"My prediction is that given the makeup of the government that I see coming together in Baghdad, and the necessity — not need, necessity — of coming to some mutually acceptable modus vivendi between Baghdad and the Kurds, I think a resolution of outstanding issues is going to happen," Al-Rahim said. "Over the next year or two — it won’t be immediate — we are going to see a resolution to all these outstanding issues."
"I don’t think it’s going to be a grand package because each of these issues is quite big on its own," Al-Rahim said. "If you take the oil issue, part of problem is that we don’t have the necessary oil laws. There are three oil laws that are supposed to be passed by parliament and go into effect and those will go a certain way to resolving the oil issue between Baghdad and Kurdistan. So, that’s a big issue and it’s going to take a while. But there is no reason why the Peshmerga question cannot be resolved in the meantime."
Al-Rahim explained that instead of one grand package solution, she sees existing knots, such as the status of the Peshmerga forces, being unraveled gradually either separately or together with other issues.
Al-Rahim said Iraq’s prime minister-designate and speaker of parliament are very good interlocutors with the Kurds, and are inclined to talk as opposed to hard liners who are not.
"The prime minister-designate is very friendly with the Kurds, he’s known the Kurds for many, many decades and worked with them closely. There is mutual respect. And the speaker is also inclined to negotiate and to come to some settlement."
New Iraqi President Barham Salih, who served as prime minister of Iraqi Kurdistan in 2009-2012, was elected by the country's parliament earlier in October. Parliament was formed after the May 12 general election.
"Salih was not their choice and they did not vote for him for president. The president, of course, represents all of Iraq, but he is not liked in Erbil, by the parties in Erbil. So, that is going to contribute more tension to the situation," Al-Rahim said.
Relations between the Iraq’s federal authorities and the autonomous region of Iraqi Kurdistan deteriorated sharply after the Kurdish independence referendum that was held last September.
The referendum was proclaimed illegal by Baghdad and the authorities imposed sanctions on the Kurdish regional government; restricted banking operations, closed border crossings and banned international flights to and from the region. Baghdad also launched a military operation in the territories disputed between Erbil and Baghdad, starting with the Kurdish-controlled, oil-rich province of Kirkuk.