Kurds fly their flag at the Citadel fortress in the old center of Irbil, the capital of Iraq's autonomous Kurdish region, in an effort to show their independence.


IRBIL, Iraq - At an elite private school in Iraq's autonomous Kurdish region, children learn Turkish and English before Arabic. University students dream of jobs in Europe, not Baghdad. And a local entrepreneur says he doesn't like doing business elsewhere because areas outside Kurdish control are too unstable.

In the decade since U.S.-led forces invaded Iraq, Kurds have trained their sights toward Turkey and the West, at the expense of ties with the still largely dysfunctional rest of the country.

Aided by an oil-fueled economic boom, Kurds have consolidated their autonomy, increased their leverage against the central government in Baghdad and are pursuing an independent foreign policy often at odds with that of Iraq.

Kurdish leaders say they want to remain part of Iraq for now, but increasingly acrimonious disputes with Baghdad over oil and territory might just push them toward separation.

"This is not a holy marriage that has to remain together," Falah Bakir, the top foreign policy official in the Kurdistan Regional Government, said of the Kurdish region's link to Iraq.

A direct oil export pipeline to Turkey, which officials here say could be built by next year, would lay the economic base for independence. For now, the Kurds can't survive without Baghdad; their region is eligible for 17 percent of the national budget of more than $100 billion, overwhelmingly funded by oil exports controlled by the central government.

Since the war, the Kurds mostly benefited from being part of Iraq. At U.S. prodding, majority Shiites made major concessions in the 2005 constitution, recognizing Kurdish autonomy and allowing the Kurds to keep their own security force when other militias were dismantled. Shiites also accepted a Kurd as president of predominantly Arab Iraq.

Still, for younger Kurds, who never experienced direct rule by Baghdad, cutting ties cannot come soon enough.

More than half the region's 5.3 million people were born after 1991, when a Western-enforced no-fly zone made Kurdish self-rule possible for the first time by shielding the region against Saddam Hussein. In the preceding years, Saddam's forces had destroyed most Kurdish villages, killing tens of thousands and displacing many more.

Students at Irbil's private Cihan University say they feel Kurdish, not Iraqi, and that Iraq's widespread corruption, sectarian violence and political deadlock are holding their region back.

"I want to see an independent Kurdistan, and I don't want to be part of Iraq," said Bilend Azad, 20, an architectural engineering student walking with a group of friends along the landscaped campus. "Kurdistan is better than other parts of Iraq. If we stay with them, we will be bad like them, and we won't be free."

Kurds are among the main beneficiaries of the March 20, 2003, U.S.-led invasion that ousted Saddam, and sympathy for America still runs strong here.

Rebaz Zedbagi, a partner in the Senk Group, a road construction and real estate investment company with an annual turnover of $100 million, said his success would have been unthinkable without the war.

The 28-year-old said he won't do business in the rest of Iraq, citing bureaucracy and frequent attacks by insurgents, but said opportunities in the relatively stable Kurdish region are boundless.

"I believe Kurdistan is like a baby tiger," said Zedbagi, sipping a latte in a Western-style espresso bar in the Family Mall, Irbil's largest shopping center. "I believe it will be very powerful in the Middle East."

The Kurdish region has undergone a dramatic transformation in the past decade.

Its capital, Irbil, once had the ambience of a large village. It has grown into a city of 1.3 million people, with the beginnings of a skyline, several five-star hotels and construction cranes dotting the horizon.

The SUV-driving elites have moved into town houses in new communities with grand names like "The English Village." Irbil's shiny glass-and-steel airport puts Baghdad's to shame.

The number of cars registered in the province of Irbil - one of three in the Kurdish region - jumped from 4,000 in 2003 to half a million today and the number of hotels from a handful to 234, said provincial governor Nawzad Mawlood.

Planning Minister Ali Sindi took pride in a sharp drop in illiteracy, poverty and unemployment in recent years.

But the Kurds have a lot more work cut out for them. The region needs to spend more than $30 billion on highways, schools and other basic infrastructure in the next decade, Sindi said. A housing shortage and a high annual population growth rate of almost 4 percent have created demand for 70,000 new apartments a year.

There's also a strong undercurrent of discontent, amid concerns about the concentration of power in the hands of a few. Opposition activists complain of official corruption, and the international group Human Rights Watch said security forces arbitrarily detained 50 journalists, activists and opposition figures in 2012.

Iraq's central government strongly opposes the Kurds' quest for full-blown independence.

Iraqi leaders bristle at Kurdish efforts to forge an independent foreign policy, and the two sides disagree over control of disputed areas along their shared internal border. In November, Kurdish fighters and the Iraqi army were engaged in a military standoff, and tensions remain high.