How it could have been all avoided!

The Kurdish Globe - - NEWS - By Swara Kadir

The lack of cap­i­tal in­jec­tion from Bagh­dad into the Kur­dis­tan Re­gion has slowly dried up the econ­omy. The ques­tion is; how could it have been all avoided in the first place?

I met with a se­nior of­fi­cial at the Min­istry of Fi­nance a few days ago. He said that we have around 1,400,000 peo­ple in Kur­dis­tan on the gov­ern­ment pay roll. Only around 640,000 of th­ese are ac­tu­ally work­ing in a gov­ern­ment job, the rest are just get­ting paid. This huge num­ber of em­ploy­ees is con­sum­ing more than 70% of the Kur­dis­tan Re­gional Gov­ern­ment bud­get, which is around $700,000,000, leav­ing only $300,000,000 for ev­ery­thing else, in­clud­ing re­con­struc­tion, growth and eco­nomic devel­op­ment.

What is the main source that is feed­ing this huge nanny state? Bagh­dad. It was grudg­ingly send­ing Kur­dis­tan’s share of the bud­get. Kur­dis­tan has been en­tirely de­pen­dent on Bagh­dad’s hand­outs with no al­ter­na­tive mean of in­come. Then it stopped all to­gether, which brought the whole Kur­dish econ­omy to a stand­still. Now we are get­ting what is equiv­a­lent to bread crumbs from Bagh­dad in ex­change for giv­ing them crude oil. Over the long term this cre­ates a highly de­pen­dent, non-pro­duc­tive econ­omy.

Again the ques­tion is how could this have been avoided? This may seem sim­plis­tic, but there could have been an­other way of us­ing the twelve bil­lion dol­lars that Kur­dis­tan was get­ting, in­stead of just pay­ing it as gov­ern­ment wages to peo­ple. What I think would have been a bet­ter way of spend­ing that money is for the K.R.G to have sup­ported the pri­vate sec­tor. How? By first cre­at­ing the right en­vi­ron­ment, and body of laws. Sec­ond, by pro­vid­ing loans and sub­si­dies for good projects. Third, by avoid­ing cor­rupt prac­tices such as se­nior politi­cians hav­ing a stake in pri­vate busi­nesses. Fourth, not al­low­ing for­eign work­ers to work in Kur­dis­tan ex­cept for se­nior man­age­rial and train­ing po­si­tions.

The K.R.G could in re­turn start a pri­vate –sec­tor- hir­ing- pro­gram that would shift peo­ple from the gov­ern­ment pay­roll to work­ing in the pri­vate sec­tor. As a re­sult it would not have ended up with the cum­ber­some nanny state that we now have. In­evitably, be­cause of com­pe­ti­tion and the profit mo­tive, those peo­ple work­ing in the pri­vate sec­tor would have to be pro­duc­tive or else get the sack. Fat chance of that hap­pen­ing in the gov­ern­ment sec­tor!

In the end, the K.R.G needs to en­cour­age pri­vate en­ter­prise and bol­ster the pri­vate sec­tor. That, in my opin­ion, is the best way to cre­ate a strong in­de­pen­dent econ­omy with a pro­duc­tive labour force.

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