il blog

Annalisa Monfreda - reporter


reportage > Iraq, July 2007


Kurdistan, when Peshmerga
go into real estate

There is an Iraq where the rumble of bombs is drowned out by that of backhoes. Skyscrapers and rows of detached houses bloom like flowers in the desert. And 250 students are getting ready to attend the country's first American university. It's Kurdistan. The region torn by Saddam Hussein's bombings is today a bridgehead for the country's reconstruction. But its dream of independence, once again, is in the hands of the United States.

Peschkot is only 40 years old, but already he can be considered a successful man. His five-star hotel, a glass building that dominates the city of Erbil, in northern Iraq, sees a steady coming and going of businessmen and military personnel, diplomats and government officials. He, instead, travels back and forth to Europe. A monthly check-up is the medical prescription for survivors of the chemical attack of Operation Anfal, in 1988. The genocidal campaign by which Saddam Hussein tried to suppress the Kurdish people's dreams of independence once and for all: 182,000 people killed and 1,200 villages razed to the ground. Peschkot Dezayi, that night, was in the mountains along with his fellow comrades in the armed resistance. Peshmerga they were called, which in Kurdish means "those who confront death". They ate whatever nature gave them, they smoked foul, smuggled cigarettes, they slept during the day and moved at night. Each with a different area of specialization. His: rockets, with which he was able to strike Saddam's forces from great distances.

The path that led him from those mountains to the Plaza Hotel took him through a small film venture with Iran, then a photography shop, and finally a construction business of his own. Smoothing the way was the United States. Which in 1991 spread its protective wing over Kurdistan, declaring the region a no-flight zone and seeing to it that considerable sums intended for reconstruction were directed there. Peschkot obtained dozens of contracts from the Americans: 30 million dollars for camps, schools and hospitals. More than enough to set aside a tidy nest-egg for his dream: to construct a lavish hotel in the heart of Erbil. «Earlier I served the country in the armed resistance, now I am taking part in its reconstruction», he says. But if an indomitable peshmerga can be transformed into a successful real estate contractor, then anything can happen in Kurdistan.

The new millionaires
We are in Iraq. And yet in this northern region - independent since 1991 and having over time acquired an anthem, a flag, a parliament and a self-styled national soccer team - instead of U.S. military force transports moving about, there are limousines filled with businessmen. At the international airport of Erbil, instead of military planes landing, there are Austrian Airlines flights that connect Kurdistan with the major European cities. And in the evening, no curfew empties the streets of the cities: the residents of Erbil, Sulaymaniyah and Duhok, the three provincial capitals, meet for a stroll through the shopping center, a game at the stadium or a turn around the amusement park, with its dodgem cars, ejection seats and popcorn.

The concrete blocks surrounding the ministerial buildings and international hotels remind us that we are in a country at war. But the artists commissioned by the regional Government have covered them with murals. As a result, today these barriers no longer attest to a fear of attacks. Instead they represent the traditions and legends of a people that for 80 years has fought for self-determination and is now closer to it than ever before.

Last May, in Erbil, a truck bomb in front of the Ministry of the Interior killed 15 persons, demonstrating that no place, in Iraq, is safe from violence. Much less this capital of the independent region of Kurdistan, 350 kilometers from Baghdad. But soon enough, the rumble of bombs was overshadowed by that of backhoes. Skyscrapers, rows of detached houses and hotels bloom like flowers in the desert. The sky bristles with cranes. And on the streets, enormous billboard advertisements sell dreams with improbable names like Italian City, English Village, Empire, Dream City: all residential complexes with over 600 homes, sold at a price ranging between 150,000 and 700,000 dollars.

Up until two years ago, Erbil's suk, the bazaar, was the financial heart of the region. Today businessmen can choose among 15 brand-new banks. Indispensable for a people who are becoming wealthy at a staggering rate: in Erbil, 84 individuals declare more than 60 million dollars. In Sulaymaniyah there are 50 millionaires, 24 in Duhok. For these nouveaux riches, suitable cars are needed. Possibly an SUV, the city version of the 4x4 that the peshmerga used in the mountains: «I sold 500 of them in 2006 alone», says Hunar Majeed, manager of the Cihan Group showroom, the city's only Toyota dealer. «But Chevrolet and Mercedes sales are also strong».

Democracy school
Since September, the children of the new Kurdish bourgeoisie can study at the prestigious American University that opened in Sulaymaniyah, the sixth in the Arab world: 10,000 dollars a year for a higher education in English, economy, public administration, political sciences and information technology. «All fundamental subjects for Iraq's future», says university president Owen Cargol. «To which classes in philosophy and western policy are added, as well as the foundations of American democracy. From these classrooms, I am sure, the new leadership of Kurdistan and of Iraq will emerge». The investment of 10 million dollars was borne by the U.S., Kurdish, Iraqi and Italian governments, as well as by countless donors. «And it is only the first of three campuses that are planned: the others will be established in Baghdad and Bassora», the chancellor continues. «We chose to begin in Sulaymaniyah because it is located in the most peaceful but also the most strategic region of Iraq: it could attract Turkish, Syrian, Azeri and Iranian students».

Iraqi vacations
The conditions are all there, after all, to allow Kurdistan to lay claim to its own slice of international tourism. Or at least so the regional Government thinks: with the slogan "the other Iraq" it sells investors and tour operators on the relative stability of the region (since 2003, not a single soldier killed or a westerner abducted), and pitches the splendid mountains, the archaeological sites, the cultural and religious places.
But apart from some sporadic exception, the only tourists who populate the hotels of Shaqlava or visit the Bakhal waterfalls are Iraqis from the south seeking relief from the bombings. Hazem Kurda, however, does not lose hope. This man, who emigrated to Sweden twenty years ago and is still a resident of that Scandinavian country, like thousands of other Kurds of the diaspora did not miss a chance for the reconstruction of his country. Consequently, upon Saddam's fall in 2003, he bought 400,000 square meters of land in the mountains overlooking his native village, Rawanduz, 50 kilometers north of Erbil. He had the land cleared of mines and built a deluxe hotel there, the Pank Resort. Three million from the Kurdish government, plus dozens more invested out of his own pocket in order to construct an Alpine style chalet, with swimming pools, sauna and a miniature golf course. All in anticipation of the first western tourists. «We Kurds have been peshmerga for too long», he says. «Now we must build our country, invest».

A thirst for energy and hunger for agriculture
The question is: what kind of investments does Kurdistan need? «Roads, schools, hospitals: here you can take your pick», replies Herish Muharam Muhamad, head of the regional Government's investments agency. Nevertheless a priority does exist. It's called energy. Today, the kilowatts imported from Turkey and from Iran, along with those produced by the single Kurdish power plant, ensure only 2 hours of electrical power a day in winter and 14 in summer. The rest is provided by generators found in every building and housing complex. But who would dare invest in dams and electric power plants in a country still torn by war? «The future of Kurdistan depends on that of Iraq», says contractor Salam Bradosti, president of the Zozik Group. «You can't think about an electric power plant unless there is peace first. And you can't expect the big oil companies to come and pump gas or oil, until the situation is stabilized».

But even if the energy problem were resolved, «we cannot drink electricity and eat oil», says Hazem Kurda, owner of the Pank Resort. «In fertile Mesopotamia not even a tomato is now grown. And in the land where beer was born, today not even one can is produced. Before all the rest, perhaps we should get agriculture back on its feet and launch industry and manufacturing». Peter Gruschka, Dutch activist of a Kurdish NGO, agrees: «Every day in Kurdistan a new supermarket opens its doors, but I challenge anyone to find in it a single product that is made in Iraq. Yogurt comes from Iran. Oil, butter, mayonnaise, ketchup and pasta from Turkey. Clothing, including typical Kurdish attire, comes from China». Agricultural activity has been harmed by the drought that has assailed the Middle East for years now. But also by the perverse mechanism triggered by UN resolution 986, better known as Oil for food: the distribution of food imported from the West, in exchange for Iraqi oil, has definitively destroyed what was at one time the principal economic activity of Kurdistan.

Construction fever
Nevertheless the numbers speak clearly: in the past year, a good 4 billion dollars were invested in development plans for the region. Where did they wind up? «In the building trade: at present, this is the only business that is operational in Kurdistan», says Herish Muhamad. «Anyone can propose a plan to the government: if it is approved, in accordance with the new law on investments, he will receive the hectares of land on which to build free of charge», says Jack el Boustany, Lebanese project manager of the residential complex Empire. That explains, then, the numerous fences enclosing nothing. Erbil is filled with them. «They are areas where houses or offices will soon rise. The land is free, but before beginning to build, the contractors wait to sell a certain number of houses on their word of honor». Up till now, only a few projects have been brought to completion. Among them, the towers of Naz City: 14 concrete blocks, 350 apartments in all, that have changed the city's skyline.

Despite the building boom, the unemployment rate in the region remains high. The reason is simple: the contractors prefer to hire laborers who come from Bangladesh, India and Ethiopia specifically for that purpose, rather than hiring local workers. «They cost half what a Kurd costs: 10 dollars a day instead of 20», Jack continues. «And then too they are highly specialized: many of them come directly from the shipyards of Dubai».

But if the bulk of the population remains poor, who buys all those houses? The answer is predictable. Three of the 14 buildings in Naz City are intended for government officials. Just as an entire floor of the Plaza Hotel is reserved for consuls and attachés. What could you expect, after all, from an administration that provides jobs for 60 percent of the active population? 1,300,000 employees, whose paychecks exhaust the regional Government's only source of revenue, namely, 17 percent of Iraqi oil proceeds. A system of patronage that, in the absence of a real economy, ensures a state salary to every Kurdish family.

A smuggling people
In the meantime, the revenue streams that fuel the Kurdistan engine come mainly from two sources: smuggling and the United States. The first is a traditional activity of this border population: carpets, cigarettes and gasoline, passed across the Iranian and Turkish borders on a small- or large-scale basis. As for the United States, «today we owe everything to them», says Hazem Kurda, «but we cannot trust them: they are capable of changing their policy in the span of a few minutes». It already happened after all, and the Kurds have a long memory. It was the Ford-Kissinger administration that encouraged them to rebel against Baghdad, only to then cynically abandon them in 1975, leaving them at the mercy of Saddam Hussein's vengeance. Thirty years earlier the Soviet Union had not behaved any better toward the Iranian Kurds: the Republic of Mahabad, born under its protection in 1946, collapsed after only 11 months after having been abandoned by the superpower. And it is precisely in order to balance an excessive dependency on the United States that the Kurdish government is seeking to strengthen trade relations with other European countries. The new law on investments is the regulatory instrument for this objective, since it offers foreigners the opportunity to run a local business with 100 percent control, as well as to buy lands without taxes for the next 5 years.

Kirkuk, an unknown
«If the Americans really championed the Kurdish cause», contractor Salam Bradosti says, «they would support the annexation of Kirkuk to our region». This province, geographically Kurdish and ethnically mixed, is a treasure-trove of oil: by itself it produces 900,000 barrels a day, approximately half of Iraqi exports. For an agriculturally-oriented Kurdistan, that today is dependent on Baghdad's oil proceeds, Kirkuk would be a guarantee of economic independence. An essential premise for political autonomy. «But for the United States, Kurdistan is only a tiny, worthless region», Bradosti goes on. Nothing compared to the strategic importance of Turkey. Which does not spurn investing in the region: of the 600 foreign companies recorded in Kurdistan, 350 are Turkish. But which has always looked unkindly on Kurdistan's autonomy, insofar as it is contagious for the Kurdish minority within Turkey's own borders. Next December 15, a referendum is to decide the issue of the annexation of Kirkuk: it will be a test case for American policy, but also a verdict for the future of the independent region. Because the Kurdish dream of independence, once again, is marked by stars and stripes.

Text by Annalisa Monfreda ©
English Translation by Anne Milano Appel