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By Shwan Zulal:
The Kurdistan Region has been seen as a model for the rest of Iraq and much has been made of the economic boom. Anyone landing at Erbil Airport and driving down the new roads past the new hotels and shopping malls can see the boom at first hand.
The other apparent boom is in personal wealth, which is contributing to a massive consumption bonanza. Economic growth is in double digits, thanks to increasing oil exports and the discovery of new oil fields.
The government has been recruiting like there is no tomorrow and the public sector has grown beyond sustainable. Property prices have shot up many folds since the fall of Saddam in 2003 and property speculation is one of the main economic activities in the Region. This large increase in property prices has pushed many out of the property market and the property bubble is still growing.
Talking to people who have visited the Region recently, many observe that the general population is growing richer and the Kurdish public are fast becoming consumers on a par with the Persian Gulf states. A large number of Kurdish households own more than one car and their income and standard of living has risen, especially in the urban areas. However, villages and smaller towns are still underdeveloped and the disparity is creating resentment.
The Kurdish public suffered for years under successive Iraqi regimes and it had to endure sanctions after the first Gulf War. It is a welcome change to see Kurds enjoying the riches of oil for the first time in their history. However, while this boom is taking place, and a large number of citizens’ income has grown – making them feel rich – the picture is not so rosy if we look at the state of public services: education, the health service and infrastructure.
Meanwhile the wealth gap is increasing rapidly, and a new, well-connected, super-wealthy elite is emerging, while the poor are getting poorer. This trend contributed to the recent protests in February as resentment and frustration with the corrupt government keeps growing.
Kurdistan is not an independent state and it cannot be expected to have all the provisions of a state. Nevertheless, the Kurds have the ambition to become independent and run their own affairs. Therefore, in order to be taken seriously, they must get their fiscal house in order, and a high standard is to be expected from the Government.
People may feel rich and have a reasonable disposable income in Kurdistan, but the fact remains that public services are starved of much-needed investment. Electricity and water shortages are a daily reminder of inept government planning and lack of investment in these areas. Above all, the health service and education system suffers from chronic under-investment.
People may feel they are wealthy by having flash cars and large swimming pools. But if they suffer from a serious health condition, due to health service limitations they have to seek treatment in one of the unregulated and very expensive private health providers in the region – or go abroad. In some cases, they have to sell their houses and spend most of their life’s savings to get treatment.
Furthermore, anyone who can afford to send their children to private schools does so – including almost all the politicians – because they have no faith in state-run schools.
Building grand hotels and shopping malls is easy, because they are moneymaking ventures. But building schools and hospitals is much more expensive, because keeping them running to a high standard can be a drain on the public purse. The Kurdistan Region is only spending over 6 percent of its annual budget on health, compared to around 16 per cent in Europe and nearly 20 per cent in the US.
Meanwhile, nearly 20 per cent of the budget has been spent on education, but this investment has not been managed properly and the system is fragmented and lacks direction. The education system clearly illustrates that just throwing money at the problem will not fix it. Clear direction and meticulous planning, combined with strong management and use of experts, is necessary to make the system work, whether it is health or education.
If the Kurdish public wants to be more affluent – and not just look rich on the surface – they must swallow the pill and spend some of their newly-acquired wealth on good quality health and education services. The government has a big role to play in trying to convince the public to take less money out of the system by way of patronage and salaries. The crucial thing is that the incumbent rulers need to curb their own excesses first: otherwise people will not trust any politician about their intentions. Without tackling corruption, it is an almost impossible task to sell the idea of curbing pay to fund well-run and funded public services and build up the infrastructure.
krg need to invest more and stop the looting of the national wealth by the connected few. unless leaders start leading by example we do not have much hope.
Is it possible that krg does not have anyone who thinks like kak shwan and sees what needs doing? or they are just keeping quiet to keep their first jobs.
Kak Shwan Zulal,
Congrats for the good job. I hope every Kurdish youth think the same way you do. I am optimistic if our much enlightened and energetic younger generation is offered an opportunity, they can better serve and lead. Our patriotic youth must more dynamically get involved in revolutionizing the direction of the homeland.