SULAIMANIYAH, Iraq, Sept 29, 2018 (BSS/AFP) – The oil-rich Iraqi region of
Kurdistan is struggling to rebuild its economy, a year after an ill-fated
independence referendum that Baghdad deemed illegal.
A massive yes vote in the September 2017 plebiscite provoked a furious
backlash by the central government, turning a long-cherished dream of the
Kurds into an economic nightmare. Federal forces retook oilfields, depriving
the mountainous northern enclave of its economic lifeblood, while Baghdad
also imposed a six-month air blockade.
And in another blow, Iraq’s parliament in March passed a budget that saw
Kurdistan’s slice of the federal cake drop from 17 percent to less than 13
percent.
Outmanoeuvred, Kurdish lawmakers boycotted the vote.
But the Kurds are now gearing up for another poll; an election on Sunday
for the regional parliament.
The local economy — and relations with Baghdad — top the agenda.
Rawa Burhan, 20, intends to vote. He hopes that the new parliament and
future government of Kurdistan “will open a new page in relations with the
Iraqi government”.
Burhan said Kurdish authorities must “negotiate a (new) budget (with the
federal government) in order to end the suffering of the people”.
He said his parents, both state employees, have seen their combined monthly
income of around $1,700 (1,470 euros) drop to $800, due to the economic
hardships that have hit the region.
Saman Qader, who has worked for Kurdistan’s ministry of electricity for 15
years, has seen his paycheck shrink from nearly $500 a month to $300.
The 51-year-old father of four said trying to make it to the end of the
month is a real battle as he struggles to pay his bills, medical costs for
his sick wife and school and university fees for his children.
– ‘Economic catastrophe’ –
“At the onset of 2017, the economic crisis was a catastrophe,” said Adel
Bakawan, director general of the Kurdistan Centre for Sociology at the Soran
University near the Iraqi Kurdish capital of Arbil.
“Civil servants, who represent 60 percent of the active workforce, saw
their salaries halved. For some the salaries dropped by 75 percent,” he said.
This sparked demonstrations while investors “massively pulled back and
thousands of investment projects were shelved”.
Bakawan said the proportion of people living in poverty in Iraqi Kurdistan
rose to 15 percent.
Many analysts and residents blame the economic meltdown on the September
2017 independence referendum.
But even before that controversial vote, Iraqi Kurdistan was suffering
economic hardship.
The region had initially enjoyed an economic boom after the 2003 US-led
invasion of Iraq, as the rest of the country sank into violence.
But the emergence of the Islamic State group in 2014 coupled with tumbling
global oil prices battered the economy.
Since 2014, Iraqi Kurdistan has borrowed more than $4 billion to stay
afloat, according to some experts, and before the doomed referendum it had
chalked up debt of around $12 billion.
– Business slowly returns –
According to official figures, 87 percent of households across Iraqi
Kurdistan — home to around six million people — eke out a living on less
than $850 per month.
And there is an enormous gap between rich and poor, according to Bakawan.
Low-income groups who feel marginalised “have no hope that their condition
will improve by voting for any one party” in the election, he said.
But some entrepreneurs say they see a light at the end of the tunnel, even
if the economy is struggling to diversify.
“This year there were between 400 and 500 new projects launched in the
fields of tourism, construction, services and industry,” said Nawzad Ghafour
at the Sulaimaniyah Chamber of Commerce.
“40,000 jobs will be created within four years,” he added.
But according to a recent UN report, more than 20 percent of unemployed
Iraqi Kurds said they have lost hope of finding a job.