As Iraq edges closer to all-out sectarian civil war, with 400 people killed so far this month, Najmaldin Karim, governor of one of the country's most violent provinces, is pessimistic about the ability of the government in Baghdad to prevent greater turmoil. "This government is incapable," he says. "It likes to live from crisis to crisis, without managing any one of them. You need a psychoanalyst to really tell you what is going on."

A relaxed and confident 63-year-old, Mr Karim has for two years been the highly regarded governor of Kirkuk, the northern oil province, control of which is fiercely disputed by Kurds, Sunni Arabs and government forces. A Kurd born in Kirkuk city, he qualified as a doctor before becoming a peshmerga (guerrilla fighter) in 1973. As defeat engulfed the Kurdish cause two years later, Mr Karim went to the US as doctor to Mulla Mustafa, the ailing Kurdish leader and became a successful neurosurgeon, practising in the suburbs of Washington, where he lived for 35 years.

In his heavily guarded office, Mr Karim looks as if he relishes the challenge posed by the political, economic and military problems facing Kirkuk, but seems fearful of the impact of the mounting crisis in the country as a whole. On 23 April, the Iraqi army broke up a peaceful protest in Hawaijah, in the west of the province, killing at least 44 people. Mr Karim says the army "is in a precarious situation because people in the region really don't want the army here".

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Kirkuk remains a violent place even by Iraqi standards, with frequent car bombs and suicide bombings. Poor relations with the central government in Baghdad means reduced security co-operation with the Iraqi army and security forces, leading to a 30 per cent rise in terrorist attacks.

Dangerous it may be, but Kirkuk is surprisingly full of bustling construction sites, though for years after the Kurds captured it in 2003 the city looked neglected and impoverished. Ever since Mr Karim became governor in 2011 the local economy has begun to take off. The wages of construction workers have risen from the equivalent of $10 to $30 a day. In contrast to the situation in the rest of Iraq outside the Kurdish region, people in Kirkuk get an almost continuous supply of electricity, except for four months of peak demand in summer and winter, when consumers get 14 to 18 hours electricity a day.

"My first priority was to get electricity to people, because they were miserable and it was the hot months of summer," says Mr Karim. Part of the supply comes from the Iraqi grid and the rest from a private firm in Erbil, the capital of the Kurdistan Regional Government. Previously, there had been demonstrations in Kirkuk because of poor electricity supply.

A bizarre aspect of the economic malaise in Iraq is that it often has little to do with a shortage of money. The state's annual oil revenue is $100bn, but provincial governments in cities such as Mosul and Basra vastly underspend their budgets, so money is returned to the central government. Corruption, political divisions and administrative incapacity mean that in Baghdad and other cities there are few new buildings and a permanent shortage of electricity. In Basra, the centre of some of the world's largest oilfields, herds of goats live off piles of uncollected rubbish.

Successful development in Kirkuk, compared with the lowly standards in most of the rest of Iraq, is significant because it shows that violence is as much an excuse as a cause for the country's economic misery. An advantage for Mr Karim is that he is part of the leadership of the Patriotic Union of Kurdistan, the Kurdish party that is dominant in Kirkuk, and Kurds are in the majority in the provincial council. He says that "in this day and age in Iraq, if you don't have some political backing, or at least strong political affiliations, it makes your job a little bit harder".

Unlike many exiles returning to Iraq since the fall of Saddam Hussein, Mr Karim had been active as an ardent and effective lobbyist for Kurdish causes in Washington, so he was not seen as a carpetbagger. He comes from a Kurdish nationalist family. "I never learned formal Kurdish at school. I learned it from reading books and magazines belonging to my father, who was a teacher and later an imam, or prayer leader." His wife, Zozan, is Kurdish and his brother-in-law and nephew were killed by Saddam's forces in 1991. He says: "They were shot by an Iraqi helicopter gunship as they tried to escape on a mountain road near Sulaimaniyah." By returning in 2009, just as the American troops were departing, Mr Karim may also have avoided being seen as an instrument of the US occupation.

He was elected on the Kurdish list to the Iraqi parliament, "but I felt I cannot accomplish much for my city in Baghdad", he says. "You know how dysfunctional the Iraqi parliament is." At the same time, the Kurdish leadership, probably recognising that their neglect of Kirkuk might damage their claim to the city, asked him to stand as governor.

Since the Hawaijah massacre, politics in Kirkuk province – which has a population of 1.35 million, of whom 900,000 live in the city – are changing. Previously, the Sunni Arabs living in this part of Iraq, long disputed between Arabs and Kurds, had been among the last Sunnis to support Prime Minister Nouri al-Maliki's Shia-dominated government. But the mass killing of protesters and threats of more repression have alienated powerful Sunni tribes such as the al-Obaid.

The escalating Sunni insurrection and waves of instability spreading from Baghdad are bad news for Kirkuk. Mr Karim says that "eventually it will affect us here". He does not believe that conciliatory words from Baghdad mean much. He recalls that the last time Mr Maliki came to Kirkuk, in May last year, it was a precursor to much worse relations. The Prime Minister reversed a decision to allow Kirkuk military airport to be rebuilt for civilian use. Mr Karim complains that "a Turkish company that had built and managed Ankara airport for 10 years wanted to do the same thing here".

Hostility between Baghdad and Kirkuk is deeper than ever. After Hawaijah, peshmerga moved into positions around Kirkuk vacated by the Iraqi army, though they have not entered the city itself. The move was denounced by Iraqi army commanders as an opportunistic Kurdish bid to tighten their grip on the oilfields, something strongly denied by Mr Karim.

In any case, his confidence in the ability of the Iraqi security forces to provide security is limited. "You can't control security by using an untrained army," he says. "The army isn't trained for anything. It has become a venue for employment for hundreds of thousands who don't have a job. This is why we have had a lot of deserters in the last few days."

Life may be getting better in Kirkuk, but the failure of government in the rest of Iraq could yet drag it down.