani stepped down from the presidency of the region, and the position remained vacant until his nephew, Nechirvan Barzani, took over in 2019.
He pointed out the importance of reading Nechirvan's presidency in the context of this history, meaning that his arrival was an attempt to turn the page.
He added that his importance is not only related to him being another Kurdish leader active on the international stage, as Kurdish politics has produced prominent negotiators before, such as Jalal Talabani and Masoud Barzani, but Nechirvan is different from them, because since he took over the presidency of the region, after previously serving as head of government, he has tried to change the rules of Kurdish diplomacy itself.
According to the report, this change is evident in the shift from the prestige of the revolution to the institutional work of state administration, preventive negotiation, and from dealing with Baghdad only as an adversary to dealing with it as an inevitable arena in which Kurdish autonomy must be protected from within. It added that Nechirvan Barzani seeks to break free from the mantle of the Kurdish historical experience to affirm that the Kurds are capable of dealing constructively and positively with the world in accordance with the requirements of the times.
He also noted that Nechirvan Barzani may be the most well-known Kurdish leader in foreign capitals today, as he is the grandson of Mustafa Barzani, the founder of the Kurdistan Democratic Party, whose legacy still plays a key role in shaping Kurdish political discourse, and he is also the nephew of Masoud Barzani, the prominent leader who represents the Kurdish nationalist imagination, according to the American report.
Therefore, the report stated that the Barzani family and the Kurdistan Democratic Party are the ones who determine for foreign leaders and diplomats how to interpret the map of power and influence in Erbil.
Prestige policies
However, the National Interest report stressed the need not to distort the old style of Kurdish diplomacy, because it was formed in “non-state” conditions, where Kurdish leaders had no embassies, no army recognized under international law, no seat at the United Nations, and no superpower to sponsor them permanently.
Therefore, under these circumstances, diplomacy relied on personality, biography, family lineage, party loyalty, and revolutionary legitimacy, since the leader who fought and suffered, endured exile and buried his relatives, and carried the national cause, spoke with a moral authority that no official position could easily replace. For this reason, Masoud Barzani remains the most prominent contemporary embodiment of this tradition in the region.
The report continued that Nechirvan Barzani departs from this tradition, but without completely breaking away from it. His diplomatic style is less showy and less focused on the moral drama of Kurdish suffering, and is based on routine communication, balanced language, and reassuring the regional environment, while slowly turning presence into leverage. It added that he does not try to win applause at a single crucial moment, but rather tries to keep the region present in every room where its future is discussed.
Dealing with Baghdad
The report stated that the most obvious indicator of change is Nechirvan Barzani’s language towards Baghdad, recalling that during the 2023 Iraq Forum in Baghdad, he stated that “our strategic depth is Baghdad, and the solutions to our problems are in Baghdad.”
With regard to Kurdish politics, this sentence is of great importance, as it does not deny the central government’s historical role in Arabization policies, the Anfal tragedy, conflicts over disputed territories, economic isolation and budgetary pressures, or violations of federal law. It does not ask the Kurds to forget the state that harmed them, but it rejects the illusion that self-rule can be guaranteed by bypassing the Iraqi state.
The report noted that Nechirvan Barzani’s presidency began after the shock of the independence referendum results, and therefore his diplomacy has always carried the post-referendum mission of repairing communication channels without giving up Kurdish rights.
He said that Nechirvan Barzani’s recent activity in Baghdad must be understood in this context, explaining, for example, that he visited Baghdad at the beginning of May to hold meetings that focused on the formation of the Iraqi government, relations between Erbil and Baghdad, and broader political issues. The immediate question was how to advance the government formation process constructively, but the deeper meaning of his visit was strategic, as salaries, budget transfers, oil, disputed areas, security coordination, and constitutional rights are all issues that pass through the federal arena.
He added that this Kurdish leader can denounce Baghdad from Erbil, but he must be able to negotiate inside Baghdad, noting that the goal of Nechirvan Barzani’s presence in the negotiations is to reduce emotional tension and keep the channels working normally, as he dealt with Baghdad not only as a source of Kurdish problems, but as an arena in which these problems must be managed.
As another example, the US report stated that Nechirvan criticized Baghdad’s punitive language during the 2020 budget crisis, but at the same time stressed that “our choice in this matter is settlement through dialogue,” and that Erbil “will continue to follow the path of dialogue.”
The report explained that this is not a conciliatory language that abandons Kurdish demands, but rather a method to keep the door to negotiation open even when Baghdad deals harshly with the region. This is why its diplomacy has an importance that transcends Kurdish politics, as for Washington and European capitals, the issue is not only about the region gaining recognition or sympathy, but it lies in the extent to which Erbil can remain as a stable federal partner within Iraq, a useful channel around Syria, a counterweight to the escalation of armed factions, and a place where the autonomy of minorities does not collapse into separatist isolation or complete assimilation into the center.
According to the report, Nechirvan Barzani’s diplomacy addresses the broader problem and thus responds to the concerns of key partners in the West and the Middle East, who want to see the regional government making efforts to work constructively with Baghdad.
Rojava lessons
In this regard, the report stated that the Syrian Kurdish issue represents the strongest test of this new diplomacy, because it shows the difference between proactive diplomacy based on positive engagement, and reactive diplomacy based on personal prestige and damage management.
He pointed to the strong pressures exerted on the SDF forces to integrate into the new Syrian transitional government led by Ahmed al-Sharaa, and to reach a ceasefire agreement, which reduced the areas where Kurdish forces were present, and which the French newspaper Le Monde described as ending the dream of Kurdish self-rule in Rojava, even if the agreement included clauses on Kurdish rights, local administration, education, and cultural recognition.
The report continued, saying: “Here is where Nechirvan’s role stands out,” because on January 17, 2026, he received US Special Envoy Tom Barak, and the Presidency of the Region issued a statement in which it stated that Barak’s delegation praised his diplomatic efforts and mediation. Then, on January 22, Nechirvan met with the SDF commander Mazloum Abdi, and the Presidency issued another statement stating that Nechirvan Barzani pressed for maintaining the ceasefire, reducing tensions, resuming talks between the SDF and Damascus, and protecting Kurdish rights within a unified Syria, while Abdi and the regional government thanked him for their efforts to stabilize the situation.
The report went on to say that official data is important not only for its direct content, but also for the way the presidential office linked these back-channel talks to public diplomacy.
He also recalled Nechirvan Barzani’s statements at the Munich Security Conference, where he advised the Syrian Kurdish parties that “they should go to Damascus united… and that they should deal with Damascus as equals, not as guests… and that Damascus is their capital.”
According to the report, these statements provide a clear indication of his diplomatic style, as he was not calling for a symbolic separation from Damascus, but rather urging the Kurdish parties to enter the Syrian political process as stakeholders before others set the terms on their behalf.
In addition, the report mentioned Nechirvan Barzani’s use of a private American channel, through which he made contact with the evangelical leader Franklin Graham, who is linked to the political leadership of US President Donald Trump, and Graham made a direct appeal to Trump regarding the fate of the Syrian Kurds.
He explained that this does not mean that a single phone call was able to determine the political outcome, but the event demonstrates the type of diplomacy practiced by Nechirvan, as he does not rely solely on official protocol, but rather works through interconnected networks that include envoys, senators, religious leaders, and Kurdish military leaders in Western capitals and throughout the region.
In addition, the report noted that Nechirvan was keen to show the public that he maintained ties with US congressmen concerned with Kurdish security issues, recalling that in February 2026, he met with Lindsey Graham and Richard Blumenthal at the Munich Conference, the two senators who introduced the “Kurd Rescue Act.”
The report says that Nechirvan Barzani understands that Washington is not a single solid bloc, and also understands that his media outreach must reflect the diversity of voices in the American capital.
He saw that this “reflects the difference between his diplomacy and the old Kurdish style, where the approach based solely on prestige would have dealt with the Syrian Kurdish file as a matter of honor, or betrayal, or public condemnation, while Nechirvan Barzani dealt with it as a timing crisis, pressure points, and damage control.” He added that he is a Kurdish leader who can speak to a wide range of parties without turning every contact into a test of national purity, and that his role was not “heroic” in the old sense, but rather an operational and practical role, while his language towards neighboring countries carries the same balance, as when he speaks about Iran, he addresses “non-interference” as the policy of the regional government, but he coupled this with mutual reassurance in the hope that Iran “will respect our sovereignty.”
The report noted that "this balance, which consists of reassurance without submission, is the essence of his diplomatic style."
Political restrictions
According to the report, the drone attack last March on Nechirvan Barzani’s residence in Duhok revealed another dimension of his role, as world leaders and the international press did not treat the incident as merely a local incident against a regional politician. In this context, he pointed to statements of condemnation and solidarity from leaders including French President Emmanuel Macron, Antonio Guterres, Sheikh Mohammed bin Zayed, Recep Tayyip Erdogan, and others. He explained that these are merely public statements and not security guarantees, but they show how attacks on Kurdish leaders within the region are gaining importance that goes beyond Erbil and Duhok, which is considered to some extent as an international endorsement of Nechirvan Barzani’s approach.
However, the report said that the real limits of this new diplomatic approach are not seen in world leaders abroad, but rather among local political parties at home, explaining that Nechirvan can open doors in Baghdad, Washington, Ankara, Tehran, Paris, Rome, Abu Dhabi, and Damascus, and can also participate in security conferences, receive envoys, address regional leaders, and keep the regional government present in moments of crisis.
He added that Nechirvan Barzani cannot escape the internal political stagnation that currently grips the region, where the Kurdistan Democratic Party and the Patriotic Union of Kurdistan treat government positions and gains as a struggle for existence and survival, rather than as part of a routine and institutional democratic process.
According to the report, the regional president acknowledged these internal constraints in his own words, as at the recent Munich conference he addressed the political climate in the region, saying that it was "currently in a state of stagnation," and that recent contacts between the two parties were "moving in the right direction."
He added that this recognition reinforces the central political idea of this report, which is that its diplomacy can open external doors, but the Kurdish parties must translate this access into an effective internal political system, noting that without a stable government, the region cannot negotiate effectively with Baghdad, nor present a unified position on salaries, oil, disputed areas, security reform, and relations with neighboring countries.
political repercussions
The report explained that if Nechirvan Barzani’s diplomacy is to become more than just communication channels and personal relationships, it will require a strong institutional foundation, explaining that the region needs to engineer a foreign policy that links the presidency, the cabinet, parliament, party leaders, the Peshmerga, and Kurdish representatives in Baghdad.
Otherwise, every meeting abroad becomes a mere passing event and not a clear strategy, explaining that the region does not suffer from a lack of international attention, but rather from a fragmented approach to policymaking, according to the American "National Interest" report.
With regard to the Kurdistan Democratic Party and the Patriotic Union of Kurdistan, the lesson is that forming a government has now become a foreign policy issue as well. The longer the region remains without a cabinet, the more doubts will arise among external partners about its ability to act. Baghdad will be able to exploit Kurdish divisions more easily, regional powers will be able to manipulate one Kurdish power center against another, armed groups will be able to test the limits of the region’s deterrence capabilities, and international sympathy may turn into frustration.
Regarding Baghdad, the report said that engaging with Nechirvan Barzani provides a practical working channel for federal stability, but Baghdad should not mistake his pragmatism for Kurdish weakness.
He pointed out that establishing a sustainable relationship between Erbil and Baghdad requires constitutional seriousness, security arrangements and coordination, and ceasing to treat Kurdish rights as "concessions".
In order for Nechirvan Barzani to succeed, the American Institute report pointed out the importance of Baghdad empowering him by showing that negotiations with him are yielding tangible results.
With regard to the United States and Europe, the report showed that the lesson is clear: the goal should be to support the President of the Region’s diplomatic efforts without personalizing Kurdish politics. This means that any engagement should be accompanied by institutional-level cooperation to support an effective regional government, unified Peshmerga structures, a credible power-sharing arrangement, and genuine Kurdish involvement in Iraqi federal decision-making.
He added: “External parties must appreciate Nechirvan Barzani’s role in maintaining stability, while acknowledging that the region’s long-term resilience and stability depend on institutional reform, not on the magic of diplomacy alone.”
Regarding Nechirvan Barzani, the report said it is important to note that a diplomatic victory does not necessarily mean making concessions regarding fundamental Kurdish rights, adding that rights only remain alive when they are defended through institutions, alliances, appropriate timing, and credible governance.
The report considered that Nechirvan Barzani’s diplomacy made the Kurdistan Region more present on the international stage, more able to talk to rival capitals, and more useful to partners seeking to reduce escalation in Iraq and Syria. However, the biggest challenge may not be in Baghdad, Washington, Ankara, Tehran, Paris, or Damascus, but may be within Kurdistan itself.
The National Interest Institute report concluded that this diplomacy can give the region a clear vision abroad, but Kurdish political reforms are essential in order to capitalize on these international goodwill and turn it into lasting results. The central question is not whether Nechirvan Barzani has changed Kurdish diplomacy, as he has already done so, but rather whether Kurdish politics can change enough to take advantage of what his diplomacy has made possible.
