Are Kurds Following Other Rentier States?

By Hanar Marouf:

What sort of society are we going to produce by only paving an easy economic development? In light of the new global force, gloabalization, with its far-reaching impact on the future of nation-states, it is important to look at how Kurdistan is affected by taking the easy path in developing its economic situation by focusing only on natural resources.


With the conclusion of two destructive world wars, the end of the cold war, the fall of the Berlin Wall, a rise in neoliberal thinking opened the doors for globalization and the spread of a market economy throughout the world. Globalization is a worldwide phenomenon characterized by increased communications between societies, governments, and companies of different countries. The increased flow of goods, services, and products led to economic globalization, which currently plays a major role worldwide. Globalization led to trillions of dollars moving across borders globally. A market economy means investing, producing, and distributing products depending on supply and demand, with no external regulations on prices within the system.

The KRG (Kurdistan Regional Government) has worked to make the region more open and friendly to the forces of globalization and introduce the region to the world, and consequently the region has become known to the world for its prosperity and business-friendliness. It is noteworthy that, when the Islamic State of Iraq and Syria attacked Mosul, not a single country seemed serious about intervening, nor did they previously seem inclined to do so when they were still in Syria. However, when IS started to become a threat to the Kurdistan region, the whole world, led by the United States, intervened militarily.

After 2003, within a decade the Kurdistan region demonstrated phenomenal development in social, economic, and political spheres. In this paper, I argue that, despite the economic development and the expansion of the regional oil industry, the economic transition from a crisis in the 1990s to a boom in 2000s led Kurdistan into dysfunction and slackness in terms of economic security.

In 2003, with the collapse of the Ba’ath regime, Kurdistan was not greatly affected; however, it benefited from the adoption of a federal system for Iraq in 2005 to become stronger and open new links internationally. While significant changes occurred with respect to the country’s central government – a new regime was formed and various security issued needed to be addressed – the Kurdistan region was forming a new democratic political system and the two major political parties, the KDP and PUK, formed a united political list, whereas in the past they had fought a bloody civil war for several years. Kurdistan was rehabilitated as a safe haven for both refugees and investors.

The KRG successfully attracted foreign investment through a friendly investment law that sought to treat foreign investors as local stockholders in order to spur expansion in the region. Kurdistan became one of the fastest growing regions in terms of economic growth, with around 12% growth in 2012. Kurdistan from 2003 to 2013 could improve its economy and globalize significantly, though still the boom was powered by only one source, oil. Kurdistan needs to develop in other major areas to meet the demands of globalization and continue expanding economically since now the decline in oil prices and the problems with the central government in Baghdad are proofs of governmental mismanagement.

Consequences of the Boom and Decline

A rapid change in economy of any country or region will force it to face some positive and negative aspects. The boom in the economy can lead to an imbalance in development as the government focuses on some specific areas and neglects others. The focus now in Kurdistan is on a rapid profit that can guarantee economic growth. The government has focused on natural resources as the primary resource and source of income for the region. Regional economic growth can provide strength for building Kurdistan’s relations internationally and with the central government, for it to accommodate Kurdish demands, because the regional power is perceived as a strong negotiating partner to the central government. These factors are a must for a region that is surrounded by enemies; however, a region that only depends on its natural resources or a share of budget from the central government will never be able to be independent for one day as it remains dependent on help from others. Consequently, depending on oil has led to neglect of the development of infrastructure, agriculture, trade, banking systems, public transportation, healthcare, and other indispensable sectors. The massive dependence on oil and its shocking and unexpected price decline has caused investments, activities, and projects to stop in the region.


This paper recapped the impact of economic globalization and the free market economy on Kurdistan. It underlined the process of the transition to economic development and various factors driving this process. At the same time, it described the destructive impact of the process on Kurdistan. The KRG appears more focused on the oil industry than on building up a strong and stable economy that takes advantage of everything the region can offer. A stronger infrastructure would provide the basis for a stable and strong economic backbone for the region. Natural resources are not a lifetime guarantee of revenue for any country, if the KRG could focus more on building the infrastructure that would lead to a more independent, stable, and strong economy for the region, plus the region would not face such economic problems as it is witnessing now.

Hanar Marouf is a human rights activist based in Suli and an MA student in Politics and International Relations.

9 Responses to Are Kurds Following Other Rentier States?
  1. Godar
    April 5, 2015 | 11:45

    You highlighted very important point. I would like to add the necessity of having R&D resources as a need for progressing. I hope the leaders think about new plans for KRG…

  2. FFatah
    April 6, 2015 | 07:28

    That’s right, we need only look at the gulf stats they do not all economic dependence on natural resources.

  3. Kuvan Bamarny
    April 6, 2015 | 07:47

    Revenues can be generated from different other economic products than only oil.The production of services industries,mines,manufacturing items,trade ,farming and livestock, can be an alternative for oil, and very profitable sources of income generating for a country.

    If necessary tools of economic growth such as investment ,machinery ,soil,weather are available ,farmers can grow crops such as sweet POMEGRANATE,grapes, almonds, strawberries, oranges ,walnuts, almonds, apricots, dates, figs, kiwi fruit, nectarines, olives, and pistachios, lemons, melons, peaches, plums, and strawberries.

    Vegetable crops such as lettuce and tomatoes, celery, garlic, mushrooms, onions, and peppers can also generate income. rice, corn, sugar beets, and wheat also should be grown in large quantities.Livestock products include milk, beef cattle, eggs, sheep, turkeys,are valuable products .

    Investment on manufacturers items such electrical equipment, medical supplies ,motors, communication equipment,audiotape and videotape, lighting equipment, and telephone equipment,can be very profitable for generating income as well. Moreover,investment and extraction of mined products such as silver,titanium,platinum,copper,sand ,gravel, sodium ,gold, gypsum, magnesium compounds can also generate income for the country.

    Revenues can also be driven from service industries such as personal services ,private health care, entertainment industry, real estate, finance ,insurance ,wholesale ,retail trade ,law firms,engineering companies and repair shops.

    Kuvan Bamarny/Duhok

  4. K.I.M.
    April 7, 2015 | 06:52

    A must-listen-to Kurdish song.

  5. Az Kurdem
    April 7, 2015 | 13:29

    The text below, which you stated in your paper, i 100% agree on that:

    “A stronger infrastructure would provide the basis for a stable and strong economic backbone for the region. Natural resources are not a lifetime guarantee of revenue for any country.”

    The problem in kurdistan is the “secretly” massive corruption. There are billions and billions of dollars missing, which were ment for infrastructure etc. For those in power, it is the right time to use the natural resources (oil) to get rich. They should start thinking in favor of the general population, instead of being selfish thieves, or one day they’ll have a civill war.

    It is now time to invest in your country and make it visible to the whole world. Let them see who the kurds are and that kurdistan is a country desired to be visited by all…

    Invest more market economy…

  6. Halwest
    April 8, 2015 | 00:00

    In terms of dictatorship and corruption, it gets worse everyday but get rid of the ongoing war first. Right time.

  7. Jamal Fuad,PhD, Iraqi Kurdistan
    April 10, 2015 | 03:11

    A very good article and informative comments by the readers. I have always objected to having Kurdistan follow the footsteps of the Gulf. Excluding Oman, the remainder of the gulf can hardly be called states, or countries. They are artificial creations or facilities for cross continent transportation and trade. The gulf states have nothing but gas and petrol. How many people live there? Few Arab tribes who are still live their traditional lives, and hordes of foreign labor imports who carry out the work needed in the oil industry, services in the hotels, and other menial works. Kurdistan has been endowed by mountains and rivers, with a thousand years of history from the days of the Medians, with a population close to 40 million, with vast agricultural endowment and a climate that permits the growth of the needs of its population. Unfortunately, our entrepreneurs look only for quick profits. Development of the infrastructure and agricultural industries require more time, but together they establish a firm economic base which puts the country on the road to continuos development and advance. Such activities creates jobs that our unemployed youth can fill and and does away with the idea of leaving the country to work away from Kurdistan .
    Please do not follow the footsteps of the Gulf, follow the footsteps omGermant, Japan , South Korea all of whom after complete devastation in global wars, within few decades they became world industrial leaders. Then development of other economic sectors open up budget opportunities that can supplement the budget received from oil. The time has come to shift the economy from total dependence on oil to develop other income resources and to use current oil revenue to develop such resources, especially in the agricultural sector. We currently spend billion dollars annually to import food items that can be successfully produced locally, while such billions can remain in the country and employ our youth and in the process develop our Kurdistan . So please stop suggesting to follow the Gulf states, follow the steps of tithe real nations that have established themselves as nations with real economic might. JF

  8. Dler
    April 13, 2015 | 22:12

    Educated Youths in Diaspora are complaining about lack of opportunities to take part in the political process in Kurdistan.

  9. Kuvan Bamarny
    April 19, 2015 | 09:01

    All Kurdish people pretty much have become politician which is a very good development in the field of political administration ,foreign affairs ,and self ruling.

    I believe what we need more is, to build up a stronger economic structure and systems for the people of kurdistan.Our educated youth are much more in need of taking parts in jobs.More work opportunities and income need to be generated.

    Capital needs to be spend professionally.More investment need to be made on different sectors .We have surplus in importing goods and deficit in producing and exporting goods in Kurdistan.

    Kuvan Bamarny/Duhok

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