Kurdistan’s Economy Hampered by Lack of Roads

 

By JUDIT NEURINK

ERBIL, Kurdistan Region – The unfinished dual carriageway, under construction to connect the capital of Iraq’s autonomous Kurdistan Region with neighboring Turkey, stops abruptly at a grave high up on a sandy mount, festooned with ribbons in the green color of Islam.

Construction of the road has been partly suspended, as authorities try to discover whether it could belong to a Muslim saint. With praying at such graves a practice among Kurdistan’s Muslims, authorities are afraid that tampering with the burial place could anger the Islamic parties.

Serwan Said, mayor of Rovia, a small trader’s town some 100 kilometers northwest of the regional capital, Erbil, hopes that authorities will allow the grave to be moved, and that the new stretch of road will still be finished by year’s end.

“Nobody really knows who is in the grave”, Said says. “Most probably it is one of the Islamic warriors who brought Islam to Kurdistan in the 7^th century. “We are in contact with the Ministry of Religion and Endowment. We hope they will solve the problem soon,” he adds.

The grave underscores just one of the many problems that hamper the construction of new roads in Iraqi Kurdistan, which has used the autonomy it won after the 2003 US-led invasion of Iraq to transform the enclave into a haven of relative peace in an otherwise still violence-racked country.

“A major problem when building roads is that all the land in Kurdistan is private,” says Ezat Sabir, an economist at the University of Sulaimani.  “According to an old law, land is yours if you have been using it for the past 30 years. So the government has to buy all the land that is on the route of a motorway,” he explains.

The road past Rovia is also part of a much bigger, billion dollar plan for a national express way between Haj Omran, at the Iranian border and Zakho, on the Turkish border.

On much of the route, work is ongoing. But Zana Uzeri, at the planning department of the Ministry of Housing and Construction, stresses that the project still is only in the planning phase. The work that is happening is mostly necessary enlargement of present roads, he says. “To start building the expressway we are waiting for investors to come forward.”

But Sabir does not see foreign investment financing the highway. “Nobody will invest in an expressway, because in Kurdistan every two years the government changes.”  He says contracts could be changed every time time one political party takes over from another.

Sabir adds that investors also could be turned off by the long time they have to wait to see a return on their investments: The payback period for the road is approximately $2 billion to $3 billion over 25 years. An alternative “pay and drive” toll system to pay back investors quicker is hard to implement in Kurdistan, where the banking system is still in its infancy.

He notes that under the former regime road taxes were used to finance construction, but the system was scrapped in 1991. “For 22 years Kurds have not paid tax, and they do not want to. That’s why we wait for the investors,” he explains.

Yet, with all the oil and gas that has to be transported from the energy-rich enclave, and because of the geographic location of Kurdistan between Europe and Asia, he stresses that good roads are a necessity.

“Daily, some 100,000 barrels of oil are transported by road. There is only one pipeline to get the oil out, and we need more.” And even then, a lot of the oil will still be moved over land by tankers, he predicts.

Another important economic activity is cement production at Kurdistan factories. “At present, we have three factories, but that will go up to 10.  All the cement is distributed by road. It would be good if the plans for a railway are finalized, but it does not look like they will.”

Money for the roads is an important issue in Iraqi Kurdistan. But it is difficult to find out how much the Kurdistan authorities are spending on building them. None of the people interviewed had exact figures, and the yearly government budget contains no details. Some suggest this is because of corruption, explaining that a large part of the funds never reach their destination.

Sabir guesses that no one knows the nitty gritty: “The person responsible for planning at the ministry leaves after six months, and when the next one comes, he starts from the beginning.”

“At present, some 20 percent of the inflation is caused by the problems with the roads,” Sabir explains.  “It takes too long for goods to reach their destination. An expressway will make it possible to transport goods not only faster, but also in greater volumes.”

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