The Kurdistan Region has faced economic declines for years, after Baghdad cut budget portion of the Kurdistan Region and followed 50% decreases in oil prices in 2014.
The Kurdistan Region has faced economic failures for years, after Baghdad cut budget portion of the Kurdistan Region and followed 50% decreases in oil prices in 2014. The collapse in revenue has affected quick growth that the region is experiencing at that time till now. The crisis were increased in 2015 due to a fact that some of oil exporting countries were faced the same situation in the region.
The region’s budget were send from Baghdad and 70% of the salary was spent on political prisoners, martyrs and Anfal victims, 44% of the region’s workforce were employees in the region’s government. The contradictions in the government’s statue occurred under the fact that the regional government, unlike the sovereign countries, has little to do with providing political tools. For example, in this situation, it cannot have its own currency similar to Venezuela. Moreover, apposite to the Gulf countries, the region does not have a sovereign fund to rely on at the time of the collapse in oil prices and despite the lack of revenue sources, the regional government cannot collect revenues through financial resources. By noting on the previous bonds and works in the first step, unfortunately the current Kurdistan region randomly began to decreases spends. Therefore, the government strategically derives long-term plans to implement reforms in the public sector
“The government’s actions at this stage are taking over and holding hands at an inappropriate time, similar to Greece’s economic collapse after the debt suffering in the country,” someone said.
The problems faced the government’s decision-making will appear in the ways how to decrease expenditure not merely in direct decrease of expenditure. Return Kurdistan Region to bright days before the challenge is impossible until oil prices low remain in this way, therefore, in order to reduce corruption and aids is great step.