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Privatization in Sulaimaniyah an unhealthy
economic gamble
26.10.2006
Muhammed S. Fateh, Sulaimaniyah city
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According to official polls, there are nearly 800
domestic and 350 foreign companies operating in the
fields of trade in Sulaimaniyah.
Despite the fact that the number of private
companies is witnessing a rapid expansion in the
city of Sulaimaniyah private entrepreneurs are still
complaining about the government and its difficult
policies. Some economic experts believe the system
of privatization that exists in Kurdistan today is
nothing more than just an act being put on - and a
political game.
Sulainaniyah, Kurdistan Region (Iraq) ,---
According to official polls, there are nearly 800
domestic and 350 foreign companies operating in the
fields of trade in Sulaimaniyah. There are also 1129
firms working in the field of industry, including
foods and construction and others.
This major and rapid growth in the number of firms
in the city is said to be due to new economic
opportunities created for the free market as well as
for the private sector.
Economy observers, however, view this as negative
indication of the market. They believe this hasty
expansion brings advantage to neither the free
market nor the private sector in Kurdistan, but
instead contradicts the economic bases.
On the other hand, however, Assistant Secretary
General of the Patriotic Union of Kurdistan for
Trade Affairs Abdullah Haji Saeed sees this growth
in economy as a healthy indicator.
"Dozens of people in Sulaimaniyah have recently
become billionaires, and hundreds millionaires in
dollars," Saeed told journalists in a press
conference held in Sulaimaniyah. He added that this
rise in the number of the city's rich is great and
very happy news to all.
According to scientific researches conducted on the
economy of Kurdistan, nearly $2.00 is produced every
hour, which is still much lower than the
international standard of $45.00 of production per
hour in goods and services.
Part of this discrepancy is caused by the inability
or unwillingness of university and college graduates
to work in the private sector, and by their
preference to work for the government instead, which
has led to the relatively high unemployment rate and
low level of production in the region. Another
situation is that some 22 thousand "imaginary"
government employees, 14 thousand of whom receive
three salaries, also exist.
Despite the abilities of the private sector to solve
a large number of economic problems and having the
advantage of making great profit if it chooses to;
economic experts believe the system of privatization
that exists in Kurdistan today is nothing more than
just a deceit - only an act that is being put on.
Dr. Muhammad Raouf Saeed, Professor at the
University of Sulaimaniyah, however, has somewhat of
a different perspective on the private firm sector.
He believes that normally the sector consists of
companies that do not, under any circumstances,
accept corruption and can often even uproot the
issue completely.
However, he adds that in Kurdistan, the problem is
that the system of the private sector is, in itself,
"corrupt," accusing the system of being founded on
no scientific bases.
"Those who are close to power are those who are
overtaking the (private) sector," Dr. Saeed says.
"The private sector is only for private personnel."
From 1991 onwards, there has been a clear decline in
the field of the public sector, especially after the
sector's failure in attempts trying to provide the
market with adequate production and capital.
Ever since, most - if not all - government factories
in Sulaimaniyah have been and are still being
privatized. This has affected both, the quality and
the quantity of goods produced by these companies
drastically.
Pakhshan Ahmed, Productions Director of Sarchinar
Cement Factory in Sulaimaniyah, sees this
privatization as an encouraging move towards a
better economy. She says transferring the government
factories to private firms is one of the positive
steps the government has been taking.
"Since the Sarchinar Factory has become privatized,
things are running much more smoothly," she says,
adding that the rate of routines is constantly
dropping with the production rate always increasing.
Despite the fact that the number of private
companies is witnessing a rapid expansion in the
city of Sulaimaniyah these private entrepreneurs are
still complaining about the government and its
difficult policies.
Kawa Omer Muhammed, Legal Advisor of the Union of
Industries of Kurdistan says, "The government is not
scientifically aware when it comes to the issue of
capital and domestic production," adding that this
is the reason why the government has not been able
to make necessary arrangements and simplifications
for these private companies.
The advisor explains that due to burdens placed by
the government on the shoulders of these non-public
firms, the price of their goods is always on the
rise, disabling these private sectors from competing
with foreign goods.
Fakhraddin Hawrami from the Statistics Office of the
Union also raised concerns about the heavy
privatization that is taking place in the city by
saying that the process does not have a well-planned
program and lacks major organization.
"The way it is done does not serve the private
sector because those who have the capital to do
business are still not able to think with a business
mentality," Hawrami says, "they have failed to bring
the best equipments and means of production to
Kurdistan."
This official believes the government itself has
become the main renter of these companies, which he
describes as the government's own malfunction in
controlling these companies in a practical way. "If
things continue this way, they will only get worse,"
Hawrami says.
"What we see in Sulaimaniyah is neither the free
market nor the privatization everyone is talking
about; it is simply chaos."
The inflation in Sulaimaniyah and the large
inconsistency in the high prices of goods from one
place to another have severely upset the people,
forcing the people to call the marketplace the "Evil
Market".
Azad Majeed, 36, an employee says the people's
economic conditions are worsening day by day, adding
that under the name of free market and
privatization, capitalists and merchants are taking
extreme advantage of people without the government
questioning anyone or doing anything to prevent
that.
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