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Prime Minister Barzani: Kurdistan Has Strong Potentials For a Bright Future

nechirvan barzani economyThe Kurdistan Regional Government and the World  Bank Group launched the roadmap for structural economic reform on Monday. Below is Following is the full text of Prime Minister Nechirvan Barzani’s speech during the launch of the roadmap:

Dear guests,

Ladies and gentlemen,

Please allow me to welcome President Masoud Barzani; it’s an honor to have the President with us here today. The President has been extremely busy in the last few days with the military operations in the Khazir front against the ISIS terrorists, and his presence here today demonstrates his strong support for the Kurdistan Regional Government’s (KRG) economic reform plan.

Good afternoon, I welcome you all to this event, which is of significant importance to the government and the people of the Kurdistan Region, and to the friends and partners of the Kurdistan Region.

The announcement of the KRG’s reform plan, which is prepared in cooperation with the World Bank, the United Nations, local and international institutions, and the KRG Ministry of Planning, demonstrates the determination of the KRG to conduct meaningful reforms and to improve the life of the people of Kurdistan Region in all aspects.

You are all well aware of the fact that the KRG has been dealing with multiple challenges that are facing the Kurdistan Region, such as the cut of KRG’s share of the federal budget by Baghdad in the beginning of 2014 and the imposed war by the ISIS terrorists which has opened a frontline of 1,100 kilometers.

In addition to the daily cost of the war against ISIS, more than 1.8 million Iraqi displaced people and Syrian refugees have taken refuge in Kurdistan Region. Only in 2014, we faced a 28% increase in our population. Such an increase in the number of population has placed a tremendous burden on the KRG in every sector including security, health, education, water, and electricity. The last but not least, the hardest hit to our economy was the falling oil prices.

The above-mentioned factors, which triggered the economic crisis in Kurdistan, were beyond of our control.  However, as I have said in numerous occasions, this is not to claim that the financial and administrative system of the KRG was flawless. That’s why the KRG has adopted short-term, mid-term, and long-term plans to conduct structural reforms.

We have plans to confront the challenges and financial crisis facing us, to diversify our economy, to reduce dependence on natural resources, to improve other sectors such as agriculture, industry, tourism, transportation, communication, trade, investment, and to increase the role of private sector in our economy. We will do whatever it takes to achieve these goals, and we are in need of the support of international institutions and our friends in the international community to help us achieve our objectives.

Ladies and gentlemen,

The financial challenges facing Kurdistan have had an adverse impact on our economy and halted our economic growth. Urgent measures taken by the government such as withholding an amount of the salary of the public employees, borrowing money from local and foreign companies and banks, and other measures are just urgent steps taken to control the crisis; we cannot depend on them as long-term solutions.

The government, therefore, is in need of a roadmap that is based on best international standards to conduct structural fiscal, financial, and administrative reforms in cooperation with relevant international institutions. A roadmap that will protect the vulnerable, create job opportunities, bring about social protection, and resume economic growth of Kurdistan Region.

We are very grateful to the World Bank for supporting the KRG in formulating the plan and we hope that the World Bank and other international institutions would provide technical support and help us in the implementation phase of the plan as well.

Dear guests,

A principal pillar of the KRG’s reform plan is to make sure that public sector is no longer the dominant sector in the Kurdistan Region, and to create more opportunities for private sector in all fields. We plan to aim private sector activities and foreign and local investments towards agriculture, industry, tourism and other sectors. This way, we can reduce employment demand in the public sector and create better employment opportunities in private sector. In order to achieve that, the government will take necessary measures to encourage private sector employment and reduce the size of public sector.

The recent measures taken by the KRG, as part of its reform plan, such as reducing spending, increasing revenue, reducing electricity subsidies, enhancing transparency on revenue and expenses, allowing international monitoring of revenues and expenses, and other measures have been acknowledged by relevant international institutions. But we need to continue our reform efforts; the Kurdistan Region is in great need of a comprehensive reform plan.

Another major pillar of the reform plan is to improve public administration sector in general and public financial sector in particular. We need to revisit the government’s financial administration system and the private banking sector in order to bring about a world-class banking system that could become the backbone of the private sector. Only 3% of private sector projects are funded by the banks, we need to change that, so that private sector companies will be more willing to choose private banks for implementing their projects.

In other words, the KRG will strike a balance between the public sector and revenues; will work for economic diversification with the support of private sector. In this way, the government will be able to successfully overcome the financial difficulties and gradually build a stable economy, paving the ground for a lasting growth. Securing these objectives requires the existence of two main pillars, stabilizing the economy and building a strong foundation for viable growth. The government should conduct financial reforms in a way that strengthen its financial capabilities in terms of stabilizing the operating expenses, and to enhance its budget stability in the medium and long terms.

It’s true that the challenges have hurt the Kurdistan region, but at the same time we are provided with a golden opportunity to address our shortcomings and conduct comprehensive reforms. There’s a saying “what doesn’t kill you, makes you stronger.” We are in the same situation. The crises are hurting us but they are not able to kill us. We will come out of these challenges stronger than ever before. These difficulties are good lessons for our people and the government to make concerted efforts to bring about meaningful reforms and improve the conditions in the Kurdistan Region in all fields.

Kurdistan has great potential to overcome its current financial difficulties and resume its path towards growth and prosperity. Abundant natural resources, fertile land, young population, a region that can become a regional and international trade hub, a government that is determined to conduct reforms, a supportive community, stability and security; these are all strong indicators of our great potentials. We can use our potentials in an effective manner with the assistance of our friends and international institutions.

When all the above-mentioned factors are used in an effective manner, the economy of Kurdistan Region will have a great chance to overcome the current challenges, diversify its sources, and secure medium and long term growth. The KRG reiterates its commitment to expedite the process of economic diversification and economic growth.

Ladies and gentlemen,

Regardless of how carefully a plan or a program is prepared, failing to implement the program is always a possibility. The ongoing fight against ISIS terrorists, outstanding issues between Erbil and Baghdad, financial crisis, internal political disagreements and many other factors can be considered as obstacles to the implementation of our reform plan. However, with the help of the World Bank and other international institutions, the KRG has the will and determination to fully implement its reform plan, I am very optimistic that we will succeed.

I would like to seize this opportunity to assure international companies, especially the international oil companies that the KRG is fully committed to honor its financial obligations as agreed upon.

I would also like to thank the leaders of the G7 countries who were convened three days ago in Tokyo, Japan, for announcing in their final statement that the Kurdistan Region will benefit from the assistance that will be provided to Iraq. I would like to express my appreciation to Mr. Hushiyar Zebari, Iraq’s minister of finance for securing international financial support for Iraq and the Kurdistan Region.

I want to mention that in the past 10 years, the Kurdistan Region along with other parts of Iraq contributed to paying off Iraq’s debts, including compensation for the invasion of Kuwait and the debts of Paris club. This is despite the fact that we, the Kurds, were the victims of the Baath regime. The Iraqi government in 2015 borrowed $1.2 billion from the World Bank. Iraq is trying to borrow another $15 billion from the World Bank and the International Monetary Fund. We request that the Kurdistan Region will be given its fair share.

As for outstanding issues between Baghdad and Erbil, the KRG is committed to resolve all disputes through dialogue and negotiation, and we hope to see an end to the political crisis in Baghdad.

At the end, please allow me to thank the World Bank, UN, and their agencies, local and international institutions, KRG Ministry of Planning, the Minister of Planning and his team, and all those who participated in the preparation of the reform plan.

I would also like to send my deepest condolences to families and friends of our fallen heroes; those who have sacrificed their lives in the fight against ISIS terror, especially the martyrs from yesterday’s fight, including the uncle of Mr. Zagros [Fatah, the supervisor of Ministry of Planning’s reform plan].

Again, I send my heartfelt condolences to the friends and families of all those who sacrificed their lives to protect Kurdistan. I wish a speedy recovery to the wounded heroes.  We will continue to defend this land until victory is achieved.

Thank you all.

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