Consequences of Kurdistan’s oil dependent economy

4/1/2021 18:38:00

During my early years at school, “Oil Curse” was the term I heard repeatedly, but was incapable of comprehending exactly what this famous expression that is customarily labeled the Arab States or better to say the oil rich nations implied. Eventually, I have figured out that the curse spanning from Oil is dealing with my society and those of our neighbors in the region. Apparently, oil curse refers to the disadvantageous ramifications it institutes in an oil dependent society in terms of economy, education, politics,…etc. it is the paradox that although such peoples have plenty of natural resources and must in line be rich with respect to economy but conversely such states have less economic growth, less democracy and poor economic performance than those with fewer natural resources. Indisputably, undermining considerations to the unfavorable consequences that a sole “oil dependent economy” brings to society can evidently bring about a passive and to a large range an illiterate community. 


With that being said, laziness, ignorance and illiteracy can immeasurably be noticed in the oil dependent states “Middle Eastern states in our case”. People in this part of the world do not seem to concern about industrialization, technological advancements and inventions, thanks to the incalculably flow of money that is although not equally distributed among the civilian population, but yet brings about a passive society. The Kurdistan region “Iraqi Kurdistan” is with deep regret similar to such oil dependent states. Within the collapse of Saddam Hussain’s regime and in the aftermath of the formation of Iraqi constitution, Kurdistan became an autonomous and federal region within the new Iraq and hence in 2006, Kurdistan started out investing oil in its territories while giant companies were invited to explore oil and invest. Kurdistan has as a matter of fact, been prosperous in discovering and exporting its own oil, but failed to bring forth an advanced and well developed economic system independent of oil alone. In other terms, Kurdistan Regional Government must have from the start sought to look for other alternatives in the process of building the foundations of its economy than merely relying on oil that brought about the curse I am addressing here. 


In terms of economy, one of the implications of Oil dependence in Kurdistan was what we have seen after the oil price fall downs in 2014. KRG subsequently reduced the amount of the salary it used to provide to its employees to a quarter of the usual amount. From the moment the paychecks were reduced, it was said that Kurdistan has been undergoing in a constant state of economic crisis up to now. Thus, it is the result of Oil Curse and that KRG was unaware of constructing a powerful and long standing economy in case of oil price drops. Furthermore, the fact that KRG disregarded promoting substitutions to oil as the only economic source also pitched in to the sever economic circumstance Kurdistan is struggling with at the moment. The lack of time might not allow me address how reliant our people are on paychecks the government provides and that thereby passivate the people from sufficiently acquiring skills, conducting research and deal with inventions. I dare to mention that every year tens of thousands of students graduate from universities and institutions and the majority of those tend to seek in employment from government and as a result benefit from the money the government has that spanned from Oil. It is while, such class can and should instead look for other ways such as opening their own business “monopolized by political parties though”, doing research, or concern with inventing something.


So, every single person in the Middle East and in Kurdistan in Particular must be aware of the ramifications Oil Curse has on society and people. KRG must as soon as possible offer other alternatives for its economic source such as promoting agricultural sector, tourism, and more substantially industrialization than solely relying on oil. 


Ramyar Jamal




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