Prime Minister: ‘Kurdistan open for business’

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Prime Minister: ‘Kurdistan open for business’  By Tanya Goudsouzian June 1, 2006 Erbil (Soma Digest) 

KRG Prime Minister Nechirvan Barzani reveals his ambitions to turn the Kurdistan Region into the ‘commercial gateway of Iraq’. 

The Kurdistan parliament will soon pass a new Foreign Investment Law, which will ensure “equitable treatment for all investors” and offer incentives for foreign businesses to come to the Kurdistan Region, said Prime Minister Nechirvan Barzani in an exclusive interview on 22 May. 

While he did not say whether it would entitle foreign investors to own 100 percent of their Kurdistan operation, and repatriate profits without restriction, he stressed that the new law would be "characterized by fairness, equitable treatment for all investors, appropriate legal guarantees and, of course, incentives for foreign businesses to come to our region." 

“We will do all that we can to encourage foreign investment so that the Kurdistan region becomes the commercial gateway to all Iraq,” he said. 

“The Kurdistan Region is open for business! We have many needs and thus many opportunities. Nearly everything we use and consume, including much of our food, is now imported from abroad. We need foreign investment in every area of our economy, and my advice is: come here, look at our markets, our people, and our infrastructure, and help us to build our economy…. Fly into our new airports, drive our improving roads, and bring your expertise and knowledge. You will not be disappointed.” 

During an hour-long interview, the first elected prime minister of the unified government of the Kurdistan Region spoke with startling candidness on a number of controversial issues, such as allegations of family monopoly, press censorship and ambiguous succession policies in the two main Kurdistan parties. 

“Each party has its own mechanism for transferring power, but I do believe that both parties must take measures to pave the way for the participation of our youth,” he said. 

“It is natural for youth to participate in politics and political parties otherwise it will be to the disadvantage of the parties…We need more openness and participation in our parties and I am committed to working to modernize our political system.” 

He described the Kurdistan Regional Government's (KRG) relations with thefederal government as "not clear" as federalism is still very new for Iraq. 

“So far, relations between the KRG and the federal government have been limited to contacts between the KRG and the prime minister’s office in Baghdad and some Iraqi ministers,” he said. 

“There is no institutional framework. We seek clear mechanisms to be instituted that promote and regulate relations between the KRG and the federal government in Baghdad in accordance with the Constitution of Iraq.” 

With regard the revenues from the new oil fields in Zakho and Taqtaq, Barzani said the revenues would be shared with Baghdad as per the constitution, but the sharing formula is yet to be determined. “The Constitution of Iraq makes it clear that old oil wells will be managed by the federal government in Baghdad while new oil wells will be managed by the regional government in coordination with the federal government,” he said. 

“We have not yet determined the revenue sharing formula and will continue our discussions with Baghdad on this issue,” he said. 

KRG Prime Minister Nechirvan Barzani speaks frankly about allegations of corruption, Iraq's experiment with federalism, revenues from new oil wells and the margins of press freedom. 

Nechirvan Barzani has been the golden boy of the Kurdistan Democratic Party (KDP) since the untimely death of his father, Idris. Today, as the first elected prime minister of the unified government of the Kurdistan Region, the 39-year old is the archetypical politician – a broad smile, a firm handshake and a perfectly tailored suit. 

Any preconceived notions about this scion of the ruling Barzani family are left at the doorway of his plush office, as he ushers in his guests with a welcoming smile, and graceful chitchat. His English bears a faint trace of the melodious Tehrani accent, probably a remnant from his days as a student in Iran. 

During an hour-long interview on 22 May, Barzani spoke with startling candidness on a number of controversial issues, such as allegations of family monopoly, press censorship and ambiguous succession policies in the two main Kurdistan parties. "Anyone who calls himself Barzani may not necessarily be related to the family," he exclaimed, with a hearty laugh. "It is a big clan. If you ever visit the Barzan area you will find many people who call themselves Barzani but who areunrelated to the family." 

He said work is underway to pass a new Foreign Investment Law, which "will be characterized by fairness, equitable treatment for all investors, appropriate legal guarantees and, of course, incentives for foreign businesses to come to our Region". 

And, he stressed his ultimate objective to turn the Kurdistan Region into the "commercial gateway of all Iraq". 

On what basis were the posts in the new Kurdistan Region cabinet allocated, technocratic merit or regional representation? 

Let me first say that the formation of the new Kurdistan Region cabinet was a major success, but we must be realistic. We can’t say that all members of the cabinet are technocrats, nor can we say that they are all party members. Both the KDP and the PUK agreed that the posts had to be allocated to individuals who have potential as well as an understanding of the circumstances in the Kurdistan Region. Such people are not necessarily technocrats. Our situation requires people who are aware of the realities on the ground. 

Can you tell us about these realities? 

The Kurdistan Region has been through different circumstances. I can’t bring someone from abroad who has stellar professional qualifications to be a minister here if he doesn’t have a realistic understanding of the sensitivities of our situation. It is better that we have someone who has a measure of technocratic abilities, but is very aware of the situation in the Region. For example, the Minister of Health, Dr Abdul Rahman Osman Younis. He was a peshmarga, but he is a doctor who lived in London for a long time. He is qualified and he is aware of the situation here, and taking into consideration other qualities, we believe he is a good candidate for the position. 

How democratic is the succession mechanism in the two main Kurdistan parties, KDP and PUK? And, how much opportunity are the youth given to rise in party ranks? 

The two political parties have played a great role in the Kurdistan Region in providing security and services to the people of the Region, and they have faced great problems. Each party has its own mechanism for transferring power, but I do believe that both parties must take measures to pave the way for the participation of our youth. 

It is natural for youth to participate in politics and political parties, otherwise, it will be to the disadvantage of the parties. 

But you must understand that when Saddam was in power, our future was uncertain and we were not able to fully engage our youth. After the removal of Saddam, the situation is now conducive and both parties are considering ways to bring our youth into the political process. 

For example, a number of young people attended the last KDP congress, and in its next congress the KDP intends to include and invite young people to take part and join the political leadership. I wish to add that we need more openness and participation in our parties and I am committed to working to modernize our political system. 

What do you make of reports that a growing number of young people in the Kurdistan Region are turning to Islamist parties as an alternative to the two ruling Kurdistan parties, which they may feel have not given them enough social or economic opportunities? 

I think such reports are exaggerated, and I don’t think it is happening to such a large extent. First, the Kurdish question is not a religious one. It is a national question. Certainly, Islamist parties are there, and they have their activities within the democratic climate provided here in the Kurdistan Region. 

How would you describe the KRG’s relationship with the federal government in Baghdad? 

To be honest, so far, the relation between the KRG and the federal government in Baghdad is not clear. And the reason for this is that the federalism model is new for Iraq. 

According to the new constitution, federalism has been accepted and recognized. But so far, relations between the KRG and the federal government have been limited to contacts between the KRG and the prime minister’s office in Baghdad and some Iraqi ministers. 

There is no institutional framework. We seek clear mechanisms to be instituted that promote and regulate relations between the KRG and the federal government in Baghdad in accordance with the Constitution of Iraq. 

And we have faced some problems. For example, whenever there are training courses or scholarships abroad offered to Iraq, the federal government tends to ignore the Kurdistan Region. Or, whenever medicine is purchased, they do not ask us what we need here, but simply make a bulk order and send us whatever they think we need when the needs in the Kurdistan Region may not be the same as the needs in the south; there may be some differences in health priorities. They don’t do enough study; they do not consult with us. 

This is occurring because federalism is very new to Iraq, and we need time to develop necessary mechanisms and to learn how to work within a federal system. And we need more transparency. 

Regarding Kirkuk, what happens if the referendum goes in favor of becoming part of the Kurdistan Region but Baghdad does not accept it? Is there a potential compromise, cohabitation answer? 

That would be a flagrant breach of the Constitution of Iraq. The Constitution treats the cases of Kirkuk and other disputed areas. We now seek implementation. I hope it will not go to this, and that steps are taken to resolve the matter. Kirkuk was taken from us by force, but we will use the peaceful democratic process to regain it. We are patient, but this is an issue that more time will not solve. It requires action in accordance with the Constitution. 

There have been reports that Shiite gunmen are infiltrating Kirkuk in order to thwart any attempt at normalizing the demographics? 

I can’t confirm this information, even if it is the case. All I can say is that, so far, no practical steps have been taken to normalize the situation. We have taken this concern and complaint to Baghdad. Everyone admits there is a problem, but no one is ready to do anything about it. It is a mistake to assume that more time will resolve the issue; more time only further complicates the issue. 

The Iraqi government in Baghdad should solve the problem in accordance with the Constitution. If by 2007 concrete steps have not been taken to rectify the situation in Kirkuk, we cannot have a fair and just referendum to determine the fate of that city. 

What policies are in place to deal with the internally displaced persons(IDPs) still living in squalid camps? 

Authorities and other informed people, including international authorities, agree that those who were forcibly dislocated have the ‘right-of-return’. 

In the meantime, our officials and local and international NGOs have been providing limited assistance to help meet essential needs while urging a proper and correct resolution of this unacceptable situation, in accordance with the Constitution. 

These families have been paying a terrible price for the delay. The KRG feels a special responsibility toward those who have suffered and who have been persecuted, and we look forward to a day when such substandard living conditions no longer exist, and when all peoples of our region are safe, at work, and living in their own homes. 

What is the position of the KRG on the recent Iranian shelling of Iraqi Kurdistan territory? Does the KRG consider this as interference in the Kurdistan Region or Iraqi internal affairs? 

We call on our neighbors to respect Iraqi sovereignty, and at the same time the Kurdistan territories should not be used for hostile acts against our neighbors. 

The Iraqi Ministry of Foreign Affairs must raise this issue with Iran. 

To what extent is the KRG cooperating with the federal government with regard to the drilling of oil in Taqtaq and Zakho? Where will the revenues go? 

We must remember that these are projects that had begun even before the fall of the previous regime. The Norwegian company operating near Zakho and the companies near Taqtaq signed contracts before the war. 

All activities after the war have been undertaken in coordination with the Ministry of Oil in Baghdad, and we have the documents to prove it. 

The Constitution of Iraq makes it clear that old oil wells will be managed by the federal government in Baghdad while new oil wells will be managed by the regional government in coordination with the federal government. 

We have not yet determined the revenue sharing formula and will continue our discussions with Baghdad on this issue. 

The new KRG claims to be clamping down on corruption. Is this compatible with the huge concentration of commercial interests in Barzani hands (Korek, Kurdistan Development Corporation)? 

We are a big family. Maybe members of the family do own companies, but this is not the case for family members who are KRG officials. Besides, anyone who calls himself Barzani may not necessarily be related to the family. It is a big clan. 

If you ever visit the Barzan area you will find many people who call themselves Barzani but who are unrelated to the family. This misunderstanding causes problems for us. 

The Kurdistan Development Corporation (KDC) is a public, not private, enterprise to stimulate and support economic investment in the Kurdistan Region. 

And corruption is not something limited to the Kurdistan Region alone. But we are very serious in fighting corruption. We are preparing to form a committee to deal with it and we intend to take concrete steps in the future to bring this problem under control. 

What about the Foreign Investment Law – will foreign companies be entitled to own 100 percent of their Kurdistan operation and repatriate profits without restriction? 

We’ve been working on a new Foreign Investment Law which is at the KNA and we hope to have it approved shortly. This law will be characterized by fairness, equitable treatment for all investors, appropriate legal guarantees and, of course, incentives for foreign businesses to come to our region. 

Direct foreign investment is vital to our future; it creates jobs, leads to the transfer of technology and know-how, and helps our own businesses to learn better practices and standards. 

We will do all that we can to encourage foreign investment so that the Kurdistan Region becomes the commercial gateway to all Iraq. 

It is too soon to comment on specifics, but I think you will find that our investment law will be among the best in this part of the world. 

What advice would you offer a foreign investor seeking to do business in Kurdistan? 

In a sentence – the Kurdistan Region is open for business! We have many needs and thus many opportunities. Nearly everything we use and consume, including much of our food, is now imported from abroad. 

We need foreign investment in every area of our economy, and my advice is: come here, look at our markets, our people, and our infrastructure, and help us to build our economy.  You will find a friendly, hard working region where the government and people will welcome you with open arms. Fly into our new airports, drive our improving roads, and bring your expertise and knowledge. You will not be disappointed. 

You’re planning a Media City similar to the one in Dubai. Does this mean you will enact new press freedom laws? How does this sit with the scandal over Kamal Sayed Qader? 

The Media City is still a concept. As you know, we are in the process of drafting a constitution for the region, and in that constitution we will make provisions addressing important issues such as the rights of the media, women, and religious freedom. 

With regard to Kamal Sayed Qader, it has been reported that he was imprisoned for writing negative things about President Masoud Barzani. But the fact is not like that. The truth is, what he wrote would not be allowed in any democratic country, not even in Western Europe. His writings were libelous by any standard. But Qader was arrested on charges of libel under the old Iraqi law and the sentence was excessive. I was in the US at the time. Had I been here, within the law I would not have allowed his arrest. When I returned from the US, I immediately began action within the law to have him released. In the proposed regional constitution, we will examine the issue of press freedom with a view toward ensuring that journalists are given more freedom, not less. Qader is now in Austria; I understand he is planning to return to the Kurdistan Region and he is welcome. 


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