Shafaq News / Between 2004 and 2014, the Kurdistan Region underwent a qualitative shift that altered its urban characteristics and made it the focal point of finance and business for a decade.

Observers were upbeat, describing the Region's growth as an "economic miracle" that paved the way for Kurdistan to become the Middle East's Hong Kong.

Despite this optimistic outlook, the financial crisis that ravaged the Region for the past two years, amounting to a shortage of staff salaries, has raised many concerns.

Oil revenues are Life's backbone..

"Kurdistan, like Iraq as a whole, continues to rely almost entirely on oil revenues. It is estimated that it exports more than 500,000 barrels per day through the Turkish port of Ceyhan," economist Hawri Fakher stated.

The Region is a consumer market

Fakher stated that the economic shift in Kurdistan was achieved through tens of billions of dollars invested in real estate and infrastructure sectors, at a time when agricultural, industrial, and craft productive sectors were of little importance.

"Thus, the Region became a consumer market for products from Turkey, Iran, and China - the Region's three most important partners, each with an estimated market share of at least 30%. Furthermore, Kurdistan imports more than 95% of its goods."

Ever-lasting conflicts with Baghdad

After a 10-year economic recovery, Kurdistan was hit by a whirlwind of major crises, including low oil prices, the war against ISIS, and the crisis with Baghdad.

"Disagreements with Baghdad over issues relating to oil exports and Kurdistan's internal imports have primarily caused the Region's economic setbacks. As a result, the Region's economic reality deteriorated, resulting in stagnation in domestic investment, the termination of hundreds of projects, and the bankruptcy of hundreds of businesses, "Ahmed Ali, a public relations specialist, elaborated to Shafaq News Agency.

Suspension of 6,000 projects in al-Sulaymaniyah

In 2017, the provincial council of al-Sulaymaniyah, Kurdistan's second-largest city, announced suspending approximately 6,000 strategic service projects; additionally, hundreds of contractors have declared bankruptcy in the last three years.

"Some 6,000 strategic service projects have been suspended due to the financial crisis that Kurdistan has been going through for three years," said Khadija Abdul Jabbar, head of the projects committee of al-Sulaymaniyah Provincial Council.

Nine hundred companies shut down

The Kurdistan Federation of Industrialists has also declared the bankruptcy of 800 to 900 of the 1,280 companies in al-Sulaymaniyah governorate, and nearly 1,000 projects have been halted so far.

"The prevailed situation was good before ISIS, but they were forced to stop working. When they were on the verge of resuming normalcy, the COVID-19 pandemic struck, curbing all their efforts," said Mohammed Atta Abdullah, vice president of the Federation of Industrialists in al-Sulaymaniyah.

He added that increasing taxes on companies has also contributed to their suspension.