We have all become far too inured to the sight of desperate migrants huddled on international borders, risking their lives to find a new life, only to be herded into makeshift camps. Whatever you may think about the legal or moral obligation of European countries to welcome them, you can’t dispute that they are legitimately fleeing violence and economic distress in places like Syria, Iraq, Sudan, Eritrea and even Gaza. But Iraqi Kurdistan?
If it never was exactly another Singapore or Dubai, the way it was once regarded, Iraq’s Kurdish region had been a rare island of peace in the region. It still isn't a basket case by any stretch, unlike the rest of Iraq, or Syria, for instance. It's functioning. Yet by some estimates, as many as 8,000 of the 17,000 refugees huddled on the border between Belarus and Poland as of last week hail from Kurdish Iraq.
The proximate cause for their being there is that Belarus leader Alexander Lukashenko had been using migrants to blackmail Europe. Belarus handed out tourist visas to Kurds, Iraqis, Afghans and Syrians, no questions asked, to fly to Belarus and then directed them to the border with Poland and Lithuania.
A prospective refugee doing his or her basic geopolitical research would have easily learned that Belarus isn’t a land of freedom and opportunity and that Poland and Lithuania would do whatever it takes to prevent them from entering. Still, if the news reports are right, Kurds were prepared to pay a hefty $5,000 to risk it all in a desperate attempt to escape their homeland.
Iraqi Kurdistan is a story of political stability squandered. For two decades, it has remained aloof from Iraq’s violence and chaos and Syria’s civil war, even though it shares long borders with both countries (as well as with two stable but troublesome neighbors – Turkey and Iran).
But Kurdistan never really capitalized on that stability. Instead, the Kurdistan Democratic Party and Patriotic Union of Kurdistan, the two parties that split control of the quasi-country, allowed it to become a rentier economy built on oil exports, just as Baghdad allowed it to happen in the rest of Iraq.
The rest of the economy was allowed to wither away, as the government used oil profits to provide government jobs rather than invest in economic development. The civil service ballooned to the point where Kurdistan’s government employs a bigger share of the country’s total workforce than any other place in the world bar Communist Cuba (65-68 percent versus 85.2 percent). Even more Kurds rely on the state for pensions and social benefits.
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Needless to say, the government can’t find useful work for so many people. Nor is it hiring the best and brightest, because government jobs are used by the two ruling parties (or more precisely, the two ruling families) to employ loyalists and punish opposition supporters.
None of this mattered very much between 2007 and 2013, when oil prices were high and gross domestic product was growing by 12 percent a year. Attracted by Iraqi Kurdistan’s stability and all that oil money sloshing ground, foreign investors piled in – alas, only to build shopping malls and apartment towers rather than factories or farms. No matter, the veneer of prosperity shined bright.
Until it didn’t: Oil prices collapsed in 2014 and tumbled even lower during the COVID pandemic. The government, which counted on oil revenues to cover the lion’s share of its expenses, couldn’t pay salaries and social benefits. Baghdad, which was supposed to share some of its revenues with Kurdistan, had too many of its own troubles to transfer the money. Kurdistan’s civil servants have been getting paid sporadically at best and government debt has risen to more than $28 billion.
The situation exploded into deadly protests last December, but they have had no demonstrable impact. Instead, the government cracked down on what there was left of the feeble opposition, and the economy continued to limp along as if nothing had happened. Reportedly some desperate civil servants have taken up farming again in lieu of salaries.
Couldn’t survive the cure
Kurdistan doesn’t provide much macroeconomic data in a timely way. But anecdotal reports speak of high unemployment, families struggling financially and young people leaving in large numbers, not only via Belarus. The government is broke, and there’s no private sector to pick up the slack.
Oil prices have recovered to some extent now, but a wise Kurdish leader should be thinking twice about a return to the good old days of pre-2015. In the first half of this year, when prices were bouncing up from their COVID lows, monthly revenues remained far below monthly expenses. Global oil prices have since risen higher but they aren’t expected to remain that way next year.
On paper, there’s no reason why Kurdistan has to be a case of Iraqi dysfunction-lite.
In most of the world, political stability is taken for granted; in the Middle East, however, it is in short supply, so it’s an asset Kurdistan should be able to leverage economically. It also has agricultural potential, sits on important trade routes, enjoys the goodwill of the West and could, if it had the political will and wisdom, redirect its oil profits toward development rather than fattening the government payroll.
That’s on paper. In practice, corruption is no less deeply embedded in Kurdistan than it is in Iraq; it’s not just the politicians at the top who live off of it, but the hundreds of thousands of ordinary Kurds who live off their largesse. They are all part and parcel of the system, as are their families, who depend on the system no less. Cleaning it up would hurt too many people.
It appears now that the Kurdistan government is helping to repatriate at least some of the migrants. But there isn’t any evidence that officials have learned their lesson: Kurdish Prime Minister Masrour Barzani dismissed the whole affair as just a ”criminal human trafficking issue.”
Acknowledging that just maybe there’s a real problem back at home would be the first step toward reform. Apparently, Barzani isn’t ready to take even that.