What can a good Kurdish government do for the economy?
How important is the role which a government plays to develop the economy in an oil rich country? Has enough been done by the Kurdistan Regional Government (K.R.G) to bring about prosperity?
Kurdistan is an oil rich region of approximately 45 billion oil barrels in reserves. This is excluding the 15 billion barrels of Kirkuk. The abundance of this natural resource has been both a blessing and a curse for the Kurdish economy. After the fall of the former regime of Saddam, billions of dollars have come into the Kurdistan Region from national oil revenues. The question is: has this money helped in bringing about good economic growth or has it had the opposite effect?
Since the emergence of the Kurdistan Regional Government, the role of good statesmanship has become increasingly apparent in managing oil revenues. Compared to other Middle Eastern countries, the Kurdistan Region enjoys a fairly democratic government with sound economic policy. This doesn’t mean that it’s flawless, but rather one must look at things in context. The K.R.G has adopted Dubai as an economic model for attracting foreign investment. It is clear that a lot of major oil multinational companies like Chevron, Exon Mobile, and Gazprom have invested heavily in the Kurdistan Region. The K.R.G has been successful in this regard. Yet there is more to be done.
Internally the K.R.G needs to carry out reforms in order to bring about real economic growth and facilitate the emergence of a strong private sector that could lead the economy forward. The rule of law needs to be established more firmly and the judiciary should be more independent. In addition, the big burden on the budget (estimated at 70%) is wages given to the huge number of people who are government employees. This must be cut down.