Institute for War and Peace Reporting | Giving Voice, Driving Change

Mixed Fortunes for Kurdistan

Kurds enjoying post-Saddam economic boom, but have seen few political changes.
By Sirwan Gharib

Farouq Mustafa, a Kurdish businessman who built Asia Cell, Iraq's first-ever mobile telephone network, has experienced both the expanded business opportunities and the political failures of the post-Saddam era.

Based in Sulaimaniyah, the "capital" of eastern Kurdistan governed by the Patriotic Union of Kurdistan, PUK, Asia Cell was recently awarded the mobile telephone contract for northern Iraq.

Since then, the firm has been expanding mobile telephone services to the "newly liberated" areas that include the cities of Kirkuk, Mosul, Tikrit and Samarra.

Mustafa’s contract also includes the areas ruled by the PUK’s rivals, the Kurdistan Democratic Party, KDP, which operates in the western half of the Kurdish area.

But the KDP has so far refused to give Mustafa permission to provide the mobile telephone service in their area, despite his contract.

Another company, which has been running a mobile phone service there for several years, refuses to give way to Asia Cell.

"They have not allowed us to operate there yet," Mustafa said wryly from his office in a glitzy new four-story building in central Sulaimaniyah.

Mustafa’s experience underlines a continuing problem many Kurds expected would end with the fall of Saddam’s Baathist regime.

Specifically, Kurds thought the rival KDP and PUK would finally make good on their rhetoric and unite their administrations.

The KDP is led by Masu'd Barzani, the current president of the Iraq Governing Council, while the PUK is led by Talal Talabani, another GC member, who recently served as council president.

In 1992, the Kurdish people elected a government in the first free Iraqi elections, but it split in a violent civil war during the mid-1990s.

The two parties have held to a type of cold peace since 1998 when they signed the US-brokered Washington Agreement.

The agreement stipulated that the two administrations reunite, and the joint parliament has been operating since October 2002.

But the two administrations remain divided despite the united front they adopt when addressing the role of the Kurds within larger Iraqi issues.

Despite the political stalemate between the two groups, however, the economy is booming in Kurdistan, particularly in Sulaimaniyah and the PUK area.

According to Barham Salih, the region’s prime minister, that’s because the administration has made a concerted effort to "energise the private sector".

Kurdistan emerged from the war largely unscathed and was already more prosperous than they rest of Iraq because of less corrupt governance and more effective local implementation of the UN's oil-for-food programme.

Still, following the war "the economy needed a stimulus package", Salih said.

So when the Coalition Provisional Authority, CPA, began funnelling money left over from the UN’s Oil-for-Food Programme into local Iraqi governments, Salih says he “pushed the money back into the economy quickly".

Over the past year, more than 50 new factories have been built in the Sulaimaniyah area alone.

At the same time, dozens of large new commercial buildings have been constructed by private investors, enticed by low taxes and cheap land prices offered in return for speedy development.

Millions of US dollars in public works contracts also have been issued.

By October 2003, Sulaimaniyah even had to begin importing labour from cities outside the "green line" that demarcates the Kurdish-run areas of Iraq.

Housing was shifted from the public sector to the private with easily obtained no- and low-interest loans and other incentives, which also resulted in the construction of thousands of new homes.

"We used the CPA money well," Salih said, smiling.

On the national political front, Kurds were successful in securing a provision in the Iraqi Transitional Administrative Law, often called the interim constitution.

Under terms of the law, a federal region can be formed by any three governorates, and any three governorates can also exercise a veto over acceptance of a permanent constitution.

Both of those features of the interim constitution are seen as insurance for the Kurds against any return to the kind of central government oppression they have suffered in the past.

But other hoped-for political gains have been slower in coming.

Most expected that the ethnically-cleansed parts of Kurdistan that run just south of the green line – including the oil city Kirkuk – would be reunited with the Kurdistan region after the war.

But the CPA has staunchly resisted that reunification.

In particular, the CPA has refused to reinstate the old governorate boundaries altered by Saddam in the 1980s aimed at separating oil-rich Kirkuk from the rest of Kurdistan.

However, social relations have been revived between the people inside the green line and those outside.

Many Kurdish businessmen quickly set up new stores and services in Baghdad, Kirkuk and other cities after the fall of the regime.

Many internally displaced people also have been able to go home.

Up to 200,000 Kurds and Turkoman had been expelled from the Kirkuk area in the 1990s alone, although the ethnic cleansing began in the 1960. Many families have been separated for years.

Before the war, travel between government-held areas and the Kurdish self-rule region was fraught with checkpoints manned by Iraqi security.

"They did not discriminate between men, women and children who they humiliated and battered,” said Hamid Khoshnaw, 30, who has been driving between Kirkuk and Sulaymaniyah for the past eight years.

Although checkpoints still exist, they are staffed by Kurds and movement between the two areas is now nearly effortless.

"Now, the checkpoints are very respectful," Khoshnaw said. "In return, we feel very responsible and help them."

Jihad Sharif, 40, agreed, "The biggest gift the US gave me was enabling me to go back to my family."

Sharif was forced to flee Kirkuk for the Kurdish self-rule area after he was accused of putting a bomb in the security directorate of the ruling Baath party, a typical government accusation used to expel people at the time.

"Before liberation, I could not go back," he said. "My family was constantly under the surveillance of the Baathist regime's [security] apparatuses."

But those days are gone. And while the Kurds have not experienced the kinds of political change they would like to see, they still consider themselves lucky when looking at the turmoil in the central and southern Iraq.

Sirwan Gharib is the Kirkuk correspondent for Hawlati newspaper in Sulaimaniyah.

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