The Kurdistan Region is highly dependent on Turkey and Iran, respectively, to import much of its food and goods. Traders who deal with these two countries sound confident that no danger lies ahead. File photo: Rudaw/Farzin Hassan
ERBIL, Kurdistan Region – Memories of the 1990s blockade imposed on the Kurdistan Region by Iraq and the neighbouring countries are fueling similar fears ahead of the Kurdish independence referendum of 2017.
Kurdish officials, sensing signs of desperation by some of the citizens, have stepped in, sending a reassuring message that business is and will be as usual despite the vote in September.
Turkey and Iran both expressed their objections to the independence referendum, and Iraq called it unilateral, unconstitutional.
A Qatar-style blockade is in the minds of the people.
Kurdish officials are increasingly talking to the media, telling the people that trade and commerce is going as normal, and that countries such as Iran and Turkey need Kurdistan just as Erbil needs them.
Kurdistan’s Minister of Agriculture, Abdulstar Majid, said that although they hope for the best from Tehran and Ankara, Erbil has to prepare for the worst case scenario.
A blockade is no stranger to the Kurdish people. About two decades ago, they experienced what the Kurds refer to as a triple blockade in the mid-1990s: A blockade by the international community against Iraq, a blockade imposed by the former Iraqi regime, and a self-imposed blockade by the two ruling Kurdish parties one against the other, who while fighting a civil war, controlled different parts.
Government and business leaders say business continues as usual at the border gates. They blame what they call rumors and propaganda which are creating a perceived image of Kurdistan under blockade, an image they say is unfounded — promoted by some who want to take advantage of the situation.
Ziyad Abdullah, who sells wheat in Erbil, claimed that the Kurdistan Region has surpassed the level of self-sufficiency and can rely on itself for coming years. He said that it is the citizens who are about to create artificial mayhem.
Kamaran Fatah, a middle-aged man from the capital Erbil, like many others, has decided to store food in anticipation of the referendum.
He said that he did not see anything that worries him at the moment, but that he had seen other people purchasing essential food staples, such as wheat, flour, and rice.
"I did not hear any threats [from foreign countries], but every time I see a car, I see them buying wheat. And that is how I decided to buy about 500 kilograms," Fatah said, loading several bags of wheat into his pickup.
With demand on the rise, prices for some food items have slightly increased, too.
Fars Namiq, who was out shopping in an Erbil market, said that he is used to buy a particular type of rice, only to realize that its price has increased by 3,000 Iraqi dinars, or more than $2.
Kurdistan grows a small percentage of the rice it needs. Video: Kurdish farmers in Qasrok, Duhok Province, grow what is called Kurdish rice.
He believes that if Turkey and Iran decide to close the border, there is not much they can do as ordinary citizens.
"Even if the borders close, what we buy now will eventually run out. So it does not make a big difference," Namiq said.
The Kurdistan Region is highly dependent on Turkey and Iran, respectively, to import much of its food and goods. Traders who deal with these two countries sound confident that no danger lies ahead.
Izadin Sadradin, who owns the Erbil-based Aspi Rash or Black Horse Company that imports 80 food items, says that they have not increased the prices.
He said they are selling their food items for the same prices as they were "ten days ago, or a month ago.”
"Why would they close the border? Why would they damage their own interests?” Sadradin said, adding that foreign countries also lose if they impose economic sanctions in retaliation to the referendum.
Abdulstar Majid, the agriculture minister, said in addition to economic ties, Iran and Turkey have “security and political interests,” in Kurdistan. So if they would also suffer if they take actions against the referendum.
With regard to the Kurdish government, he said the officials have to hope for the best, but prepare for the worst.
"The government should have a plan for this issue...There is a principle in military terms, that you should take the worst case scenario. The worst case scenario is that they may close the border, or the worst case scenario is that they may stem the water,” Majid said, whose ministry is also responsible for water resources.
Iran finished the construction of a dam on the Little Zab River in late June that temporarily stopped the flow of water into Kurdistan’s Qaladze, leaving about 80,000 people without drinking water. Iran has since partially restored the water flow.
At that time, Majid said Iran may have done so in response to Kurdish plans to hold the referendum, which Tehran strongly opposed.
The minister said that Erbil should do more to store wheat produce.
"It is necessary that we store enough wheat for flour and other needs. It is unfortunate that the silos we have, have the capacity to store only 385,000 tons. The farmers may also have stored 200,000 tons. But if I mention the wheat flour, we need 550,000 tons for the Kurdistan Region. And for other purposes related to the wheat, we need between 200,000 and 250,000 tons," Majid said.
He said he has a plan that he will present it to the Kurdish government in order to help Erbil go self-sufficient with regard to wheat products and the water resources.
The Kurdish Region has been plagued with an ongoing financial crisis since early 2014, mainly because of the budget cut by Baghdad and a drop in oil prices. This forced many of the people to rely on other sources of income including farming.
Over the past five years, especially since 2014, the size of land used to grow wheat increased, during this period of time, wheat products increased, from 227,000 tons to 1.68 million tons.
Faced with a financial crisis since 2014, Kurdish people have started to rely on other sources of income such as farming. Kurdistan has since reached self-sufficiency, according to the Kurdish officials. File photo: Rudaw.
As for vegetables and fruits, Majid said that Kurdistan has self-sufficiency from June to November or December. The problem, he said, is that farmers do not have enough storage to keep the locally grown produce for the other seasons.
Iran, more than any other country, has expressed their opposition to the referendum, with the country’s national security advisor telling a visiting Kurdish delegation to Tehran that they should not expect “good things” coming out of Iran as a response.
Kurdistan’s second-biggest city, Sulaimani, has more trade ties with Iran, located in the east of the Kurdistan Region.
Head of Kurdistan's Union of Importers and Exporters said Iran’s rhetoric will not be translated into actions.
Mustafa Shekh Abdulrahman, from the Union, said he recently met a delegation of Iranian businessmen, accompanied by an Iranian parliamentarian.
He said he asked the MP in particular about Iran’s response, and he told him that Iran would not take such measures at all.
“The borders, under any circumstance, even if the Kurdistan state declared, will in no way face any problem, because, as I said, their interests, are twice that of ours," Abdulrahman said.
An official at the Bashmakh border crossing between Iran and the Kurdistan Region in Sulaimani confirmed that trade has not been affected as the result of the referendum.
"I give reassurance to all the people of Kurdistan that there are no problems at the border [gates]," Shakhawan Abubakir said, adding that the trade exchange this year has increased compared to last year.
Sulaimani’s Chamber of Commerce also released a statement, saying that there have been some rumors and “propaganda” that are aimed at instilling fear among the citizens, promoting the message that a blockage is underway.
"Trade exchange, and the imports of food and goods is going on with no problems,” the Chamber stated on Thursday. “We have not noticed any obstacles on the import of any food items or essential goods to the Kurdistan Region. Trade activities in the border gates and through the airports are going on as normal."
Kurdistan is landlocked, and relies on Turkey’s Ceyhan pipeline to export oil, the main source of its revenues.
Turkey has described the Kurdish referendum as “grave mistake”. But it stopped short of threatening economic or political retaliations.
Kurdish leaders have said that apart from Iran, no other country has expressed their opposition to the referendum. They say that other countries, like the US, and Turkey, have concerns about the timing, or the mechanism of the process.
Iraq also is opposed to the referendum. It calls it unilateral, unconstitutional, and one that it does not engage with its results.
Prime Minister Haider al-Abadi said last week that he will not resort to military confrontation if Erbil decided to go ahead with the referendum. Although, he still said that the Kurdistan Region does not have the authority to call the process, deeming it illegal, and against the constitution.
The direction of trade is more from Kurdistan Region to Iraq. So Iraq does not have much of an economic card to play against Erbil, except for the country's airspace.
In a worst case scenario, which is highly unlikely, a coordinated reaction from Tehran, Ankara and Baghdad may bring Erbil to its knees. Iran and Turkey could close the land borders north and east of the Kurdistan Region with Iraq in turn blocking Kurdistan’s airspace.
It is a Qatar-style blockade, but even worse, to be imposed by two countries which have now opened airspace to Qatar to survive the Saudi-led blockade.
Asked about the Qatar crisis with Riyadh ahead of his visit to Saudi Arabia in June, PM Abadi said that he opposes any sort of blockade against any country. He said his objection comes from the fact that Iraq suffered years of economic blockade in the 1990s, which affected the lives of millions of Iraqi people when the international community put Iraq under embargo.
Nawzad Rabati, deputy head of the Sulaimani Chamber of Commerce, believes trade would stay out of any future disputes that may arise.
“Many times there have been political problems, that countries cut their political ties [with each other] yet trade exchange and economic ties continued,” Rabati said, adding even sometimes the economic ties have helped to improve relations.
As of June, trade exchange between Turkey and Iraq was $5 billion dollars, a third of what it used to be before the ISIS war that began three years ago, according to the then Turkish Deputy Prime Minister Numan Kurtulmus. He told Rudaw then that 70 percent of the Turkish exports go to Erbil, and 60 percent of the companies in Erbil are Turkish.
Iran’s trade volume was estimated at about $8 billion in 2014.
If Iran and Turkey, one or both of whom, tried to pressure the Kurdistan Region through a blockade, Rabati warned that there is much that they will lose long-term.
He said in trade and commerce, business people always look for a new route, when one closes.
“They will not go back to the original route,” when a new one proves to be working, Rabati said, explaining that more options exist than the binary of Tehran and Ankara.
Correction: an earlier version of the story stated that the trade exchange between Iran and the Kurdistan Region was $4 billion in 2014. This was changed to $8 billion.
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