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Erbil—Last April, a few days before Iraqi Kurds voted in elections for the Iraqi parliament—and two months before militants with the Islamic State (ISIS) would threaten their borders, changing everything—a group of Kurdish veterans gathered at the Monument of Halabja Martyrs, a squat rotunda in the spring-green fields of northern Iraq, crowned by a cage-like pillar meant to look like clasped hands. They called themselves the “Living Martyrs,” and together they tallied their war wounds. Ad Policy

One man lost a leg fighting Saddam Hussein’s troops in the 1980s, during the long Iran-Iraq War. Another lost both legs in the same war; he swung himself slowly on his fists toward the monument’s door. Another was shot alongside US troops in the American invasion of 2003, which he called a “liberation.”

The group’s leader would only say that he had “fought in the time of Saddam,” a vague description that I came to learn meant during the Kurdish civil war, a brutal fight in the mid-1990s between the two major Kurdish political parties—the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK)—which most Kurds don’t like to talk about. Each “living martyr” had pinned to the army drab of their fresh-pressed peshmerga uniforms the red and yellow insignia of the ruling KDP, the party of KRG (Kurdistan Regional Government) president Massoud Barzani. They were there to get the party votes.

Halabja, about eight miles from the Iranian border, is a poor area, remote and conservative, surviving in isolation, having once barely survived at all. In 1988, the Iraqi air force dropped chemical weapons on the city in retaliation for Kurdish rebellions against the state. Thousands of people died in one day, and gruesome images from the attacks are on display at the museum attached to the Halabja monument. In one life-size panorama, a truck laden with slumped bodies tries to escape across town lines. In another, a father dies shielding his young son from the gas. Nearby, behind glass, are the documents sentencing Saddam to death.

Halabja is at the heart of Kurdish nation-building, and the monument and nearby cemetery routinely attract Kurdish officials looking to evoke Kurdish resilience. After 2003, American officials, though they were slow to criticize Saddam for the 1988 attack when it happened, did the same. Halabja was evidence of Saddam’s brutality, and could help prove to a skeptical American public that, at least in part of Iraq, the US war was a good one. “I can’t tell you that Saddam Hussein was a murderous tyrant—you know that,” Colin Powell said, visiting the site in 2003. “What I can tell you is that what happened here in 1988 is never going to happen again.”

Over the past decade, against the backdrop of rapid economic growth, Halabja has solidified its role as a symbol not only of suffering, but of rebirth. In news articles and political speeches, mention of the 1988 attacks tends to precede that of a new shopping mall or hotel in Kurdistan’s capital city, Erbil. The juxtaposition—past horror, present wealth—is shorthand for Kurdistan’s progress and the unbridled optimism about a future nation that New York Times columnist Thomas Friedman (and more than one Kurdish official) has referred to as an “island of decency.”

When ISIS threatened Kurdish borders, Iraqi Kurdistan became more than just the “success story” of the 2003 Iraq War. Kurds emerged as the best hope for the region against ISIS. The United States, pushing for a unified Iraq, had refused the peshmerga the same support it gave the Iraqi Army after 2003, but as Kurdish fighters filled the vacuum left by a disintegrating Iraqi Army, they were declared Iraq’s most formidable armed force. The region accepted droves of refugees; reporters churned out breathless reports about secularism and democracy; and President Barzani went on CNN and all but declared Kurdish independence. “After the recent events in Iraq, it has been proved that the Kurdish people should seize the opportunity now,” he said.

But many Kurds have related to the Kurdish success story the way a struggling family in Mississippi might view the American dream—reflecting, not relieving, inequality, and entirely out of reach. They are angered by the nepotism and corruption they see in their government, and worry that family connections and internal divisions trump real democracy. When whole villages are on the losing end of land disputes with Big Oil, villagers wonder who profits from Kurdistan’s oil wealth. Until ISIS, their grievances were rarely, but increasingly, heard.

Adding to that worry is the strain of nearly a year of war. In the previous two decades, Kurdistan had made progress, some of it remarkable and most of it unprecedented. Some of that progress was measured by growing pushback against the idea of Kurdistan as an “island of decency,” favoring a more realistic portrait of a burgeoning democracy with much promise but much to overcome. All Kurds may long for an independent country, but many of them didn’t like the form that country was taking. Their voices, too, were growing louder, until the war.

No place in Iraqi Kurdistan better encapsulates these contradictions and anxieties than Halabja. The “city of peace” is synonymous with Kurdish statehood; Saddam’s attacks of 1988 helped to justify a no-fly zone after the 1991 Gulf War that would pave the way for Kurdistan today. It is also the center of dissent against the KRG. Just as 1988 was a turning point for Halabja, so was 2006, when a group of protesters, in an attempt to block politicians from reaching the Martyrs Monument, burned it down.

* * *

There’s no escaping the peshmerga. At refugee camps they hand out toothbrushes in bags that read “The Gift of the Kurdish Peshmerga for our Lovely Children.” Pop songs call bourgeois Kurds to arms. Images of dead peshmerga decorate the streets of Kirkuk city, a disputed territory claimed by both Baghdad and the KRG. Soldiers man checkpoints ringing the city or patrol Erbil’s streets. They are invoked at school awards ceremonies and welcomed as VIPs at Erbil hospitals. “The peshmerga are our top priority,” KRG Foreign Minister Falah Mustafa Bakir told me when I met him in his office in December. “We have to remain mindful of the fact that whatever we do for the peshmerga, it is too little compared to the sacrifices they have made.”

Kurdish singer Aras Koyi expertly channels peshmerga fever in his nationalistic ballad, “My Kurdistan.” Koyi grew up outside of Kurdistan, the son of exiled peshmerga fighters, and, like many diaspora Kurds, he struggled to stay connected to his home. In his 30s, he is emotional about statehood, prone to showing up at public events in a suit sewn from a map of the world, with Kurdistan—including Kurdish parts of Iraq, Iran, Turkey and Syria—pinned over his heart. The suit is a magnet for Kurds with camera phones.

Both Barzani and Jalal Talabani—the leader of the PUK and, until 2014, the president of Iraq—were once in the peshmerga, and their military heroism is key to their popularity, even later in life. Decades after its leaders laid down their weapons and shifted focus to economic development, the legacy of military involvement bolsters their authority. Keeping Kurdistan safe (incidentally, a slogan of Koyi’s) is paramount, and could be used to justify, for example, Barzani’s extended presidency or the unequal participation in government of Barzani and Talabani family members. War heroes, or descendants of war heroes, simply made better leaders. ISIS gave more substance to that perception. But it was unclear whether the peshmerga could live up to their reputation.

Koyi took me to Makhmour, a city an hour west of Erbil where peshmerga, with the help of the Kurdistan Worker’s Party (or, PKK, the Kurdish guerrilla army that for decades fought the Turkish state and is designated a terrorist organization by Turkey, the EU and the United States), had recently vanquished ISIS. We met the fighters in a tidy rented house a short drive from the front line. They clamored for photos with Koyi, a one-man USO, next to tanks and mounted machine guns. The day before, peshmerga had brought home the bodies of six ISIS fighters in the back of a pickup. “We dump them into the field out back,” a soldier told me. “The villagers usually come by and bury them.”

Makhmour was quiet. The municipal building that had been ISIS headquarters was back to normal. A grain silo where ISIS had positioned snipers and draped their black flag was now decorated with a colorful Kurdish one. Across the street from the silo, the walls of a large restaurant were scarred by a car bomb, the panoramic windows shattered and replaced. Militants had eaten all the food, the owner told me, and left behind drugs. “Adderall-type tablets,” he said, shrugging. They made them want to fight, he supposed.

Makhmour wore its scars triumphantly, but in the town there was evidence of the rifts among Kurdish forces. Peshmerga struggle to overcome divisions along party lines, remnants largely of the civil war of the 1990s. And, although official discourse had trumpeted coordination among all Kurdish forces, grievances between the peshmerga and the PKK were manifest in the wake of the battle. The PKK has its military bases in the Qandil mountains, on the Iraqi border with Turkey, but an alliance between the KDP and the Turkish government has complicated the relationship between Turkish and Iraqi Kurds. Unity between the two factions, then and now, is challenged on the ground in Makhmour.

Built in the 1990s for Kurds fleeing Turkey, the Makhmour refugee camp, just a moment’s drive from the peshmerga outpost, is a PKK stronghold. When I first visited the camp in 2012, residents were skeptical of the promise of Iraqi Kurdistan, which they felt excluded them. The KRG offers the Turkish Kurds refuge, but keeps them within the remote camp’s walls, and the region’s capitalist drive clashes with the PKK’s Marxist foundations. Moreover, Barzani’s partnership with Turkey, whose government expelled the PKK, offends the refugees.

Fighters from the peshmerga and the PKK offer conflicting reports of the battle for Makhmour. “The PKK are just making propaganda,” a peshmerga commander in Mosul told me. A PKK spokesperson, meanwhile, suggested that instead of sending peshmerga to the fight, the KRG should just give the PKK their weapons. The refugees in Makhmour camp were newly proud of the PKK for their role in the fight against ISIS—sales of PKK uniforms, bought mostly as celebratory costumes, were at a high, a tailor told me—but that pride seemed to reinforce their distance from Iraqi Kurdistan.

But it is the divisions among the peshmerga themselves that truly plague Iraqi Kurds. For four years during the civil war of the 1990s, the KDP-controlled west battled with the PUK-controlled east, pitting families against each other and leaving thousands dead. The war’s legacy still undermines Kurdish solidarity; only a fraction of active peshmerga are registered with the KRG’s Ministry of Peshmerga Affairs, established to unite the forces. A cocktail of Kurdish forces liberated Mount Sinjar from ISIS in December, but it was Barzani who stood proudly on the mountaintop, declaring victory. The sight of the KDP leader was “salt on the wounds” for the fighters who do not support him, I was told by a reporter who witnessed the event.

While Kurdish parties benefited from having loyal armed forces, progress toward unification was slow. Some Kurds believe that it’s these divisions in the Kurdish forces that incline Washington against sending heavy arms to the peshmerga. “America wants to help us,” a senior Kurdish official told me. “But in the back of their minds they are thinking, will the weapons they provide end up being tools of civil war?”

In Makhmour, Koyi and I sat with Najat Ali Saleh, the peshmerga commander who led the defeat of ISIS. He was exhausted, and Koyi was quiet for the first time that day, sitting upright like an eager student. “It’s been a good three days,” Saleh said, describing recent peshmerga victories. US airstrikes drove ISIS into towns, he said, making it easier to find them. To avoid the airstrikes, ISIS militants had to nudge their machine guns out of apartment windows, giving away their positions. Still, he downplayed America’s role. “We want to be self-reliant,” he said.

Saleh, a successful commander, is accustomed to recounting his battles to supervisors and the media. But, like many of his troops, he’s not a career peshmerga. In spite of Barzani’s evocation of the KDP’s peshmerga roots, and the fact that many peshmerga are on the government payroll, not many Kurdish men of fighting age have actually spent their lives fighting. The potential for Iraqi Kurdistan had seemed to surpass glory during war, for a time.

Saleh was eager to recall a day when he had been contributing to the Kurdish future in a different way, as though he worried about Kurdistan’s full identity being lost in reports of war. “I have a master’s degree, you know,” he said, half asleep, “in the relationship between democracy and national security.”

* * *

ISIS thrust Iraqi Kurdistan into the spotlight, and Kurds, who have long felt ignored, welcomed the attention. “We are showing the international community that as a people we have the same principles and values as the civilized world,” Bakir, the foreign minister, told me. “We still remember when we were trying to communicate with the outside world, to conduct meetings. Either those meetings were rejected, or we would see some junior officials, and not at their official headquarters. Times have changed.”

But the fight that made Kurdistan more prominent threatens the very characteristics that Westerners claim to admire. Already, KRG citizens are watching as the war with ISIS stifles some hard-fought democratic victories. Displaced Arabs complain of unfair treatment at checkpoints. Patriotism overtakes public debate. With over a million refugees and little outside help, the region is mired in a humanitarian crisis that gets far less attention than the military one.

“Kurdistan is a forward-looking society,” Hiwa Osman, a Kurdish journalist and political analyst, told me during a meeting last September. “Just before this war was a good time, in that sense. We had a strong opposition that turned into a real political power”—a reference to the Gorran, or “Change,” Movement, a relatively new party—“we had an election in which nobody won 99 percent of the vote. We had a strong media. Then, a few days after the war started, we got a statement from the president asking all media to call the peshmerga who get killed fighting ISIS martyrs. That was the beginning.”

Officials on all levels are forced to shift focus. One of them, a Kurdish member of the Iraqi parliament, Beriwan Khailany, splits her time between Baghdad and Erbil. She is optimistic about the Kurdish future, but the war with ISIS has complicated independence, which many politicians campaigned on, and it has exposed some of the region’s shortcomings.

“We think this is a big lesson,” she told me, ticking off infrastructure that now seemed obviously too fragile to support Kurdish independence—with the economy, reliant on oil and Baghdad, being the most obvious. “We need to solve problems with Baghdad and then think about independence,” Khailany said. Meanwhile, she was left to figure out what to say to voters. “We still don’t know what our message is to our people,” she said. “What will be the end of all this?”

One cool December day, I accompanied Khailany to an Erbil hospital, where she planned to visit some wounded peshmerga. It was a new duty that she took on with determination, visiting often and taking along boxes of sweets. At the public hospital, peshmerga were now first priority, but they still lacked basic equipment and medicine, according to the administrator. The war was too costly, he thought. “Before, it was the Syrian refugees. Then the IDPs from Mosul, and now the wounded peshmerga,” he told me. “We are very overcrowded.”

To mitigate his complaints about shortages, the administrator pointed to a large framed portrait of Barzani, just above his head. “If that wasn’t hanging there, we wouldn’t be sitting here speaking Kurdish,” he said. “We would be speaking Arabic.”

For good measure, he emphasized Baghdad’s role in the lack of supplies. Last year, when Baghdad stopped sending the KRG its 17 percent share of the national budget—punishment for illegal oil sales to Turkey—it also stopped sending medicine, he said. With the majority of medical supplies still transiting through the capital, private companies and donors have had to fill in.

The indictment of Baghdad is key to the Kurdish narrative of independence and is often brought up by Kurdish leaders. When Baghdad began withholding the budget, the KRG found that it could no longer pay salaries or make good on contracts with foreign investors. “It’s the politics of suffocation,” KRG spokesperson Safeen Dizayee told me last April. Barzani, though, went further, telling reporters the budget embargo was as bad as the gassing of Halabja—“if not worse,” he said.

These days, the notion of a stand-off with Baghdad contradicts the reality that most Kurdish politicians have come to accept: that the two governments will have to work together, both to fight ISIS and to negotiate the sale of Iraq’s oil. But the nationalist rhetoric, perpetuated for years by the Kurdish media and officials, lives on in citizens like the hospital administrator. When I recounted his claim that Baghdad was withholding medication bound for Kurdistan to a high-level Kurdish official (who spoke on condition of anonymity), the official seemed exasperated. “He has to say that,” he said.

* * *

In 2011, ExxonMobil signed a landmark oil exploration deal with Kurdistan. It infuriated both Baghdad and Washington, but Kurds saw it as a turning point in their quest for autonomy. Fuad Hussein, Barzani’s chief of staff, called the Exxon deal a “big victory.”

The Exxon negotiations, recently detailed for the first time by Reuters, were held in secret, and Kurdish officials have a litany of excuses, some legitimate, for operating behind closed doors. Meanwhile, the Kurdish population is told their future depends on oil, but not exactly how it will be processed or monetized. Partly because of the lack of transparency, expectations do not always reflect the reality.

“Iraq is the northern part of a neighborhood of countries that have very small populations and very large carbon resources,” Brad Camp, an Erbil-based oil analyst, told me. “Everybody has the ability to be wealthy without being productive.” Not so in Kurdistan, where, based on KRG estimates, he says, each Kurdish citizen would average about $9,000-$12,000 per year. “It’s a great foundation,” Camp said. “It will allow for a solid education system…. It’s going to allow for good healthcare…. It allows for people to travel and open their minds, to help them look for new ways to be productive. But, in the end, for Kurdistan to be a wealthy state in terms of dollars in pockets, it has to be a productive state.”

Iraqi Kurdistan is plagued by a patronage system rooted in overt attempts between the two political parties to buy popularity. An estimated 1.4 million Kurds, out of an estimated 5-8 million, are on the government payroll. Adding to that is the reputation among the two major political parties of nepotism and corruption. Many of the most profitable companies, such as those controlling construction projects, are owned by a Barzani or Talabani, and relatives of the two leaders hold high-level government positions. The system may have been accepted, sometimes grudgingly, by an older generation of Kurds, but it alienates a younger generation.

“People don’t even go to work,” Abdulla (a pseudonym), a 26-year-old employee at an international oil company in Erbil, told me. “The government just gives them money to get votes in the elections.” To this recent college graduate working hard at an entry-level job, this system is a knife in his ambition. “The politicians set up businesses so they benefit themselves,” he said. “They do a lot of things that make us ask questions.”

Like many people his age, Abdulla doesn’t support any Kurdish political party. He doesn’t even credit Barzani for enticing oil companies to Kurdistan. It’s not savvy political maneuverings that brought ExxonMobil here, Abdulla thinks. It’s the oil.

“Sometimes you think, with Barzani, what, no other person has done anything good? No one else is smart enough? No one else deserves it?” Abdulla said. “We believe that the US doesn’t want a strong government in the Middle East. They can put a lot of conditions on our weak government. They need oil? Here’s oil. They need weak people? OK, here we are.”

Abdulla is part of a generation with one foot in the future of Kurdistan and one foot in its past. He comes from a traditional family and still lives at home with his mother and sisters. Kurdish society, he says, is too insular; so far, the best outcome of foreign investment is the presence of foreigners in Kurdistan.

Although he praised the region’s economic progress, Abdulla criticized the trappings of wealth that have proliferated around Erbil. “Kurds would like to change their society,” he told me, dropping by the city’s Divan hotel, where I had a meeting. “Development is not malls, fancy buildings, and then when it rains the streets are flooded.”

The Divan’s gilded lobby, a favorite gathering spot of Kurdish politicians and Exxon employees, is routinely put forward as evidence that the Kurdish dream is already a reality. The contrast between the gleaming corridors and the rest of Iraq—the at-war part of Iraq—is an appealing one, and often invoked in descriptions of the region. But it is a distraction, too. I was meeting a Kurdish official who, like Abdulla and so many others, asked to remain anonymous. He criticized the political structure, a biased media and the lavish lounge where we sat talking. “We are not the big players we think we are,” he said with a tight smile. “We are only symbols and symbolism.”

* * *

Omar is only 23, but there are already large portions of his life he wants to keep secret. I can write that he was studying chemistry in Erbil and that he was blocked from graduating, he says, as punishment for belonging to a Kurdish Islamist party based in Halabja, where Omar is from. I can write that, because of this, in 2013 he went to Syria to join the Nusra Front, militant jihadists who were a precursor to (and now enemies of) ISIS, but I cannot say exactly when, or for how long, or why he left.

Omar does insist that I write why he went. “Muslims in Syria were being persecuted by [Syrian President Bashar al-] Assad,” he said, his hands wrapped around a mug of tea. “Western countries wouldn’t do anything for Syrians except talk about them in the media. I thought that if the people there were not Muslim, if they were Christian, then all the countries would go and support them, and stop Assad from killing them.”

We met in an Erbil restaurant specializing in pizza with exotic toppings. Omar refused to eat; it went against his political beliefs, he said. He hates the new Erbil—the wealth and what he considers only a pretense of tolerance. He wore a drab Kurdish suit, his pants ballooning around his legs. “It’s really hard to be a devout Muslim here,” he said. Since he returned from Syria, the Kurdish internal security forces, called asayish, have followed him everywhere.

It’s an old story. In the early 2000s, Ansar al-Islam, a militant Islamist group, had its stronghold near Halabja, and the town remains tainted by the group’s history of extremism. PUK and American forces drove them out in 2003, but opposition still took the form of Islamist parties, even if more moderate in their approach.

Because of their reputation, Halabjans felt ignored. The beautifully paved road that took politicians from monument to cemetery did not run through the town, and visitors easily bypassed it. When the student-led protest burned down the monument in 2006, they listed their demands.

In response to the protest, the KRG paved the road, started construction on a university and improved basic infrastructure. Halabjans also wanted some control over the ceremony marking the attacks, demanding back some of what San Francisco State University scholar Nicole Watts calls their “symbolic capital” from the state. In doing so, they hoped to “reshape both the distribution of resources and the production of historical memory,” she writes in a 2012 essay on the Halabja protests.

In many ways, the protesters achieved what they set out to do: they got the attention of politicians, who then compromised on important demands. But the KRG, which presents itself as secular, has been less tolerant of Halabja’s religious conservatism. Reportedly, a large percentage of Iraqi Kurds who joined jihadist forces in Syria came from Halabja. Locals remember being interrogated and detained during the days of Ansar al-Islam, and they worry that this time it could be worse.

Kurdistan’s anti-terror law allows for extended periods of detention without charges, and officials, concerned about national security, monitor Halabja for people with sympathies for ISIS. Families complain privately that young men from Halabja have been detained indefinitely for suspected ties to extremism. Security officials told one family with a son in detention that he will be released “when things calm down.”

Omar was told that if he returned from Syria and turned himself in, he wouldn’t be prosecuted under the terror law, and so in 2013, he returned home. He was interrogated by PUK security four times in Sulaymaniyah, each time for five hours. His interrogators made him feel helpless. “I went to Syria to help Muslims get their sense of dignity,” he told me. “And now they take away mine.”

When his ordeal was over, Omar returned to his school in Erbil, determined to finish his studies. Almost immediately, he was arrested again, this time by KDP security. Omar tried to explain that he had already gone through interrogation. “I said, I finished everything in Sulaymaniyah! The court released me!”

He spent six months in an Erbil prison on terrorism charges. Omar was angry, but more than that, he was confused. He knew why he was arrested—he defends his actions, but he knows that what he did was illegal—but not why he was imprisoned twice. “If we have two Kurdistans,” he said, “then deport me to my Kurdistan.”

Outside the airy restaurant, Omar was more relaxed. Inside, he felt sure he was being watched, that the teenage waiter was also a spy for the asayish. He felt persecuted for his religious beliefs, and driven to Syria because of that persecution. By the time we met, almost two years after he returned from Syria, he was hardened, convinced by ISIS propaganda. “I don’t believe in moderate Muslims anymore,” he said.

“The Kurdish system exploits the poor and serves the rich,” he said, as we drove past the hotels and malls that have come to define Erbil. Omar grimaced, gesturing out the car window. “This is the fake Erbil,” he said. “What is the real Erbil?” I asked. He laughed. “The villages and towns outside,” he replied. “Everything outside of Erbil is the real Erbil.”

Reporting for this article was supported by a grant from the Pulitzer Center on Crisis Reporting.