Af1991 uprising of Kurdistan and particularly in 1994 Kurdistan regional Government (KRG) launched his efforts specifically by late Mam Jalal former Iraqi president to increase the Kurdistan economy sources beside ordinary customs and internal revenue.
In 1994 till the demolished Baath regime, by an immense efforts of Late Mam Jalal and KRG three oil contracts have been signed in Taq Taq fields with Genel Energy, which one of the contracts has been signed by himself. These contracts lead oil and gas to become basic economy source of KRG. Afterward the ruin of Baath regime and approved of Permanent Iraqi Constitution in 2005 and establishing the equal rights for Kurds and Arab in managing oil and gas in Iraq, the late Mama Jalal took place the huge responsibility in the writing constitution draft.
Kurdistan parliament issued oil and gas laws number 22 in 2007, by depending on this law KRG could be able to sign 57 oil contracts with 57 enterprises. Again the late Mam Jalal had significant roles in these contracts. In my opinion, I believe that until the illness of him, the process of oil contracts were going on very well. Furthermore, I consume that KRG was in rush to announce his economic independence.
By concerning to the title of the topic, I believe that it would be wrong to say that oil has negative roles in developing Kurdistan region. I think the oil has essential roles in proceeding Kurdistan economy. But the matter is the KRG authorities merely depend on oil for the region’s revenue while around the world the only one source is not quite enough for the economic source because oil alone cannot replace other sources.
The solution for Kurdistan budget problem
The KRG must work hard to fill the budget shortfall by deriving a strong financial plan. Through foreign and local investors find diverse economic source for the region. Meanwhile, he has to escape himself from a part of Iraqi economy and neighbors countries as well. These are some examples of states that depend on oil alone to fill the budget shortfall:
1.Russia: commonly 40 per cent of the oil producers depend on oil for their budgets except (Kurdistan region, Baghdad, Nigeria and Congo). For a state like Russia, if per barrel oil price reach 40 USD he will not face budget shortfalls.
2.Saudi Arabia: for a state such as Saudi Arabia, if per barrel oil price reach 80 USD he will escape from his budget shortfalls.
3.Kurdistan region: per barrel price should to reach 300 USD and then Kurdistan region can prepare a budget without shortfalls for his salary distribution and usage budget except investment. There is impossible to happen, therefore, once again I am saying “there is not a fault of oil and gas, but it belongs to aimless of KRG and ignorance of other fields”. We have a Kurdish proverb which equivalent to “Do not put all your eggs in one basket” therefore, the KRG should not merely depend on Baghdad to send his budget because Baghdad by himself is involved with numerous financial troubles which obliged him to call International Bank for more than 6 Billion USD to receive as loan.