After much anticipation and under threat of retaliation, the people of Iraqi Kurdistan turned out in high numbers to return what appears to be an overwhelming vote in favour of independence from Iraq. Advocates for independence covered a broad spectrum, from those using the vote as a way to negotiate a better future within Iraq to those demanding a new sovereign state.

Although it was never quite clear what the September 25 referendum was intended to achieve, one thing’s for sure: while the Iraqi government, neighbouring states, regional powers and the international community were all against it from the off, the people of Iraqi Kurdistan have voted on self-determination and given a very clear mandate for independence.

It only takes a short stay in Iraqi Kurdistan to conclude that a separation from the rest of Iraq seems inevitable, thanks to both the long-held Kurdish desire for a homeland and the different trajectories that Iraqi Kurdistan and Iraq have followed now for more than a quarter of a century.

Barring diplomatic, economic, or even military action by Iraq or other states, the next step envisioned by Kurdistan’s president, Masoud Barzani, is to enter into negotiations with the Iraqi federal government over Kurdistan’s future status. Since the federal government would have to relinquish its sovereign claim over Kurdistan in order for it to become a state, Kurdistan’s path to independence travels through, and is dependent upon, Baghdad.

But just because separation is inevitable doesn’t mean achieving it will be easy. An independent Kurdistan will present problems for other states with secessionist movements and will immediately confront severe challenges of its own.

Feeling the pinch

The most pressing problem that an independent Kurdistan would face is how to fund itself. Much of Kurdistan’s domestic economy is dependent on Turkey, which has threatened to cut off the flow of goods and stop exporting oil because of the referendum. Iraqi Kurdistan should receive approximately 13-17% of the national Iraqi budget. This funding has been a source of continued dispute, and currently has not been paid since 2014. This sum is vital to Kurdistan maintaining its government and services, and its economy has struggled without it. Advocates for independence make much of the potential financial windfall from oil production, but with oil prices low and political turmoil running high, the Kurdistan market is less and less attractive for international investors.

In fact, since 2014, Kurdistan has been struggling with a long-term financial crisis. The costs of war with the so-called Islamic State (IS), an influx of refugees and a decline in oil revenues have combined to undermine the government’s budget. Since 2015 government salaries have gone unpaid or been cut. These would be onerous problems indeed for a new independent state to confront.

This year’s referendum was a vote for the people of Iraqi Kurdistan as well as four Kurdish controlled regions within Iraq: Kirkuk, Makhmour, Sinjar and Khanaqin. Although these regions are currently controlled from Erbil, they are also claimed by Baghdad.

The perilous state of finances in Kurdistan mean Kirkuk in particular is vital. A multi-ethnic city, Kirkuk sits next to one of the largest oil fields in Iraq, and contestation over who it belongs to has long been a concern. Kurdistan has controlled it since 2014, but the decline of the IS threat in Iraq would allow Baghdad to commit military resources to reclaiming the city and its oil fields.

One issue that any negotiation between Baghdad and Erbil would have to resolve is the status of these oil resources. A peaceful resolution to this land and resource dispute would do much to allow Kurdistan to split from Iraq in an amicable fashion. But looking at a map of north and central Iraq, Kirkuk is only one of many potential flashpoints in the disputed territories that ring the borders of Kurdistan from Mosul to Tuz Khurmatu.

Marching up the hill

Even among Iraqi Kurds, the referendum in Kurdistan was not universally supported. Some parties argued that the timing of the referendum was wrong; others raised concerns that President Barzani was using the referendum to safeguard his own political future. It was not clear until the day of the referendum whether the polls would open in Kirkuk or not.

Further, Kurdistan is not just populated by Kurds – and many (including Iran and Turkey) are concerned for the status and future of Arabs, Turkmen, and other minority groups. Incorporating non-Kurds into a territory so closely associated with Kurdish identity and longstanding calls of Kurdish nationalism will be an obstacle that a Kurdistan outside of Iraq will have to address if it wishes to remain stable.

Beyond that, though, the heightened sense of Kurdish nationalism amongst the Kurds themselves may have been necessary for mobilisation of society behind a yes vote, but it will also have to be carefully navigated by the Kurdistan government. In the run-up to the referendum, Barzani made clear and strong statements that Kurdistan would not stay within Iraq and that it would not be controlled by outside powers. But what happens if the promises of independent statehood cannot be realised?

The negotiations between Erbil and Baghdad carry no guarantees. If they want to avoid crisis, Barzani and his fellow leaders will need to engage in long-term and very careful politics with both Baghdad and Kurdistan’s population – if they’re mobilised and marched to the top of the hill, it could be dangerous to try to march them back down.

As things stand, all involved must confront two difficult facts. First, it is not easy or straightforward to become a new sovereign state and, second, any resolution to the question of Iraqi Kurdistan is still a long way off. The independence referendum has presented an optimistic future, but there are plenty of obstacles in the way.

This article has been updated to note that the funding Iraqi Kurdistan is meant to receive from the Iraqi national budget has not been paid since 2014.