MOP and World Bank Re­port sug­gests KRG needs US$1.4b to sta­bi­lize econ­omy

PM Barzani says Kur­dis­tan needs more in­ter­na­tional hu­man­i­tar­ian and mil­i­tary sup­port

The Kurdish Globe - - NEWS -

The Kur­dis­tan Re­gional Gov­ern­ment (KRG) is fac­ing an eco­nomic and hu­man­i­tar­ian cri­sis as a re­sult of the in­flux of Syr­ian refugees and more re­cently the In­ter­nally Dis­placed Per­sons.

Ac­cord­ing to a newly com­pleted KRG – World Bank re­port, eco­nomic growth con­tracted 5 per­cent­age points in the Kur­dis­tan Re­gion, and poverty rate more than dou­bled in­creas­ing from 3.5 per­cent to 8.1 per­cent.

The re­port, Eco­nomic and So­cial Im­pact As­sess­ment of the Syr­ian Con­flict and ISIS Cri­sis, pro­vides na­tional and re­gional pol­icy mak­ers with a tech­ni­cal as­sess­ment of the im­pact and sta­bi­liza­tion costs needed for 2015, as­so­ci­ated with the in­flux of refugees and IDPs. The sta­bi­liza­tion cost for 2015 is es­ti­mated at US$1.4 bil­lion in ad­di­tional spend­ing above and be­yond the KRG bud­get.

This es­ti­mate could get much higher depend­ing on how long the cri­sis per­sists. While the KRG has been re­spon­sive to ad­dress­ing the needs of the dis­placed pop­u­la­tion up till now, more re­sources are needed to avert this hu­man­i­tar­ian cri­sis and ad­dress the needs of the dis­placed pop­u­la­tion in the medium and longterm. Im­pact refers to the im­me­di­ate eco­nomic and fis­cal ef­fects on the KRG econ­omy and bud­get, while sta­bi­liza­tion cost refers to the ad­di­tional spend­ing that would be needed to re­store the wel­fare of res­i­dents of the KRI.

“The in­ter­na­tional com­mu­nity re­mains deeply con­cerned by the cir­cum­stances fac­ing the refugees and In­ter­nally Dis­placed Per­sons in the Kur­dis­tan Re­gion of Iraq,” said Robert Bou Jaoude, World Bank Spe­cial Rep­re­sen­ta­tive for Iraq.

“We hope that this as­sess­ment will sup­port the KRG’s dia­logue with its na­tional and in­ter­na­tional coun­ter­parts and that a swift res­o­lu­tion to this prob­lem will be iden­ti­fied’, noted Jaoude.

The study high­lights how prices and un­em­ploy­ment have in­creased, and refugees and IDPs en­ter­ing the la­bor mar­ket are push­ing wages down. A surge in vi­o­lence led to sup­ply side shocks. The ISIS cri­sis has had a sig­nif­i­cant ef­fect on trade of goods and ser­vices. Trans­porta­tion routes were dis­rupted. For­eign di­rect in­vest­ment flows have de­clined and op­er­a­tions of for­eign en­ter­prises have been ad­versely af­fected. Dis­rup­tion of public in­vest­ment projects has had a neg­a­tive im­pact on the econ­omy.

“As a re­sult of the Syr­ian con­flict and the ISIS cri­sis, KRI’s pop­u­la­tion in­creased by 28 per­cent plac­ing strains on the lo­cal econ­omy, host com­mu­nity, and ac­cess to public ser­vices. We ac­cept- ed and treated them as our own by pro­vid­ing ac­cess to all public ser­vices in our re­gion,” said Dr. Ali Sindi, KRG Min­is­ter of Plan­ning.

“While our gov­ern­ment has al­lo­cated sig­nif­i­cant re­sources―through the Im­me­di­ate Re­sponse Plan―to ac­com­mo­date the needs of the dis­placed pop­u­la­tion, it can­not ad­dress this big scale hu­man­i­tar­ian cri­sis on its own. Greater sup­port from the na­tional and in­ter­na­tional part­ners will be needed to rise above this hu­man­i­tar­ian cri­sis and meet the needs of the dis­placed’, adds the KRG’s Min­is­ter of Plan­ning.

The re­port is an out­come of close col­lab­o­ra­tion be­tween a wide spec­trum of World Bank ex­perts and re­gional gov­ern­ment in­sti­tu­tions and in­ter­na­tional part­ners.

“A na­tional and in­ter­na­tional re­sponse is needed in the im­me­di­ate fu­ture and in the medium-term there is a need for struc­tural re­forms,” said Si­bel Ku­lak­siz, World Bank Se­nior Econ­o­mist and Project Leader. “The au­thor­i­ties have al­ready rec­og­nized the need for eco­nomic re­forms and the di­ver­si­fi­ca­tion of the econ­omy. In­deed, one of the main pil­lars of the KRG Vi­sion is the devel­op­ment of a di­ver­si­fied econ­omy driven by the pri­vate sec­tor.”

MOP and the World Bank or­ga­nized a con­fer­ence in Er­bil about the find­ings of the joint study. The con­fer­ence, took place on Thurs­day, Fe­bru­ary 12, 2015 at the Saad Con­ven­tion Cen­ter.

The con­fer­ence at­tended by the KRG Prime Min­is­ter Nechir­van Barzani, Min­istry of Plan­ning and World Bank of­fi­cials.

PM Barzani ex­pressed his grat­i­tude to the World Bank for help­ing out Kur­dis­tan Re­gion, in an ad­dress to the Con­fer­ence.

PM Barzani said in 2003 KRG drafted a com­pre­hen­sive eco­nomic strate­gic plan, and achieved a fast devel­op­ment in all as­pects in a short time.

“Kur­dis­tan be­came a fo­cus point on the re­gion’s map,” said PM Barzani. “Although we have con­tin­u­ously had dis­agree­ments and prob­lems with Bagh­dad over sev­eral is­sues that the pre­vi­ous fed­eral gov­ern­ment not even failed to ad­dress but also com­pli­cated them fur­ther day af­ter day.”

Kur­dish PM also talked about the Syr­ian con­flicts, the ISIS war and the in­ter­nal po­lit­i­cal and se­cu­rity crises in­side Iraq has led to the dis­place­ment of hun­dreds of thou­sands of peo­ple into Kur­dis­tan Re­gion, and the Kur­dis­tan Re­gion tried to ex­tend its help­ing hand to all of them ac­cord­ing to the hu­man­i­tar­ian prin­ci­ples and in­ter­na­tional reg­u­la­tions.

“All th­ese hap­pened in a short pe­riod of time with no strate­gic plan, and the fed­eral gov­ern­ment con­tin­ued to worsen the cri­sis in the Re­gion by cut­ting the Re­gion’s bud­get share and its gov­ern­ment salaries, and also cre­ated a big prob­lem for the coun­try’s na­tional bud­get. Hence, de­spite the hu­man­i­tar­ian cri­sis, the ter­ror­ism war and pro­tect­ing se­cu­rity and sta­bil­ity, the Re­gion faced a big eco­nomic cri­sis.”

He said that the KRG strongly be­lieves that the cri­sis is go­ing to reach an end but for this it needs a big sup­port from the in­ter­na­tional com­mu­nity in the shape of mil­i­tary sup­port to the Pesh­marga Forces in their war against ter­ror­ists and hu­man­i­tar­ian aid for the refugees and IDPs.

Barzani said that there are more than 1.5 mil­lion refugees and IDPs in the re­gion, amount­ing to a 28% in­crease in pop­u­la­tion in only one year, which has put a huge bur­den on the gov­ern­ment in terms of ed­u­ca­tion, health, ac­com­mo­da­tion and em­ploy­ment for the refugees.

Com­ment­ing on the MOPWorld Bank re­port, PM Barzani said they can use the find­ings of the re­port as a road map for the eval­u­a­tion of the sit­u­a­tion and set­ting a mech­a­nism for over­com­ing this eco­nomic and hu­man­i­tar­ian cri­sis.

PM Barzani ex­pressed his grat­i­tude for all gov­ern­men­tal, non-gov­ern­men­tal and in­ter­na­tional or­ga­ni­za­tions in help­ing the KRG through this dif­fi­cult sit­u­a­tion, and also thanked the Pesh­marga forces for be­ing able to keep the se­cu­rity and sta­bil­ity of Kur­dis­tan Re­gion in the mid­dle of all the in­sta­bil­ity in the re­gion and fight­ing the world’s most danger­ous and pow­er­ful ter­ror­ist or­ga­ni­za­tion.

“For ul­ti­mate victory, the In­ter­na­tional Coali­tion has to pro­vide ad­vanced weapons and mod­ern tech­nol­ogy to the Pesh­marga Forces.”

He also added that the Syr­ian cri­sis and the IS war will con­tinue and the crises in Kur­dish will con­tinue as well, and it is ex­pected that more peo­ple seek refuge in Kur­dis­tan both from Syria and from in­side the coun­try. There­fore in co­op­er­a­tion with the Iraqi gov­ern­ment and the in­ter­na­tional com­mu­nity, ef­fec­tive plans have to be de­vel­oped to strengthen Kur­dis­tan Re­gion in all as­pects.

“We be­lieve in our­selves and are determined to de­velop our econ­omy; we would like to have good re­la­tions with our neigh­bors and friends and de­velop our re­gion. I hope we, you and the whole in­ter­na­tional com­mu­nity, are able to com­mit to our re­spon­si­bil­i­ties to­wards the harsh sit­u­a­tions of the refugees and IDPs in Kur­dis­tan Re­gion,” con­cluded PM Barzani.

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