The current struggle to define the basic contours of Iraq’s political system pits those who support a loose federal arrangement against advocates of a return to centralized rule. Increasingly, this struggle is being defined in ethnic terms, with (mainly) Kurds defending the constitutional status quo against concerted efforts on the part of (Arab) Iraqi nationalists to reconfigure the balance of power between the center and the regions. The March 2010 election seems certain to strengthen the latter at the expense of the former. This paper outlines an alternative approach to Iraq’s federalism dilemma. Using the exemplar case of the Åland Islands, it is argued that a strongly centralized Arab Iraq is not inherently incompatible with an autonomous Kurdistan Region, and that by anchoring the Kurds’ autonomous status in international law, a destructive descent towards violent ethnic conflict can be avoided.