By Dr. Saman Shali

                                            -     First Part    -

Following the Kurdistan region's economic, political, and tourism recovery between 2003 and 2013, it began to decline gradually after oil extraction, leading to a cut in the region's budget in 2014 and the emergence of ISIS, the displacement of more than two million refugees, and the international price of oil falling put extraordinary pressures on KRG.

The KRG's began to confront serious financial challenges. It was forced to rely on loans from foreign corporations, local businesses, banks, and other countries to fund the region's and the government's needs, including massive employee pay. Successive central governments and Parliaments, led by the Federal Court, began to exert pressure on the region's successes and halt economic growth. For example (Gas and oil law, Parliament, and Provincial Councils) have been revoked, and the government has become a caretaker government until the next Parliament election on 18 February 2024. The tripartite budget, which added unfair conditions against the region, did not impose them on other Iraqi governorates that extract or not extract oil or gas. These conditions increased the burdens on the government and the citizens of the region, especially employees who have yet to receive their salaries for three months..

Under these circumstances and with the increase in popular discontent, the government must drastically change its strategies, declare a revolution, and take bold steps to escape this deadlock imposed on the region. Below are some crucial points regarding the new government's strategy in the current situation (each point will be followed by an article later):

1. Diversification of the non-oil economy

Economic diversity refers to various industry sectors and economic activities within a region. It is a measure of the breadth and depth of economic opportunities and activities that exist within an area. Economic consideration is a positive aspect of an economy. It can lead to more stability, resilience, and overall economic health. Economic diversification leads to self-sufficiency, job creation, and the preservation of financial wealth within the region.

2. Creating a more attractive and bold investment environment

Creating a more attractive and bold investment environment involves implementing policies and strategies encouraging domestic and foreign investors to invest in a region or country. A robust investment environment can lead to economic growth, job creation, and prosperity. Including an investment law for small and medium-sized local companies in the investment law will encourage the private sector to invest more widely in the region.

3. Developing the public sector

Developing the public sector involves improving the efficiency, effectiveness, and responsiveness of government institutions and services. A well-functioning public sector is essential for promoting economic growth, ensuring social welfare, and fostering good governance. Working to reduce red tape, increase transparency, and fight corruption will lead to increased services for citizens.

4. Combating corruption

Combating corruption is crucial for governments, organizations, and societies worldwide. Corruption undermines economic development, erodes trust in institutions, and hampers social progress. Implementing the anti-corruption law must be one of the government's highest priorities; consolidating the principles of social justice and fighting corruption begins from the top of the pyramid.

5. Developing the banking sector

Developing the banking sector is crucial for the overall economic development of a country. A robust and well-regulated banking sector provides financial stability, fosters economic growth, and facilitates investment. The loss of trust between citizens and banks hinders banks from participating in investment and building infrastructure. Therefore, the government must work with the banks to restore this confidence, which restores the banks' position to serve citizens and work together to create a robust regional investment environment.

6. Independent judiciary

The independent judiciary is the fundamental pillar of a free judiciary system,  a system of government in which the judicial branch is separate from and not controlled by the executive or legislative branches. This separation of powers is a fundamental principle in democratic societies.

7. Reducing government expenses

Reducing government spending is critical for successful governance and long-term economic development in the Kurdistan Region of Iraq, as in any other region or country. The specific solution may differ depending on the region's unique conditions, but this is a critical step in making the government more functional and moving the economy ahead.

8. Big Companies Contribution

During a country's economic crisis, big companies can play a significant role in helping the government address the challenges and contribute to economic recovery.

9. Selling state property and ownership of agricultural lands

Governments sell state property and agricultural lands for various reasons, and the process can vary from one country to another. The sale of state property and agricultural lands is typically governed by laws, regulations, and policies established by the government. The primary purpose is to generate extra cash to run the government.

10. Unifying the forces of the Peshmerga and the security forces

Integrating the Peshmerga and security forces in the Iraqi Kurdistan Region is complex and sensitive because it combines military structures with different histories, relationships, and leadership systems. Careful preparation, political will, and the participation of several Kurdish groups and factions are required to achieve this unity. It also encourages investment because investors work in a stable and safe operating environment.

In conclusion, the financial, economic, and political blockade imposed by the central government, Parliament, and the Federal Court must take necessary measures to get out of this impasse and rely on its economy to finance the needs of the region, as well as self-sufficiency in local production in the agricultural, industrial, tourism, health, scientific, and water resources sectors, and energy in cooperation with the federal authorities according to constitution to benefit the financial and economic situation of Iraq and the people of Kurdistan. On the other hand, with the above steps, the region will take a different direction, contrary to the policy that wants to bring the people of Kurdistan and the region to its knees economically, financially, and politically.

Saman Shali has a Ph.D. in Science (1981) from the University of Sussex. Dr. Shali worked as an Assistant Researcher and Assistant Professor at the University of Sussex, King Saud University, and Pennsylvania State University. He is also a senior fellow at the Mediterranean Institute for Regional Studies.