Is Kurdistan the Next Autocracy? Petro-Dollars Lead to Corruption in Northern Iraq
A haze hangs low over the city of Erbil. Automotive exhaust and dry sand envelop the area, forming an opaque mixture that sunshine struggles to penetrate. The capital of northern Iraq’s Kurdistan Autonomous Region, Erbil operates as a de-facto independent state, with its own legislative, executive, and judicial branches. Its soldiers wear their uniforms with pride, sporting a tricolor symbol of their country sewn on to them. Meanwhile, Erbil has total control of its external and internal regional borders, just as any sovereign state would.
As a result, Erbil is separate from Iraq, and from that country’s contentious and often deadly politics in Baghdad. “Separation is a necessary step, as our representatives have only 90 seats in Iraq’s parliament (out of 700 plus). Thus we have absolutely no voice in what is going on,” said Abdullah, who owns a travel agency in downtown Erbil. “They often say we will give you money for this and this, but we want you to do this and that,” he added. “We, the Kurds, find this unacceptable, as so many people have died so things will not be the same as before anymore.”
The sentiment Abdullah expresses prevails among Kurds who are now, for the first time in history, living in a state they can call their own. As the newest petro-state, Kurdistan has enjoyed an unprecedented level of political and economic stability since the end of the first Gulf War in 1991. And for the first time ever, the Iraqi Kurds’ economic fortunes are on an upward trend, especially in comparison with their co-patriots in neighboring countries, as a sea of oil revenue has lifted most economic boats.
Yet not all is well in Kurdistan, due in part to the dominant presence of one ruling family. Descended from a political dynasty that has built a power base over centuries of fighting, regional president Massoud Barzani has blossomed into an authoritarian ruler not unlike many whose regimes are now crumbling from the internal pressures of the Arab Spring.
Throughout Erbil, portraits of Barzani adorn the walls of offices and shops. That is not to say that Barzani’s cult of personality is as force-fed as Saddam Hussein’s often was in Iraq. The Barzani clan has tremendous popularity in the area of its political base in northern Iraq, and people feel a genuine reverence for Massoud, whose father led uprisings against Hussein in the 1960s and ‘70s.
However, the cracks in the family’s image are accentuated by political dissent, and the official story of the ruling Kurdish Democratic Party’s (KDP) road to power has often been challenged. “The people were the ones who first fought in the city and defeated Hussein’s troops in 1991’s revolution,” said Adar, who runs a small hotel downtown. “The Peshmerga [militia] came down two days later from the mountains after it was all over and claimed the power. This is the truth that many people in Erbil are afraid to speak of,” he said.
The fear to speak out is real, as KDP has both limited tolerance for criticism and a long memory. In December 2005, Kamal Qadir, an Austrian scholar, was arrested and sentenced to 30 years in prison for a series of articles criticizing the Barzanis’ hold on the economy and power. He was released a year later after prolonged action to free him by Amnesty International and the Austrian government.
However, Kurdish journalists Soran Mama Hama and Sardasht Osman were not so lucky; they were gunned down for writing about corruption by the political class and local governments. Demands for thorough and transparent investigations were met by Kurdish authorities maneuvering to blame others for the deaths; to this day both cases remain unsolved. Even a brief expression of criticism toward the Barzanis, such as one anonymous caller’s comments on a television call-in program, resulted in a bombing of the studio the very next day. As usual, the perpetrators were never found.
One of the most sensitive subjects is the Barzanis’ involvement in the economy of the newly rich oil state. While Massoud Barzani’s personal wealth is estimated to be in the range of $2 billion, the exact amount of the family’s involvement is unknown due to Kurdistan’s murky legal environment and a web of offshore cross-ownership entities. While the Barzanis often repudiate any reporting that follows the trail of money, such as a 2010 exposure by the newspaper Rozhnama that accused them of benefiting from illegal oil smuggling, the personal behavior of some family members leads to more questions than answers.
For example, in 2012, Mansur Barzani, the son of Massoud, lost over $3.2 million in a Dubai casino during the elder Barzani’s official state visit. Meanwhile the other son, Masrour, purchased a $10-million home in the U.S. state of Virginia. Officially, they were both living on modest government salaries—with Masrour heading the security and intelligence services, which are not shy to use deadly force to squash protests they find intolerable, as was demonstrated in 2011 in Erbil, Halabja, and Sulaymaniyah.
The family’s influence permeates the ruling class through a steady supply of official perks and status symbols. The symbol of the KDP elite has become a fleet of white sport utility vehicles that ply the pot-holed streets of Erbil at high speeds, unconcerned about pedestrians or other vehicles. Official and unofficial oil revenues streaming into governmental and party coffers compound a growing resentment over widespread corruption and mismanagement.
Signs of extreme poverty compete with these images of imported luxury goods. The contrast is easily visible at the grand bazaar in front of Erbil’s famous citadel. Women carrying small children sell chewing gum to passersby in order to retain what remains of their dignity. “Life is very hard here,” said a woman holding a toddler. She declined to give her name as she approached me. “You wouldn’t know it because you are not from here. But believe me, every day of my life is bitter.”
The KDP and its historical rival, the Patriotic Union of Kurdistan (PUK), have created interlocking mechanisms of power distribution and execution that put both of them in the driver’s seat at the same time. The balance is often altered slightly in favor of one or the other party, depending on the individual at the helm. In the Barzani clan’s case, the money trail reinforces ancient tribal allegiances and connections, making a de-facto “democratic” Barzani dynasty possible.
The dysfunction of organized corruption is most visible in economic sphere. “The Barzanis and [current Iraqi President Jalal] Talabani’s PUK own most of the lucrative businesses in Kurdistan. Mobile phones, big shopping malls, non-transparent oil deals. No one exactly knows where the oil income goes,” said Ari, editor of Austria-based publication Ekurd.net. The degree of rapaciousness at the expense of the public interest is often taken to grotesque proportions. In one example, a party-dominated cell phone company made huge profits by charging enormous sums for SIM cards, even when cell phone reception didn’t work.
A State of Schizophrenia
Large amounts of petro-dollars coming into the economy are increasingly resulting not only in a growing divide between rich and poor, but also a national state of schizophrenia with curious contradictions. “Having a look at the hospitals and their services, which are very poor, one cannot help but say ‘where does the oil income go?’” said Ari. “Despite exporting over 150,000 barrels per day, Kurdistan is still importing over 80 percent of the fuel it needs from Iraq, Iran, and Turkey,” he concluded.
The Barzanis tout break-neck land development and new construction as a monument to Kurdish independence, with new malls, shops, public buildings, and homes popping up everywhere. The mass construction along the 100-meter ring road in Erbil is creating a Nevada-like environment of gated hamlets for educated elites and expatriate foreigners. It is widely understood that any major building project has to have some type of business connection with the Barzanis, who are pivotal to the permitting process. Their involvement decides whether the construction will be a commercial success or an utter failure.
The rapid construction of this new Kurdistan results in architectural curiosities. The micro-climate of the West is often replicated in mass real estate offerings that have nothing to do with social and economic realities on the ground. Colonies like Royal City, English Village, American Village, and others, along with the wholesale import of fast food restaurants, have absolutely nothing to do with local culture or people. This disconnect also extends to parts of government. For example, the foreign affairs office is conveniently located next to a foreign settlement called Italian City, thus making the trip downtown to witness the uncomfortable truth unnecessary.
According to the 2012 report on Erbil from Associates for International Research, Inc., “The distance from the center to the outermost ring (100m Street) is approximately 2.5 miles. However, there is little need for expatriates to venture into the center of town, since most expatriate shopping outlets and housing compounds are located along or near 100m Street, or the outer ring. The Ainkawa neighborhood, or Christian quarter, is located in the north of the city.”
As one Western NGO worker who preferred to remain anonymous commented, “This is the effect of globalization, parachuted by nuts and bolts into Iraq, and is as magical as Walt Disney’s or Universal Studios’ version of life in that part of the world. All that is missing is Ali Baba and The Forty Thieves, but even this can arranged.”
Many Kurds sigh in resignation that this is a symbol of the Barzanis’ rule and expect it to continue without interruption. This is one possibility, but others are harder to predict.
A member of parliament in Iraq’s ruling party recently accused the Kurds of seeking to partition Iraq along ethnic lines and warned that the government in Baghdad would not tolerate it. Many Kurds are increasingly seeing themselves as caught between a rock (their government) and a hard place (Baghdad). “Prime Minister Maliki is a little Saddam. He will not stop in getting all of Iraq’s lands together as before. He will also come here, but he knows that Kurds will fight hard. We have no other choice,” said Adar, who works at the grand bazaar in the center of Erbil.
It would be a stretch to think that Western governments remain unaware of Kurdistan’s power dynamics. Many of them have consulates in Erbil where developments are constantly being monitored and reported on. Yet the race to profit from oil and tap a growing consumer market pushes other considerations—such as human rights and the application of democratic principles—into not even the backseat, but as far back as the trunk of a speeding car with Kurdish license plates. The ultimate tolls on this highway to prosperity will be paid not by the driver but by its passengers, the Kurds, with growing evidence that the final destination is different from what had been advertised.