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June 14, 2010
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Kurds, Oil and International Political Economy
Kurdishaspect.com - By Saeed Kakeyi
The influence which Britain and Russia, had in Persian and Ottoman affairs was due to have a continuing access to the Persian Gulf along with their economic market exploitation objectives. For the Brits securing the “Silk Road” between India and Europe through Kurdistan, had all reasons to keep the Kurds apart and weak. As for the Russians, the unhappy Persian-Ottoman Kurds were a critical element in helping gain territorial advances and to keep its southern rivaling neighbors of Turkey and Iran preoccupied with internal affairs. However, to the Kurds’ dismay, the Russo-Turkish war of 1877-1878 “brought devastation, famine, and general hardship accompanied by disease, banditry and violence, especially in north and southern Kurdistan” (Olson: 1991, 5).
With the discovery of oil in 1908, the policies of the colonial powers of Britain, France, Germany and Russia changed and they viewed the Middle East region with greater economic interest than before. Kurdistan gained a strategically important place in their international politics prior to the onset of the World War One (WWI). As a matter of fact, the Brits promised the Kurds an independent Kurdish kingdom in return for their opposition to the Turkish-German alliance (Ahmad: 1984, 31-40). Parallel to this policy, the British diplomats initiated a string of negotiations which resulted in maintaining normal relations between the Persian and Ottoman empires. In return, Britain secured the rights to extract and trade oil in their respective territories.
Oil and the Kurds in the 20th century
The 20th century began with a major world war, leaving in its wake a dismantled Ottoman Empire, new states in the Middle East and the occupation of Southern Kurdistan by Britain and France. For the Kurd, this was a historical moment to achieve their ever desired nation-state. However, such a moment was not one that was meant to last, and it soon turned out to be disastrous: Kurdistan was further divided!
With the start of the Russian Revolution in October 1917, Russia ceased hostilities against the Ottoman Empire and withdrew from World War I. Thereafter, the new Soviet regime allied itself with the Turkish nationalists against the “Imperialist” West. The Turkish nationalists, who were fighting against both Western domination and the Ottoman Empire, had many reasons to accept this friendship.
This challenging diplomacy forced the Colonial Allies, especially the British; to establish puppet governments in the occupied regions of the Middle East and thought the creation of a landlocked autonomous Kurdish state would be useful to their imperial plans regarding oil exploitations. Therefore, despite of lacking a coherent political entity, the Kurds were represented at the Paris Peace Conference by an inadequate delegation (1991, 24). Nonetheless, the official representatives of the Allies and the defeated Ottomans signed the Peace Treaty of Sèvres on 10 August, 1920, envisaged a state for the Kurds.
Against all odds, Kurdish leadership of the time welcomed the Soviet-Turkish alliance and refused to cooperate with the British installed non Iraqi Arab King Faisal from Saudi Arabia. For the colonial Britain, this Kurdish negative response to Iraq’s monarch system and their blessing of the Soviet policies in Asia Minor, viewed as a direct challenge to their oil development policies in the heartland of Kurdistan. Accordingly, the Brits were quick to open talks with the Turkish Nationalists promising them the elimination of the idea of Kurdish state in exchange for the annexation of the Mosul Vilayet to the British mandated state of Iraq and to have permits to establish Western military bases in Turkey in a bid to protect the oil fields in the region against the danger of Communism (Majeed: 1997, 14).
Managing the enormous oil fields of the Vilayet of Mosul in southern Kurdistan and the Vilayet of Diyarbekir in northern Kurdistan required the British and the French coordination. Like the Brits, the French colonials too abandoned the idea of creating a Kurdish state with no access to international waters. Hence, in accordance with the Treaty of Lausanne, signed on 24 July 1923, Britain and France agreed to share the oil of Kurdistan amongst themselves by dividing Kurdistan further on newly created states of Iraq, Syria, and Turkey—each with easy access to the sea.
Consequently, gone was the law that promised to establish independent Kurdistan. Turkey still retains almost half of Kurdistan, Mosul Vilayet became a disputed subject of Article III of the superseded Treaty, and a part of Diyarbekir Vilayet was given to Syria. The word Kurdistan was not even mentioned anywhere in the Treaty of Lausanne (1991, 82).
To exacerbate the Kurdish dilemma further, in 1926, the League of Nations legalized the division of Kurdistan by resolving a dispute between Iraq and Turkey over the control of the former Ottoman vilayet of Mosul. Britain—which was awarded a League of Nations’ Mandate over Iraq in 1920—represented Iraq in its foreign affairs, argued that Mosul belonged to Iraq. In contrast, Turkey claimed the province as part of its historic heartland. As a result, a three person League of Nations’ commission was sent to the area in 1924 to study the case and in 1925 recommended the region to be attached to Iraq with a—never materialized—condition that the Britain would hold the mandate over Iraq for another 25 years, to assure the autonomous rights of the Kurds. The League Council adopted the recommendation and it decided on 16 December 1925 to award Mosul to Iraq (Kilic: 1959, 60-61).
Ever since, the Kurds in the four states became minorities with no legal economic, social and political rights. They had to live with an increasing barrage of state nationalism, be it revolutionary or reactionary, monarchist or socialist, Persian, Turkish or Arab. Emphasis on national, ethnic, or linguistic unity has only served to revive a parallel feeling among the Kurds. In the four states, many public policy statements may be made about equality of opportunity and development for all citizens and ethnic groups, but the Kurds have inevitably felt ignored, neglected and suppressed by foreign rulers from far away in the respective state capitals.
Kurdish economy
A special factor of the Kurdish economy is that it does not constitute one entity, but is split among several countries. The individual parts are isolated from one another and each part is dependent on the economy of its ruling state. Nevertheless, the mountainous borders of Kurdistan are practically beyond control, and for this reason contraband trade is widespread, particularly between Iranian and Iraqi Kurdistan. The countries controlling Kurdistan are economically linked to industrialized countries, and the different parts of Kurdistan are in turn dependent on their respective central governments, a unique situation which might explain why economic progress is so irregular and disproportionate. Kurdistan constitutes the marginal areas of these countries; therefore, it is also underdeveloped. When looking at vital statistics, it is always what the central government wants you to know, not reality. The poverty level, health care, the educational facilities and last but not least, job opportunities are not available to their Kurdish minorities unless they go through the assimilation process. In Turkey, everything is dependent on how well a Kurd is assimilated (Leezenberg: 2000, 3).
The economic bases of Kurdistan
Recent international commercial traffic between Europe and Central Asia and Turkey’s trade with Iran, Iraq and other Arab countries through Syria encourages the revitalization of the old Kurdish Trade Routes. The overland trade from the oil-rich states of Iran, Iraq and the Gulf States with European markets has revived Kurdistan as a bridge for that lucrative commerce. The heavy traffic between Turkey, Iraq and Iran passes through Kurdistan. Radical educational policies, greater cultural rights, and major road construction could provide great opportunities for many Kurds who otherwise continue to support arms struggle to achieve their goals (Izady: 1992, 15).
As mentioned before, the occupation of the majority of Kurds is agriculture; therefore, sound agrarian policy plays a crucial role in Kurdish economy. Because of the productivity of its soils, Kurdistan is one of the few regions in the world that could be self-sufficient in food production. Kurdistan possesses a variety of microclimate as well as adequate rainfall and water resources, which permit a broad range of crops, fruit and forest production, in addition to range resources to support and sustain good livestock production. However, with wrong governmental policies, agriculture failed in most parts of Kurdistan to keep up with demand. The relative poor showing of the agricultural sectors in the four states controlling Kurdistan reflect their misleading governmental policies that had made rapid industrialization of the non-Kurdish areas their first priority. As a result agriculture suffered from insufficient mechanization, lack or low use of chemical fertilizers, excessive fallow lands and unexploited water resources, all of which resulted in low yields and complicated their respective Kurdish conflicts more and more.
The Kurds have long realized the risk in the short term of insisting on an independent Kurdish state and have hoped for democratic institutions in the countries where they live. However, the state of Kurdistan remains the dream of every Kurd in this world. More than ever the Kurdish political organizations are feeling the pressure from Kurdish masses for greater commitments to the Kurdish right of self-determination including independence.
In addition to the poor living conditions of the Kurds, Kurdistan is a disaster-prone area, not only politically, but also naturally: earthquakes and floods. These situations collectively have caused migrations outside of Kurdish territories. In Turkey, quite a large segment of the Kurdish population has had to resettle in Istanbul, Izmir, Ankara and Adana. About 20 % of Baghdad’s population is Kurdish. Similarly, an estimated 15% of Tehran’s population is Kurdish. The reason for this migration is economic (Jaff: 1995, 4).
Kurdistan’s energy resources
Kurdistan’s primary energy resources is enormous and include oil, natural gas, hydropower, coal, solar energy plus other unexploded minerals, (e.g. uranium). Oil has traditionally played a major role in the economy of the countries dividing Kurdistan: it has been the primary driving force behind GDP growth in Iraq and Iran while half the Kurdish populations live in misery and backwardness. From a cursory look at the development project in those two countries, it is easily perceived that the central governments have virtually ignored the financing of projects in the Kurdish territories (1995, 4).
Both in Iran and Iraq, the oil and gas sub-sectors were particularly hard-hit by the war, with much of the infrastructure destroyed. These sub-sectors were and are the primary source of foreign exchange income. Therefore the Iranian government has been able to rebuild its oil and gas industries. The supply of natural gas from Iranian Kurdistan is abundant and its consumption is expected to increase not only for economic reasons but also to reduce environmental problems in major cities.
The population of Iranian Kurdistan constitutes 17.5% of the total, yet its share in the industrial process is a mere 3%, including oil refining. If we take into account that Iran is a developing country, the backwardness of the situation in its Kurdish regions is even starker. Conditions in the Kurdish part of Turkey are even worse according to its own State Planning Organization reports (1995, 5).
In Iraq, the situation was not much better. While the Saddam’s pan-Arab nationalist government started industrialization process in 1973, but it was concentrated mainly in the large Arab dominated cities. What made matters even worse, was the Arabization oil rich cities of Kirkuk and Khanaqin. In Iraqi Kurdistan, which was underdeveloped, continuous conflicts with the central government and lack of capital constituted the main obstacle to economic development. Although Oil and natural gas in Kurdistan account for 67% of energy resources in Iraq, Saddam’s regime denied Iraqi Kurdistan a fair share of the export and revenue.
In the aftermath of the 1991 Desert Storm, a disastrous effect befell on Iraq’s economy. Iraq’s ability to function as a sovereign state greatly marginalized. Not acting inline with numerous United Nations’ Security Council Resolutions, Iraq was put under crippling sanctions which led to the formation of the de facto Kurdish state in much of Iraqi Kurdistan which will be covered by a sub-heading in the later part of this paper.
Kurdistan’s water resources
The tributaries of the Tigris and the Euphrates, which make up the bulk of water resources in the Middle East, plus other numerous affluent, have made Kurdistan among the few watersheds of the Near East. In addition to Tigris and Euphrates rivers like Cyhan, Araxes, Karkhah, and their major tributaries spring from the mountains of Kurdistan. The regulation of the flow of river waters is for the benefits of the non-Kurdish users in the lowlands. As such, many hydraulic projects now dot Kurdish Watercourses and many more are projected. Turkey is mounting a gigantic project to tap the water which flows from the mountains of Kurdistan. It is the multibillion dollar South East Project (GAP). When finished, it will consist of 22 dams to irrigate 1.7 million hectares and will have a hydroelectric generating capacity of over 750 MW. This will create extra jobs in agriculture and should bring in a fair amount of light industry. But Kurdish experience with such dreams is that, yes, economically it is true it will create jobs but under the present circumstances the jobs will not be given to the local Kurds. The majority of the labors have been imported from non-Kurdish regions because of so-called fears of "security risks" and "terrorist threats" (1995, 6).
Turkey hopes one day to build a "peace pipeline" to carry about 2.2 billion cubic meters of water per year from two other rivers farther west, the Siyhan and the Ceyhan, which will go via Syria and Jordan to western Saudi Arabia, eventually via Kuwait to the Gulf States. Nobody realizes that these waters comes from Kurdish mountains and flows through their villages into Arab lands. Neither Arabs nor Turks admit this, nor that do the oil fields of Kirkuk, Khanaqin, Sirit, Dyarbakir and Kameshlo lie in Kurdistan (1995, 6).
It is clear that the economy in Kurdistan could have expanded faster during the last 85 years had it not been for the unwillingness of the central governments to allocate enough funds and adopt policies to remove existing structural rigidities and so provide the right institutional set-up, infrastructure and incentives.
The massive rise in the price of oil during the seventies increased the finances of Iraq and Iran but failed to provide an impetus to the growth of the Kurdish areas. In both countries, these areas continued to lag behind other regions. In Turkey, by its own government’s admissions, the Kurdish region referred, to as South-East Anatolia, is the least developed.
Needless to say, the oil boom which started in the early 1970s did not reach the Kurdish region. Indeed as of 1975, the Baghdad government started its campaign to eradicate Kurdish rural areas by destroying close to 4,000 villages, keeping the population in camps under the pretext of national security requirements. Likewise, Turkey’s Kurdish village destructions and forced mass movements of Kurdish populations near the oil fields of Sirit and Dyarbakir is ongoing for several years under the eyes and the ears of the NATO countries with the pretext of fighting the separatist Kurdistan Workers Party known as the PKK. As for Syria, its totalitarian Baathist regime continues to deny citizenships tots more than 300,000 Kurds living near the oil fields of Qamishlo located in its north east.
Present economic statues of Iraqi Kurdistan
After the 1991 Desert Storm, the economic situation of Iraqi Kurdistan has changed drastically. An astronomical inflation figure made living condition very difficult to the average citizen. With the international economic embargo on Iraq and the latter’s economic embargo on Iraqi Kurdistan, plus the political economic tri-restrictions imposed by Turkey, Iran and Syria on the democratically elected Kurdistan Regional Government (KRG) which resulted in the infamous internal Kurdish fights lasted four years between the two main Kurdish political factions; the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) (2000, 5).
The "safe haven" for the Kurds living above the 36th parallel was also under even worse economic condition. It is surprising to note that the UN sanctions have stopped Iraqi Kurds from importing small portable industrial units as well as mechanical equipment required to maintain existing facilities in order to render the suffering of the Kurdish people less painful. Therefore, Kurdistan remained almost entirely dependent on the outside for its daily needs. This may explain the fragile political situation that Iraqi Kurdistan had gone through prior to the removal of Saddam regime by the United States and its allies in March 2003.
However, with the removal of Saddam’s tyrannical regime from Iraq, Kurds were able to breathe normally and hope for a better political and economic future. With the constitutional advances in Iraq, Kurds are able to secure 17% of Iraq’s national income. Despite some corruptions, Iraqi Kurds have been able to unleash full fledgling economic advances; mainly in the areas of housing and infrastructures. To the dismay of many, the KRG is implementing many laws passed by the Kurdistan Regional Parliament (KRP) encouraging investments on oil exploitations, heavy industries, housing, agriculture, banking and education.
Thanks to the US presence in Iraq, Kurds have been able to make economic progress in Turkey, Iran and Syria. Most of the Kurdish origins Turkish and Iranian companies have been able to have a share of the Iraqi Kurdish pie.
Conclusion
Provided that Kurdistan have gained Independence or at least a Federated States within the countries where they are now, so they could plan and implement their own development strategies; it could easily contribute vigorously in the market balance of the region. Kurdistan posses all elements of a quick and strong economic development, such as: abundance source of energy; ample water resources; optimal rainfall in a temperate climate and a cheap labor force. All these factors are good incentives which will attract investments not only in food production but also in other economic fields.
Population growth and food production limitations throughout the Middle East are two major factors that influence the market for food. As the population increase the food supply must grow with it to keep up the present or even higher standard of living. Otherwise, political disturbances and unrest among the population will increase.
It is estimated now that the Kurdish population in Kurdistan to be around 40 million. In certain countries of the region, short term agricultural production is hazardous due to fluctuation of oil prices and unrealistic stimulation of the agricultural sector.
As an oil producing entity, Iraqi Kurdistan can allocate a substantial portion of its resource revenues for its economic planning. At present, aside from Iraqi Kurds, Kurds have been deprived from sharing the economic planning and implementation in the states where they live. The strategies of these countries suffer from bad planning, lack of management control and functional infrastructure and thoroughgoing corruption. It is imperative, however, that central governments allocate percentages of their national GDP proportional to the Kurdish population with complete decentralization to the regional level.
While the high rate of Kurdish population increase at present may be welcome news for Kurdish resistant movements, it should be borne in mind that unless there is a good balance between such an increase and economic growth, there will always be a great exodus of population from Kurdistan. Unless a vigorous and sustainable economic development plan is implemented and followed, their Kurdish conflicts will continue to exacerbate further.
Finally, the hegemonic powers of the present time, as those of yesterday, profit from a status quo which keeps Kurdistan as an international colony. The plight of 40 million Kurds demands a lasting solution. The Kurdish nation has been dismembered but every one of its people is eagerly waiting for the day when it will be free and united. It will not be easy to unite Kurdistan, but then dividing it eighty-five years ago was also a difficult task!
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Jaff, Akram. The fractured economy of Kurdistan. Retrieved November 03, 2007, from http://www.kurd.org/about/economy.htm _________________________
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