Kurdish Iraq will need $1.4bn to stabilise economy, report shows

The Economic and Social Impact Assessment of the Syrian Conflict and Isis Crisis report highlighted how prices and unemployment rates have escalated in Iraqi Kurdistan from refugees entering the labour market.

The Kurdish region’s populattion increased by 28 per cent as a result of the Syrian conflict and the ISIL crisis. Safin Hamed / AFP

The Kurdish regional government will need US$1.4 billion this year to stabilise its economy after its annual economic growth rate fell 5 percentage points, primarily because of the inflow of Syrian refugees in light of the ISIL conflict, a World Bank report showed yesterday.

"As a result of the Syrian conflict and the ISIL crisis, KRI's [Kurdistan Region of Iraq] population increased by 28 per cent placing strains on the local economy, host community, and access to public services," wrote Ali Sindi, the KRG planning minister, in the report titled Economic and Social Impact Assessment of the Syrian Conflict and Isis Crisis.

It highlighted how prices and unemployment rates have escalated in Iraqi Kurdistan from refugees entering the labour market. The influx of the new labourers has pushed wages down.

In addition, the flow of foreign direct investment has decreased in the region, causing an adverse impact on Kurdistan’s economy.

“While our government has allocated significant resources – through the immediate response plan – to accommodate the needs of the displaced population, it cannot address this big-scale humanitarian crisis on its own,” Mr Sindi said.

The report added that the poverty rate in Kurdistan more than doubled last year to 8.1 per cent from 3.5 per cent.

Mr Sindi called for greater support from the national and international partners to overcome the humanitarian crisis.

The rapid advancement in ISIL last year caused chaos in Syria and northern Iraq, pushing the United States and its allies to lead air strikes against the group.

Last year, about two million Iraqis fled the conflict in the northern and western parts of the country. Some took refuge in Baghdad and others in the southern parts of the country.

Follow The National's Business section on Twitter