Kurdistan's economic boom threatened by terrorist bombs
Baghdad (AsiaNews/Agencies) Kurdistan is experiencing both unprecedented political and commercial success and increased terrorist violence. In the government sworn in on 3 May, Kurds clinched eight departments and a president, Jalal Talabani, already leader of the Patriotic Union of Kurdistan, PUK. But more important still is commercial development in the three Kurdish provinces, preferred even over Baghdad by many foreign investors.
The government of Kurdistan has reportedly signed 70 contracts with overseas companies and is currently handling execution of 25 projects worth 75 million US dollars. More than the money of foreign enterprises, Iraq needs their experience. Analysts pinpoint the establishment of an Investment Promotion Board in regional capital, Sulaimaniyah, as the chief reason why the area is attracting foreign companies. This central agency guides and facilitates projects.
Secondly, in March 2004 the local government approved a law which: exempts foreign enterprises from paying tax for five years, allows for the free cession of land for commercial construction in large-scale projects, and grants the right to take profits out of the country. Meanwhile, in Baghdad, a law set up by the Coalition Provisional Authority, CPA, is still in place. This law evaluates customs exemption per project; besides, foreign entrepreneurs cannot own land or establishments; they can only obtain a land-lease for a maximum of 40 years.
Thirdly, the local administration has proved faster when it comes to applying procedures. According to Abbas Noori, manager of the Investment Promotion Board, there are standard procedures for every kind of business project in Kurdistan and procedures are entirely handled by one office, so it is possible to decide within a few days. Several legal experts and administrative officials say this swiftness would not be possible in Baghdad.
Also significant is the greater degree of social security with lower risk of attacks. Despite recent serious episodes, resulting in hundreds of deaths within a few months, there is no high frequency of daily attacks as there is in Baghdad or other regions. However, analysts do fear an escalation of violence against ethnic Kurds, with the danger of an ethnic and religious clash.
The region is enjoying significant development: Adil Karim, director of the Investment Promotion Board, says "land prices have gone up by 300% after US intervention and many factories have been leased by foreign firms". Meanwhile construction of the region's first airport is nearly complete, right on the site from where planes of Saddam Hussein used to take off to engage in repression of the Kurdish minority. Many streets in the eastern zone are under construction; more than 30% of works have been entrusted to foreign companies because their technical skills are better, according to Herish Muharram, manager of the Reconstruction Projects Institution. There is an increased demand for a work force, whereas under Saddam Hussein only the government gave work and there was a high unemployment rate; early in the morning, a long queue of workers can be seen in front of the main mosque in Sulaimaniyah, even of other regions, all waiting to be called up.
However, critical voices are not lacking. Starting from those who hold that the regional government led by PUK is riddled by widespread corruption, with the two main parties intent on dividing management posts and land resources among themselves. And Nawroz Jamal Khafaf, president of the Kurdistan Contractors' union, has charged that many local firms are about to collapse, partly because of advantages given to foreign firms and also as a result of price increases of products and raw materials brought about by economic development. (PB)
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