The Kurds are an ethnic minority in the Middle East that occupy a region known as Kurdistan. An area that spans parts of Turkey, Syria, Iraq and Iran. Though they were not given a country at the end of WWI, the Kurds have held on to their strong identity and still speak their own language. Caught in the middle of conflicts in both Iraq and Syria, they played an integral role in fighting back ISIS, seeing off 16 assaults on the city of Kirkuk. After several years of economic woes, there are finally some signs that northern Iraq, or Southern Kurdistan for the millions of Kurds that occupy the region, is beginning to recover. More importantly, the poorest Kurds have rebounded significantly. Here are five facts about the Kurdish comeback in Iraq.
5 Facts about the Kurdish Comeback in Iraq
- The U.S. government has provided more than $350 million in aid to Northern Iraq as a part of the Genocide Recovery and Persecution Response initiative. Approximately $90 million of the aid is going directly to the most immediate needs and improving access to basic services, job access, small businesses and infrastructure.
- The poverty rate fell to 5.5 percent in 2019. The most encouraging figure about the Kurdish comeback in Iraq might be the poverty rate. Iraq suffered a recession between 2014 and 2016 with Iraq’s GDP falling to 2.7 percent. Unemployment had risen to 25 percent by the end of 2014. The cause was falling oil prices and the height of the conflict with ISIS. Oil revenue makes up half of the country’s GDP and 90 percent of the government’s revenue. Adding to the economic strain, leaders were forced to cut new investments. Foreign oil companies like Russia’s Lukoil, Royal Dutch Shell and Italy’s ENI also withdrew investments. They saw Iran as a safer economic option than northern Iraq. All of this culminated in a 12.5 percent unemployment rate by 2016.
- Kurdish interests were well represented in the 2018 election in Iraq. Overall voter participation was down, but the Kurdish voice was heard. They helped elect new Prime Minister Abdul Mahdi. The prime minister reciprocated by restoring budgetary support to the region, amounting to around 12 percent of the central government’s budget. Regular federal reserve installments of $270 million per month helped stabilize the KRG oil sector.
- Oil production has rebounded, reaching 400,000 bl/d in January of 2019. Of course, there
is always concern over the long term effects on climate change; however, over the short term, oil production has coincided with the low poverty rate. The U.S. played a role by brokering a deal that helped to restart production in the Kirkuk oil fields. Exports of petroleum to Europe may begin by 2022.
- Local investment increased while foreign investment decreased. According to local businessman Abdulla Gardi, this is typical during times of relative stability. Total investment increased to $3.67 billion in 2018 from 48 licensed investors. This is up from just $712 million in 2017. Most of the investment in 2018 was made by local investors who hope the KRG cabinet will prioritize a variety of different sectors. Local businessmen believe that, in turn, they can help the local Kurdish region become more prosperous.
There are many factors that lead to the Kurdish comeback in Iraq. Firstly, the end of the conflict with ISIS provided much needed yet tentative stability in the region. As a result, local investors felt more emboldened to invest in the oil industry. Politically, the election of Prime Minister Abdul-Mahdi was a major win for the Kurdish economy and provided additional support to the oil industry to restart stalling production. Furthermore, U.S. aid is helping to improve lives for lower-income Kurds. More than $90 million of that aid is going to immediate needs including but not limited to shelter, healthcare services, food rations and provisions of water. There are reasons to be optimistic about the future in Kurdish Iraq.
– Caleb Carr
Photo: Wikimedia Commons