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London, 26
August, Brendan O'Leary, International
Constitutional Advisor to the Kurdistan Regional
Government, speaks to the Kurdistan Development
Corporation to discuss how the new constitution for
Iraq will affect for investors in the Kurdistan
Region.
This interview was conducted just prior to Kurdistan
National Assembly approving the draft constitution.
Q. Do you feel that the new constitution is
reflective of the aims and needs of the peoples of
the Kurdistan region in Iraq?
Yes. The draft permanent constitution, if validated
and implemented, gives Kurdistan's people the
recognition and powers they and their leaders have
sought. They now have an autonomous federal region
as a result of freely negotiated agreements with
their federal partners. The Kurdistan National
Assembly will retain the very full domestic
law-making capacities that it had under the
Transitional Administrative Law, and in fact will
have them expanded.
A fair process is in place, and time-tabled for
executive action, to resolve Kurdistan's borders,
and to resolve the injustices that occurred in
Kirkuk. Kurdistan will maintain responsibility for
its internal security, of vital importance for its
people, and for the peace of the region. And, for
the first time, Kurdistan's citizens will be legally
assured that they will be appropriate beneficiaries
of their region's wealth in natural resources.
Obviously many people in Kurdistan would prefer to
be independent, but this draft constitution
definitely offers the most feasible as well as the
best of the political alternatives available. If it
works it will serve to heal the historic antagonisms
between Kurdistan and predominantly Arab Iraq.
Q. What does the new constitution mean for investors
in Kurdistan in comparison with the rest of Iraq?
First, any existing agreements and contracts made
with the Kurdistan Regional Government (or with
private parties in Kurdistan) since 1992 are valid,
provided they do not contradict the new
constitution. Since natural resources are removed
from the list of exclusive federal competences that
were listed in the Transitional Administrative Law I
can see no past agreements or contracts that are
endangered, and many that are now fully assured.
Secondly, Kurdistan is now in a position to move
from preparing its own draft constitution to
validating its own constitution. This will confirm
its intentions to provide a wholly regularized,
constitutionalized, lawful, predictable and human
rights respecting environment in which to conduct
business. Investors will have a legal, secure, and
certain constitutional environment.
Thirdly, Kurdistan is the most peaceful and stable
part of contemporary Iraq, and has a high proportion
of its educated people skilled in non-Arabic
languages. So, it will have initial advantages over
the rest of Iraq, as a commercial gateway, and as an
experienced manager of international and
cross-frontier relations.
Fourthly, confirmation of the recognition of
Kurdistan's federal regional status by the rest of
Iraq will stabilize Kurdistan's cross-border
relations with Turkey and Iran, which will again be
helpful for investment and trade.
Q. Are the contracts already signed by the KRG still
valid? Does this include contracts within the oil
industry?
Yes and yes. The TAL is superseded once the new
constitution is implemented, and Kurdistan's laws,
contracts and agreements since 1992 are recognized.
Any ambiguity about agreements reached after the
Transitional Administrative Law and the enactment of
the permanent constitution will be resolved by the
latter's validation. Contracts within the oil
industry within Kurdistan will be subject to the
jurisdiction of both the federal and the regional
courts, but in the event of a clash of laws regional
law is supreme because oil and gas are not specified
as exclusive federal competences.
Q. Does the constitution refer to commercial law i.e
land and company ownership by foreign investors?
Not specifically. Whether it impliedly does so in
the provisions regulating inter-regional commerce is
not something on which I would claim expertise.
Nothing in the constitution bars foreigners from
valid title to land and company ownership.
Kurdistan's own constitution and laws will be what
matters when it comes to commercial decisions.
Q. Will federal commercial law impinge on investors'
rights and incentives in the Kurdistan region of
Iraq? If Baghdad passed a law that was detrimental
to international investors in Kurdistan, would the
Kurdistan Regional Government have the authority to
over-rule?
In the event of a clash of laws in areas of shared
competences then regional law is supreme. The
federal government's exclusive competences are
strictly enumerated, and are limited. In my view
these limited competences will not permit the
federal government to impinge improperly on
investors' property rights or on any incentives that
may be offered by the Kurdistan Regional Government
under its own lawful authority.
Q. Would the establishment of Kurdistan as a free
trade zone, such as Dubai, be compatible with the
new constitution?
With this proviso: the federal government has
exclusive competence in federal customs. Inside
Kurdistan the KNA may pursue a capitalist or social
democratic model of development, as it sees fit.
Nothing, I think, would stop the KRG from trying to
establish a special free trade zone in part of or
all of Kurdistan, but it would need to agree customs
arrangements with the federal government.
Q. You have just returned from the region, what
observations did you make regarding economic
development in Kurdistan?
Kurdistan is thriving, by comparison with the rest
of war-torn Iraq. It has put the B'athist regime
behind it, and its own internal conflicts. Its
population is healthier, better educated, and far
more used to public freedoms than the rest of the
region. Political Islamists and xenophobes are
marginal in Kurdistan, unlike other parts of the
Middle East, and that's how its secular government
wants to keep things.
Kurdistan has benefited from the return of talented
people from its diaspora. Its main cities are
enjoying significant construction booms. Its
airports have opened and offer new means to by-pass
the traffic tailbacks that have been a fact of life
on the borders with Turkey and Iran.
The peoples of Kurdistan welcome foreigners and are
keen to have major international involvement in
their economic progress. Their next big development
tasks in the public sector are to upgrade their
schools, universities, hospitals, sewage systems,
and transport networks. In the private sector they
are keen to let the market be the prime source of
development.
Brendan O'Leary, an Irish and European Union
citizen, is Lauder Professor of Political Science at
the University of Pennsylvania, where he directs its
Solomon Asch Center. Educated at Oxford he is a
former professor and head of the Government
Department at the LSE, where he received his PhD.
The author or editor of fourteen books Dr. O'Leary
is a specialist in the politics and constitutional
reconstruction of deeply divided territories.
Brendan is also co-editor of the 'The Future of
Kurdistan in Iraq'. May 2005 | ISBN 0-8122-3870-2 |
$45.00
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BUY This BOOK- Future Of Kurdistan In Iraq (Hardcover) by Brendan O'Leary (Editor)
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