Kirkuk: financing the future

January 13, 2012 at 11:50 pm | Posted in Turkmens | Leave a comment
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 “We hope the economy of Kirkuk will be managed by technocrats. The case of Kirkuk’s current oil situation can be illustrated by a simple image of a cow, eating grass in Kirkuk but getting milked by other regions.”

 Kirkuk: financing the future

EURONEWS

12/01 17:31 CET

Kirkuk lies on the well of Iraqi oil. The ethnically diverse city contains 40 per cent of the country’s oil exportation, while representing just 2.2 per cent of its territory.

The town is located in the northern region of Iraq, around 250km from Baghdad. With the recent withdrawal of US troops, protecting this veritable goldmine is a high priority.

This oil rich province has been the setting for many disputes over the years.The town’s troubled history and uncertain future is leaving many regional and foreign investors anxious to protect their lucrative oil reserves.

Kirkuk is home to a diverse mix of Turkmen, Kurds and Arabs.

But despite its wealth on paper, the local population live on the edge of poverty, blaming the cities administration for the unemployment, poor investment and ethnic conflicts.

Mohammed Shawan an unemployed Kurdish man gives his view:

“The whole world lives on our expense, from our oil – especiallyKirkuk. We are really tired, we are deprived of electricity, of water. We don’t have work and instead of helping us they bomb us. Instead of protecting us they send explosions.”

Local man Ayden Abdulcabbbar adds:

“Nobody recruits me, why? Because I am Turkmen. If I were Kurdish, Shiite or if I belonged to another ethnicity, I would be able to find work. I have three daughters to support, I have rent to pay. Why should I have to earn my living, doing manual labour? Do you think that’s fitting for an educated person?”

To regulate the flow of investments, national commissions have been created. It is hoped this initiative will identify the most important areas for potential investment in the region.

The President of Kirkuk’s investment commission explains.

“Kirkukis very rich in oil and it’s become an attractive option for foreign investment. It’s a strategic city as it links central Iraq with the Kurdistan region. Huge agricultural fields are estimated to have up to 2 million hectares of fertile soil. We have given 17 investment authorisations in different fields, among them are housing projects, industry and plastic production.”

Kirkuk does have a lot of economic potential but many investors fear the uncertainty surrounding its investment regulations, arbitration laws and tax structure. This lawyer and human rights activist, worries bureaucracy and security issues are putting off much needed investors.

Lawyer, Bushra Mohammed goes into more detail:

“The investors the Kurdistanr region could complete all the administrative procedures within half an hour. All they need is approval from the ministry and the contacts signature to start a company. But in Kirkuk, it’s complicated. We need to make these bureaucratic procedures a lot simpler, to encourage investment in Kirkuk. Moreover the investors have to take into consideration expenses and assure the security of the staff and the project, because of regions overall problems with security.”

The Governor of Kirkuk was appointed Head of local government seven months ago. His main priority now is to tackle the implementation of the petro-dollar project, a move which could create, much needed new jobs.

Governor of Kirkuk Dr. Najmaldin O Karim breaks down the issue:

“ The investors have been coming here and making proposals to invest in different fields. Some of the problems are investment it’s really not security, it’s some of the regulations in Baghdad. In Kirkuk we have an issue which is called ‘land dispute’, people whose land had been taken before, confiscated by the government and given to others. Now these people have come back and they are reclaiming their land. But we’re starting to work on that, for example, very soon we will be giving large plots of land for housing projects in Kirkuk.”

Kirkuk witnessed several terrorist attacks last year, where hundreds of civilians lost their lives. In August, the Syrian Catholic Church became the latest target.

In such a volatile environment, investors are calling for the Iraqi government to guarantee security for their investment projects.

French Ambassador Denys Gauer says:

“Kirkukis obviously a special case. First its level of security problems are still relatively high but in addition to that, there is legal uncertainty.Kirkuk is part of what’s known as a ‘disputed area’, where the administrative boundary between the autonomous region of Kurdistan and the rest of Iraq has not yet been determined – meaning additional difficulties.”

Coping with just 14 hours of electricity a day, local councils are hoping to resolve the problem, by buying power from neighbouring Kurdistan.

General Manager; dept. of Electrical Distribution, Kirkuk( Yalcin Mahdi Rasheed ) explains:

“Before 2003, the province of Kirkuk consumed 180 megaWatts. Now the consumption level is estimated at 850, the electricity supply available doesn’t even cover a quarter of region’s needs!”

Besides the security, bureaucracy and social problems that discourage investment in Kirkuk, corruption is yet another obstacle to overcome, according to experts.

Mohannad Al Tae illustrates the problems the region has to combat:

“The lack of investment in the region is caused by many things: like interior conflicts between the Kurdish region and the central government over ownership of land. This reduces the investment value. Investors won’t come to a city with litigation problems or where there’s a security threat.

With international and regional concurrence, it is possible for regional countries to play a role in weakening Iraq’s investments, for them to benefit. These conflicts are well known in Turkey,Iran and the USA. Do Iraqi decision-makers really want to attract investors? Because the reality is, there are high levels of corruption throughout the country.”

Adnane Abdurahmane, economist makes his point about the region:

“We hope the economy of Kirkuk will be managed by technocrats. The case of Kirkuk’s current oil situation can be illustrated by a simple image of a cow, eating grass in Kirkuk but getting milked by other regions.”

Although local government provides investors with all the necessary facilities, they don’t help financially. But despite all the obstacles, some minor projects have been accomplished, thanks to the personal initiatives of local investors

Kak Nehro Najm Kerkuki has invested 58 million euros inKirkuk. He talk about his plans:

“I have successfully completed a lot of entertainment and housing projects. I’ve also built amusement parks and marriage halls. Its my love forKirkukthat motivates me to put up investments, I don’t want to invest in other cities. My current project is a housing development called Noorcity and we’ve already made deals with Italian developers.”

Many local investors are defying the potential pitfalls and risks to personal safety, remaining resolute in their plans to succeed in Kirkuk.

Wallid Khaleed talks about the darker side of local entrepreneurship:

“It was a real challenge to carry out this project and for me, as an enterpeneur, to work on construction site. Why? Because of the kidnapping. One of my relatives was kidnapped while working on site. How did the kidnapper know he was our relative? We had an employee who had been working with us for 25 years. We trusted him but he betrayed us. He ate and drank with us every day, all the while plotting against us. They kidnapped him and then they killed him.”

Kirkuk may have its fair share of problems but its potential is undeniable. But with foreign investment still hesitant, could local entrepreneurs provide the key to kickstarting its as yet, untapped economy.

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