BAGHDAD: A referendum on independence for Iraqi Kurdistan set for September 25 comes as the autonomous region faces the worst economic crisis in its short history.
Plunging government income, the challenge of fighting the Daesh group and the cost of hosting hundreds of thousands of refugees have combined to punch a gaping hole in the Kurdistan Regional Government’s budget.
“The KRG’s coffers are empty and it’s burdened with debts,” Ruba Husari, an expert on Iraq’s oil industry, told AFP.
The World Bank said in a recent report that the fiscal crisis and the security challenge posed by IS “have had a significant adverse impact on economic growth”.
The region has benefitted from an influx of investment since the 2003 fall of dictator Saddam Hussein in a US-led invasion.
It won a measure of autonomy in the 2005 Iraqi constitution and has been seen as an island of stability in a country plunged into anarchy.
The drowsy regional capital Irbil was transformed as investors built towers, plush buildings, shopping malls and hotels to host foreign executives on business trips.
All that collapsed in 2014 as the price of oil plunged, IS jihadists seized a tranche of northern Iraq abutting the KRG and more than a million displaced Iraqis and Syrian refugees fled to the autonomous region.
That was compounded by Baghdad’s decision to suspend payments to the KRG of 17 percent of Iraq’s national budget.
The transfers, worth some $12 billion (SR45 billion) ), made up 80 percent of the region’s budget revenues.
Wages, including those of Peshmerga fighters, were slashed.
“The fiscal shock is severe,” the World Bank said.
It said the regional government has dealt with the cut in revenues by borrowing money, postponing projects, and delaying payments – including the salaries of government employees.
The combination of crises slashed GDP growth from eight percent in 2013 to three percent in 2014, the World Bank said in 2015.
A senior KRG official said that by the end of that year, public servants’ salaries had been cut by 60 percent.
For the past two months, the region’s 1.2 million civil servants and retirees have not been paid at all, he told AFP.
Fathi Al-Mudaress, an adviser to the KRG, said the crisis “stems from the fact that (the region) has made oil revenues its main source of income.”
“Two years into the crisis, the autonomous region’s government has adopted policies of austerity and income diversification, notably through tourism, agriculture and industry,” he told AFP.
Kurdistan on average produces some 600,000 barrels a day, of which 550,000 are exported via Turkey.
That includes some 250,000 from the oil fields of disputed Kirkuk province, seized by Kurdish forces when IS took control of Iraq’s second city Mosul.
The KRG sells oil through advance contracts, in effect taking out loans from firms including Swiss commodities giants Vitol and Glencore and repaying its debts with barrels of crude.
The KRG has used this system to borrow more than $3 billion in the past three years.
Recently it borrowed $1 billion from Russia’s Rosneft to pay damages to European-Emirati consortium Pearl Petroleum, which is in a dispute with the regional government.
Rosneft will also be paid in barrels of oil.
But with oil prices still depressed, Kurdistan has been unable to pay investors developing its fields, and its debts are growing.
The World Bank warned in 2016 that “arrears in payments to oil companies and contractors create an uncertain business environment”.
Husari said the crisis is much more severe than the Kurdistan government admits.
“The obvious ‘yes’ result of the referendum will not lead automatically to a declaration of an independent state but will open battles on several fronts,” she said.
“For Barzani it’s a leap forward to stay in power while diverting attention from the dire economic state of the region.”
Iraq’s Kurds in economic crisis ahead of independence vote
Iraq’s Kurds in economic crisis ahead of independence vote
WATCH: Rebuilding of Mosul’s famous leaning minaret nears completion
- The 12th-century Al-Nuri Mosque and its distinctive tower were destroyed by Daesh in June 2017
- Restoration work on the mosque, part of UNESCO’s Revive the Spirit of Mosul project, is expected to be completed next month
LONDON: UNESCO has shared dramatic footage of a historic mosque minaret that has been rebuilt in Iraq, seven years after it was destroyed by Daesh.
Known as Al-Hadba, or “the hunchback,” the leaning 12th-Century minaret at Al-Nuri Mosque in Mosul was one of the city’s most famous landmarks. But it was destroyed when the extremist group blew up the mosque in June 2017.
The video from the UN’s cultural agency features drone footage that shows the minaret nearing completion. Though the rebuilt tower is still covered in scaffolding, the footage clearly shows that its famous lean has been retained.
“Watch as the iconic Al-Hadba minaret in Mosul rises once again,” UNESCO said in a message posted with the video on social media platform X.
“Soon, this historic landmark will reclaim its rightful place in the city’s skyline — standing tall, leaning, and proud.”
UNESCO said the restoration of the mosque and its 51-meter-tall minaret is expected to be completed by December.
The mosque was built in the second half of the 12th century and the minaret began to lean several centuries ago. After Daesh seized control of parts of Iraq in 2014, the group’s leader, Abu Bakr Al-Baghdadi, declared the establishment of its so-called caliphate from inside the mosque.
Three years later, it was destroyed by the militants as Iraqi forces battled to expel them from the city. Thousands of civilians were killed in the fighting and much of Mosul was left in ruins.
The restoration of the mosque is part of UNESCO’s Revive the Spirit of Mosul project, which also includes the rebuilding of two churches and other historic sites.
Delayed Gaza polio vaccinations to resume on Saturday, agencies say
- The final phase of the campaign had aimed to reach an estimated 119,000 children under 10 years old
GAZA: The third phase of a delayed polio vaccination campaign in Gaza will begin on Saturday, aid organizations said on Friday, after the rollout was derailed by Israeli bombardments, mass displacement and lack of access.
The polio campaign began on Sept. 1 after the World Health Organization (WHO) confirmed in August that a baby was partially paralyzed by the type 2 polio virus, the first such case in the territory in 25 years.
The humanitarian pause to conduct the campaign had been agreed but WHO and the UN children’s agency UNICEF said the area covered by the agreement had been substantially reduced from the previous pause in September, and would now cover only Gaza City.
The final phase of the campaign had aimed to reach an estimated 119,000 children under 10 years old in northern Gaza with a second dose of novel oral polio vaccine type 2 (nOPV2). However, achieving this target is now unlikely due to access constraints, the statement said.
COGAT, the Israeli army’s Palestinian civilian affairs agency, said it was helping to coordinate the three-day campaign and once it was complete, there would be an assessment to decide whether the schedule would be extended.
“This coordination will ensure that the population can safely reach medical centers where the vaccines will be administered,” it said in a statement.
Macron recognizes French soldiers killed Algerian independence hero in 1957
- France’s century-long colonization of Algeria and viciously fought 1954-62 war of independence left deep scars on both sides
PARIS: President Emmanuel Macron on Friday acknowledged that Larbi Ben M’hidi, a key figure in Algeria’s War of Independence against France, had been killed by French soldiers after his arrest in 1957, the French presidency said.
“He recognized today that Larbi Ben M’hidi, a national hero for Algeria... was killed by French soldiers,” the presidency said on the 70th anniversary of the revolt that sparked the war, in a new gesture of reconciliation by Macron toward the former colony.
France’s more than a century-long colonization of Algeria and the viciously fought 1954-62 war of independence have left deep scars on both sides.
In recent years, Macron has made several gestures toward reconciliation while stopping short of issuing any apology for French imperialism.
Since coming to power in 2017, Macron has sought “to look at the history of colonization and the Algerian War in the face, with the aim of creating a peaceful and shared memory,” the presidency said.
Ben M’hidi was one of six founding members of the National Liberation Front (FLN) that launched the armed revolt against French rule that led to the war.
The presidency said that according to the official version, Ben M’hidi after his arrest in February 1957 attempted to commit suicide and died during his transfer to the hospital.
But it said he had in fact been killed by soldiers under the command of General Paul Aussaresses, who admitted to this at the beginning of the 2000s.
In 2017, then-presidential candidate Macron dubbed the French occupation a “crime against humanity.”
A report he commissioned from historian Benjamin Stora recommended in 2020 further moves to reconcile the two countries, while ruling out “repentance” and “apologies.”
But Macron, who has sought to build a strong relationship with Algerian President Abdelmadjid Tebboune, in 2022 questioned whether Algeria existed as a nation before being colonized by France, drawing an angry response from Algiers.
Israel cabinet approves 2025 wartime budget
- Israel has been locked in a war with Hamas in Gaza, and since September it has been fighting the Lebanese group Hezbollah
JERUSALEM: Israel’s cabinet on Friday approved a 2025 national budget, a wartime financial package that far-right Finance Minister Bezalel Smotrich said supported the country’s ongoing wars and encouraged economic growth.
For more than a year, Israel has been locked in a war with Hamas in Gaza, and since September it has been fighting the Lebanese group Hezbollah in Lebanon.
“The main objective of the 2025 budget is to maintain the security of the state and achieve victory on all fronts, while safeguarding the resilience of the Israeli economy,” Smotrich said.
The budget, totalling about 607.4 billion shekels ($162 billion), includes a nine billion shekel package to support reserve soldiers.
It will now move to the Knesset, or parliament, where Prime Minister Benjamin Netanyahu’s coalition holds a majority, making approval likely.
Netanyahu welcomed the cabinet’s approval of the budget, saying Smotrich had put together “an important, difficult but necessary budget in a year of war.”
Additional allocations would be made for the defense ministry, as the military fights the two wars, as well as Iran and the groups it backs.
“This budget will help and support the needs of the war so that it will lead to a victory that will allow the strong Israeli economy to grow and prosper for many years,” Smotrich said.
The budget projects a fiscal deficit of about 4.3 percent.
But former prime minister and key opposition leader Yair Lapid criticized the budget, saying it would “increase the expenditure of every family in Israel by 20,000 shekels per year.”
UK urged to evacuate hospitalized children from Gaza
- British charity Project Pure Hope: ‘We are witnessing a humanitarian disaster of historic proportions’
- Kamal Aswan Hospital has just 2 doctors to look after more than 150 patients
LONDON: A British charity has urged the UK government to evacuate 21 critically ill children currently in a hospital in northern Gaza, Sky News reported.
The Kamal Adwan Hospital is besieged by Israeli forces and was recently raided by troops, who detained staff and left the facility with only two doctors to care for more than 150 patients.
It was also targeted by an Israeli airstrike on Thursday. Its supplies are reportedly running low and many of its facilities are no longer operational.
Project Pure Hope has called on the UK to facilitate the evacuation of vulnerable children trapped inside.
“We are witnessing a humanitarian disaster of historic proportions,” it said in a statement. “With each passing hour, the children’s chance of survival diminishes without advanced medical intervention — intervention that cannot be provided under the hospital’s current, catastrophic conditions.”
The charity said it has sufficient money to fund an evacuation of 21 children in critical condition at the hospital.
It added that it held a meeting with UK Foreign Office staff this week to discuss its plans, but so far the government has not agreed to take in patients.
“While other countries ... have opened their doors to these paediatric cases, the UK remains a notable outlier, having yet to implement any such programme,” the charity said.
The US, Switzerland, Italy Ireland and the UAE have taken in hospitalized children from Gaza since the start of the conflict over a year ago.
Fears for the safety of people in the area around the hospital have grown in recent weeks amid an uptick in Israeli military activity and Israel’s refusal to allow sufficient aid to reach displaced civilians.
Charities have warned of famine and disease, and aid workers struggle to move around Gaza, especially to the scene of military strikes to help civilian casualties.
Project Pure Hope’s concerns about the fate of patients at Kamal Adwan Hospital have been echoed by medical charity Medecins Sans Frontieres, which said it is “deeply concerned” by the situation after one of its staff members was detained by Israeli forces.
Israel claims that Hamas has been using the hospital, located in the Jabaliya refugee camp, as a base, and that it has found weapons stored at the facility. The hospital denies the allegation.
