If You Are a Patriotic Kurd, Bring Money Back to Get Kurdistan Out of Recession

Economic crisis encourages street protest, Kurdistan Region, 2015

Economic crisis encourages street protests, Kurdistan Region, 2015

By Abdul-Qahar Mustafa:

The economies of both Iraq and the Kurdistan Region have been suffering from low oil prices and the expenses of the war with the Islamic State (ISIS) for more than two years. There are no signs that the situation will improve unless the oil prices go up again and the ISIS war comes to an end, because other than oil, Kurdistan does not have any rich source of income to stimulate their economy and protect their socially disadvantaged populations.

The economic crisis has affected all the population of Kurdistan but not equally. The living situation is gradually getting worse for a huge number of the population especially for people from the middle and lower classes. The recession has pushed many people deeply down to the point where they have been struggling to obtain their basic needs, because the income they earn is not enough.

According to the research and information I have gathered, the people who have been hit the hardest by the financial crises in Kurdistan are those with no jobs or with low incomes and living in renting houses. Most of these people have been struggling to make ends meet. They have to cut money from their food budget in order to be able to pay for their housing rent, electricity, water and cooking gas.

Some families of this group with low income are dependent on their relatives in order to survive by borrowing money from friends and relatives to support their families. Those without houses, jobs and incomes have been reduced to asking for charity or begging.

The middle class have also mostly been reduced to poverty as their incomes have shrunk. They do not have purchasing power any longer. Many of them have fallen behind in paying their furniture, car and house loans. They do not know how they will get by and pay back their debts after their salaries have been reduced into half. They now focus only on essential needs. They cannot make any plans for the future.

Life has become harder to manage for middle and lower income class people as their spending power has been significantly been because not only have their salaries been cut  in half, but they also come through three to four months late.

Big decisions like getting married, buying a home and new car and traveling are postponed by many people due to the lack of money and because they are not sure if they will lose their jobs or not. So they do not take any risk with spending or going into debt at this difficult moment where the country is undergoing recession.

In general, thousands of businesses have closed and more jobs have been lost, leaving many people without work. Youth unemployment stands at 30% in Kurdistan.  The rate is even higher among those with higher education since the recession hit Kurdistan.

The standards of living have significantly gone down since the start of economic crisis in Kurdistan. Many people do not get government services regularly. One day they have petrol but no electricity, the next day they have electricity but no salary.

In addition to the shortage of services, the costs of services like electricity, gasoline, patrol, cooking gas, water, internet, and phone have gone up too. Groceries and stores are well stocked but prices that are sensitive to the price of oil have gone up while prices of durable goods and luxuries have dropped, because of low demand. Many stores have been forced to close by the downturn.  Unemployment has increased. Wages have been cut and working hours have been increased.

Furthermore, the quality of food and drinks has become poor because owners of restaurants tend to minimize the quality in order to be able to make enough profits on their sales. Shopping for clothes or similar goods are now a luxury to most of people. A lot of people buy second hand clothes.

Many people from middle class families are not having cosmetic surgery or dressing fashionably  or driving deluxe cars any longer. The luxuries and special times like going to the parks, zoo, cinema, restaurants, picnic, parties, and weddings are almost out.

Treatment and services in public hospitals have deteriorated in quality due to shortages of quality supplies and staff although this is not the case in private hospitals. The postal service is expensive: it will cost you around fifty dollars to send a mail out of Kurdistan.

There has been drop in the fertility rate and an increase in abortions. Mortality is expected to have risen. Depression is at an all time high and the crime rate has grown. All these mark a significant drop in the quality of life.

Single man and woman remained single as they either do not have jobs or their incomes are too low to cover marriage expenses. Some engaged couples have postponed their wedding ceremonies and plans because they do not have money to spend. Divorce rates are going up. Relationships are struggling to cope with the daily pressures and stress. Prostitution numbers have increased as have the number of beggars on the streets.

Job opportunities are slightly better in agricultural areas and worse in industrial and urban areas. Many people have reverted to subsistence, living off the land and farming in towns and villages. However, this is largely impossible in the cities so those who have nowhere else to go are in dire circumstances.

Despite the fact that the Turkish government put visa prices up and laid strict conditions for entering their soil, many people continue emigrating to the Western countries  through countries like Jordan and Iran because they have no money and no jobs to make their living.

By contrast the standards living of the rich and super rich have not deteriorated as much as the middle and lower class people since the start of recession in Kurdistan. In other words, rich people are largely unaffected, especially the super rich because they have multiple sources of incomes and many of them have taken their money out of Kurdistan and made investments in safe and economically stable places.

For those rich people who own small companies, apartments, villas, private universities, shopping malls, stores, gas stations, car dealers and gold shops in Kurdistan, life has been easier to manage since the start of the economic crisis because they have not been affected by the financial crisis as hard as the middle and poor class.

You can clearly see that people like doctors, businessmen, high-ranking government officials, administrators and security forces officers still drive the best brand new cars, and fill up their gas tanks worth 50 dollars on a daily basis. They still live in the best houses, eat the best food, and wear the best clothes.

Some luxuries and services that these rich people enjoy most of the middle class cannot afford to buy, including uninterrupted power supply. For example, people from the middle class can manage a UPS system with batteries that provide fans, lighting and TV in the hours of load-shedding, but the rich as defined above can easily afford 5k to 10k kva generators and can have ACs, fridges and all their heavy electricity appliances work uninterrupted.

You can still see rich people paying their security guards, both personal and house guards who sit vigilantly outside their houses with firearms ready in case something goes wrong or just to induce fear. Usually the rich have an army of guards working in shifts to keep the house secure 24/7.

They have multiple cars parked by their mansions, usually one for each adult member of the house and a couple of extra cars. They have private drivers who still work for them regardless of whether there is a recession or not. When they go for shopping you can clearly see how they carry a pile of bags of groceries at once because they have purchasing power.

Their children are still been picked up and dropped off at schools and kindergartens by private drivers and in the most expensive brand new cars. Their new-born babies still get nannies for child care. Their school students still get private tutors to help them with the homework.

The women of the rich families regularly, almost every evening, go shopping. Clothes and makeup and accessories are their routine buys along with shopping for the never-ending interior design updates.

Some of these super rich people of Kurdistan have double citizenship. Mostly that means they have a permanent house in Canada, the US or somewhere in Europe. Their children are busy getting the best educations in top foreign universities.

The rich of Kurdistan enjoy more facilities than middle class people of Kurdistan. They have separate housing in different places and they always try to make their lives different from the ordinary people. They wear branded clothes. They eat the best foods. They organize parties at their homes or outside to gather with the member of their equivalent class and colleagues. These parties are sometimes used to make some decisions about their businesses etc.  In the summer they usually go for vacations.

Mostly these super rich and ordinary rich people own a successful business either in Kurdistan or outside of Kurdistan. Many people like me always wonder — when they see these rich people, their lifestyle, their level of wealth, their buildings, houses, cars, shops, malls, power and luxurious lives — as to how these people can obtain all these assets and become so wealthy beyond imagination and within a short period of time!

It is said that there are a few families that own most of the wealth and large scale businesses in Kurdistan. However, I know that there have been people among these rich people of Kurdistan who have become rich by working hard for their money and obtained wealth through decent and lawful ways, because the political and economic openness in Iraq after 2003 contributed to the boom and revitalization of trade and the economy. And that has given many people in Kurdistan the opportunity to significantly increase their wealth.

But many people, including me, know that a significant number of these wealthy people in Kurdistan became rich and obtained their wealth through deception, corruption, monopoly and the exploitation of others. We cannot help but suspect that these people are high ranking politicians and government personnel and their families, because people know that politicians and their families are both businessmen and public officials and can become rich by using political influence and by capitalizing on the hundreds of government projects, all of which generate a lot of profits.

It is believed that when the financial crisis hit Kurdistan, those ultra rich people moved billions of dollars out of Kurdistan to protect their wealth .They usually invest their money in business like stock markets, bonds, gold, etc where the markets have been booming. These rich people have probably gotten richer. But the ordinary rich people of Kurdistan, who have all their wealth inside Kurdistan, might not have become richer since the start of recession.

Clearly not all people of Kurdistan have been equally hit and affected by the financial crisis. The middle and lower classes with only one source of income have definitely become poorer, especially after their wages were cut by the government. Whereas the super rich have not been affected at all, the ordinary rich might not have become richer but they certainly have not become poorer. So we still have a gap between poor and rich here.

The Kurdistan Regional Government (KRG) has taken measures such as its austerity policy and regulating prices of some goods and services and reducing the cost of a wide range of goods and services to help people who have been hit harder by the financial crisis. However, these measures have not been as effective as they should because, first, many businesses are not complying with the government order to reduce prices of goods and services and, secondly, austerity measures will work only if accompanied by a stimulus package.

It’s true enough that austerity measure can cause fiscal surplus because the government is earning more than its spending. However, without government spending over and above its earnings, investment in infrastructure and different projects will stop. Private participants may not invest too if the government doesn’t. With the lack of private investments and due to the lack of spending power of the citizens, who have less money to spend due to cut in their incomes, the government will generate lower and lower revenue for investment. It is like a vicious cycle which leads to lower and negative GDP.

The KRG claims that they do not have money to boost the economy and that the annual income in the general budget is not enough for the salaries of state employees much less to pour it into economy.

On the other hand, no country or government seems to be willing to give the KRG loans to stimulate their economy, neither does any international bank or organization seem ready to give loans to the KRG to help Kurdistan recover from the current economic crisis, because Kurdistan is not a country.

Maybe those ultra rich Kurdish businessmen, who have taken their money out of Kurdistan and put it into international banks in developed countries like the USA and EU countries, will be of a great help to boost the economy of Kurdistan and get it out of recession by bringing their money back to Kurdistan?

If someone has love for his land and people, he should help Kurdistan in times of hardship and difficulties. If I am a patriotic Kurd, I should value and care more about the Kurdish people and the Kurdistan land than my personal interests.

Please bring the money back to Kurdistan. I assure you that there are plenty of business opportunities that tend to be very profitable during recession time such as investing in farming, livestock, restaurant chains, private hospitals, apartments, travel company, stores, repair shops, education, precious metal, government bonds, etc.

If you do not want to generally favor your personal interests over the interests of the Kurdish nation, than at least do it for the sake of the peshmergas and martyrs who have shed their blood to protect you, your family, your relatives, your business and your wealth in Kurdistan. Please do it as it would be a big help to overcome the economic and financial crises in Kurdistan.

Kurdistan needs money to stimulate its economy. Only by boosting the economy can the government overcome recession, raise back the living standards of people,  balance the gap between rich and poor through redistribution of income and tackle social issues such as poverty, emigration and crimes that threaten the security and stability of Kurdistan.

Abdul-Qahar Mustafa is a graduate student from Saint Luis high school in Canada. He is advocate of justice, democracy and human rights. He currently lives in Sarsing/Duhok, Iraqi Kurdistan.

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