The War Econ­omy

The Kurdish Globe - - NEWS - By Swara Kadir

As Kur­dis­tan gears up for send­ing troops to Kobani to fight off the Is­lamic State , the na­ture of the econ­omy gears up for war too!

The mar­ket for lux­ury items is quickly dy­ing down. So much so that a high-end lux­ury car deal­er­ship was re­cently slash­ing prices in a whole sale event in or­der to get a few buy­ers for fear that things might get worse. Whereas the mar­ket for ne­ces­sity items such as sta­ple food, fuel and so forth is still strong. Also the black mar­ket for light weapons and am­mu­ni­tion is on high de­mand mode, mag­a­zines for AK47s are be­com­ing almost ex­tinct!

The stan­dard of liv­ing in Kur­dis­tan is get­ting lower, but not en­tirely as a re­sult of the war against I.S rather due to the with­hold­ing of the bud­get sent by the Iraqi cen­tral gov­ern­ment to the Kur­dis­tan Re­gional. This was the main source of the na­tional in­come, and its lack has been a painful les­son for the K.R.G to stop re­ly­ing en­tirely on Bagh­dad for money.

The K.R.G has been re­source­ful though in find­ing al­ter­na­tive means of na­tional in­come by by­pass­ing the Iraqi cen­tral gov­ern­ment in sell­ing crude oil di­rectly to buy­ers, and by se­cur­ing loans from dif­fer­ent in­di­vid­u­als and fi­nan­cial en­ti­ties. It has also at­tempted to in­tro­duce ra­tioning on fuel, which is a common wartime eco­nomic mea­sure dur­ing the time of chronic fuel short­age. This, as we know, caused ex­tended car queues be­fore petrol sta­tions. There are still more mea­sures that need to be taken though such as rais­ing taxes and in­tro­duc­ing fur­ther ra­tioning for scarce re­sources.

Is the eco­nomic fore­cast all doom and gloom though! Cer­tainly not, although the short term ef­fects of the war are neg­a­tive, it ap­pears that the long term will be pos­i­tive. Po­lit­i­cal ten­sion be­tween Er­bil and Bagh­dad is get­ting re­solved and with that the re­turn of the flow of money, which will pro­vide some breath­ing space for Kur­dis­tan to re­cover and work on long term strate­gies to build its promis­ing oil in­dus­try.

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