Another debt- ridden third world nation!
Debts are mounting up on the Kurdistan Region. As oil prices are getting lower and lower, national expenditure is getting harder and harder to cover as Baghdad is not keeping its promises. What is going to become of the Kurdistan economy?
The Kurdistan Regional Government (K.R.G) is borrowing money from the international banks. Money from Baghdad is not coming as promised by the central Iraqi government. This money was in return for Kurdish crude oil. As a result the Kurdistan Regional Government began borrowing money from international finan- cial institutions. The latest attempt is to borrow around five billion U.S dollars by negotiating with the major oil companies to lend money in return for crude oil.
The Kurdistan Region has learnt its lesson the hard way when oil revenue share from Central Iraqi Government stopped and it started borrowing money. The debt maybe quite difficult to return and may put Kurdistan at the mercy of the international financial institutions controlled by the U.S government and the multinational companies. Kurdistan may become another debt-ridden country like Kenya or Peru whose debts are accrued and their compound interest is making it impossible to pay them off. This may render Kurdistan a slave to debt and instead of using its oil money for economic growth it would just be paying back what it has borrowed!
According to the popular conspiracy theories, this is the exact aim of the U.S and other European countries. Put third world countries with oil natural resources under its dominion and control through debts. This way it can manipulate the global energy market and prevent a supply cut similar to what happened to the 1973 oil embargo imposed by OPEC (Organization of the Petroleum Exporting Countries) which caused a global recession.
Does the K.R.G have another option? Not right now, as the needs of the general population are pressing, borrowing money seems to be the only short term option. However it quickly needs to make big changes in the economy and turn it from a spending economy to a productive economy with a labour force that is actually contributing to the national income.