Refugees Daily - Internal Global Press Review

The most important and effective fighting partner in the global coalition against Islamic State is facing economic collapse. Through no fault of its own, the Kurdish Regional Government (KRG) is unable to pay the salaries of its employees, including the famed Peshmerga fighting force.

The Peshmerga, who are holding the front line in the global effort to defeat Islamic State, have now gone without paychecks for three months. According to Bayan Sami Abdul Rahman, the KRG representative to the U.S., the Kurdish "economic situation is grim."

Much of the blame lies with the Iraqi central government in Baghdad. For the past few years, that government has refused to pay the KRG the requisite negotiated 17% of Iraq annual oil income, a pact enshrined in the Iraqi Constitution. Only some $2 billion of the $12 billion a year owed by Baghdad has been released to the regional government in 2015.

The U.S. and its coalition partners also bear some responsibility, since the Baghdad government's refusal to honor its obligations to the KRG is no secret. International pressure on Baghdad should have been brought to bear long ago.

The problem becomes more urgent every day because Islamic State now controls 30% of Iraq. The Peshmerga maintain a 700-mile front against the Islamic jihadists and in mid-November liberated the Islamic State-held city of Sinjar in an operation that was expected to take weeks but instead was accomplished in two days. Thousands of Islamic State fighters have been killed by the Peshmerga, in coordination with U.S. and coalition airstrikes and targeted U.S. Special Forces operations.

What's more, the Peshmerga are fighting and beating Islamic State even while they are vastly outgunned. Although promises of upgrades are being made, the Kurds typically fight with 40-year-old Kalashnikovs and standard-grade civilian trucks, while Islamic State is using the thousands of U.S.-supplied modern armored Humvees, tanks and howitzers looted from Iraqi military barracks they have overrun.

The battle against Islamic State isn't the only drain on KRG coffers. An estimated 1.8 million refugees – mainly from other parts of Iraq and Syria – have fled for their lives into the Kurdish region since Islamic State swept into Iraq in 2014. The United Nations and various nongovernmental organizations have assisted the KRG in this refugee crisis, but the majority of the burden has fallen on the Kurds.

In reports this year on the impact on Iraq of the Syrian civil war and Islamic State, the World Bank predicted that the KRG would have a funding shortfall of at least $1.5 billion in 2015. The World Bank has warned that the KRG is desperately in need of a $2.4 billion bridge loan to remain afloat.

The Kurds aren't asking for a handout. In a last-ditch effort to fund itself, the KRG has stopped sending its own oil through Baghdad and has been exporting the oil via a new pipeline through Turkey. But as the price of oil falls, the KRG is falling further behind in its struggle to fund its operations, including the Peshmerga, and to help feed, house, educate and police the continuing influx of refugees.

Because the KRG is a nonsovereign entity and not an independent government, organizations such as the European Central Bank, International Monetary Fund and World Bank aren't options for financing a long-term, low-interest loan. So U.S. leadership is needed to prioritize and organize emergency financial assistance to the Kurdish region to keep the Peshmerga on the battlefield.

"We have been briefing our allies and they are up-to-date on our need for financial assistance of some sort," says Ms. Rahman, the KRG representative.

If it leads the fundraising effort to support the KRG, the U.S. wouldn't need to be the source of the funds. Gulf countries such as Saudi Arabia or the United Arab Emirates could lend the money. The Saudis may even welcome an opportunity to very publicly ride to the financial rescue of the Iraqi Kurds, given the international criticism they have received over the documented financial support of Islamic State and al Qaeda by some Saudi citizens.

The Kurds proved themselves able U.S. partners in the 1990 and 2003 Iraq wars. The world-wide value of their contribution today is incalculable but certainly worth a loan: Every day that the Kurds take the fight to Islamic State on its home turf, they weaken the jihadists' ability to strike abroad.

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Ms. Glover, a corporate consultant, served on the senior staffs of former Attorney General John Ashcroft, Vice President Dick Cheney and New York Mayor Rudy Giuliani.