The Kurdish Plan To Take Out International Loans: Financial Folly?
The past year has done much damage to the economy of Iraqi Kurdistan. And late in 2014 the government of the semi-autonomous region decided it might be a good idea to borrow money from international lenders in order to make some repairs. However, as local economists and financiers point out, there are still a lot of unanswered questions to address before any such plan can go ahead.
Despite the fact that the government of the semi-autonomous northern region of Iraqi Kurdistan and Iraq’s federal government in Baghdad recently came to something of an agreement on their outstanding financial arguments about oil and money, the Iraqi Kurdish still want to try and borrow money from outside of the country.
Toward the end of last year, the Iraqi Kurdish government approved a draft law that would allow the region to bring more money through lending. Even if the dispute between Iraqi Kurdistan and Baghdad was resolved, the region would still need extra money in order to catch up with all the damage done by what was described as a months-long “financial blockade” of Iraqi Kurdistan.
However the draft of this law was never forwarded to the Iraqi Kurdish Parliament and there is plenty of controversy still around it. Some of these are legislative, other issues are political and still further issues have been brought up by the private lenders that the Iraqi Kurdish have approached.
Iraqi Kurdistan’s Deputy Prime Minister, Qubad Talabani, has said that after lengthy discussions and legal consultations the region’s Cabinet had agreed that Iraqi Kurdistan could apply for international loans. However, he also noted, that getting permission from the region’s Parliament would take some time.