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1 1 Structural Legacies During the colonial and postcolonial periods in Iraq, external aid to the Kurdistan Region was virtually nonexistent. The strategic interests of competing foreign governments were based on defining territorial borders, stabilizing the new Iraqi state, and securing petroleum resources. Even with the emergence of the state petroleum industry in the early 1950s, the nature of foreign aid focused on technical assistance, capital investments, and financial inputs to the sovereign Iraqi state and not the unrecognized Kurdistan Region. Economic isolation and underdevelopment was exacerbated by state authoritarianism in an increasingly ethnicized and repressive political context. In the absence of international recognition, external patronage, or internal sovereignty, the Kurdistan Region had no leverage, incentives, or institutional capabilities to sustain positive ties with the central government. The relationship that emerged was based on patronage, dependency, and open conflict. Aidless and Agrarian As in most postconflict situations, World War I (1914–18) left the Kurdistan provinces of the Ottoman Empire in economic and political havoc. Mass refugee populations created ethnic and religious imbalances in sensitive border areas, disrupted markets led to food shortages, and depleted resources left populations without basic services. Missionary groups backed by European governments provided local assistance; however, their efforts focused on select Christian communities in the Turkish provinces and not the Muslim, Kurdish tribal regions of Iraq. Even after the Ottoman Empire disintegrated and the Kurdistan Region became a battlefield between nationalists, religious leaders, and foreign governments, local populations had no access to humanitarian aid that could have provided shelter, 2 | The Kurdish Quasi-State emergency relief, and rehabilitation to the region. U.S. President Woodrow Wilson ’s Fourteen Point program offered the ideological impetus for protecting minoritygrouprights,particularlyfortheKurds.Still,theinstitutionalframework and international support for foreign aid transfers to the unrecognized Kurdistan Region were unavailable. Certain Kurdish leaders received political promises from colonial officers, yet this assistance had no official financial backing or legal mechanisms of enforcement. It also terminated when the British assumed control of Mosul province and the Kurds lost their bid for statehood in 1923. To be sure, the British-mandated government welcomed foreign aid as part of its larger strategic objective to develop and industrialize Iraq, which included securing Iraqi petroleum concessions.1 With the advice of international technical consultants and in coordination with the British Middle East Office (BMEO), it passedaseriesoflawstostimulateagriculturalmarketsandindustrialgrowth.The 1926 law for the encouragement of cultivators to use pumps, the 1929 law for the encouragement of industry, and the 1933 law for customs tariffs canceled certain customs duties for imported capital goods, imposed high tariffs on consumption items, and encouraged private investment. The new Iraqi state subsidized grain exports, imported machinery, and distributed seeds to farmers (Dahiri 1976, 87; Langley 1961, 70; Haj 1997 48). To boost the tobacco industry, the main cash crop of Iraq grown in the Kurdistan Region, the government passed a law to support tobacco production, established a tobacco monopoly in 1939 that fixed prices, supported farmers’ incomes, and increased customs duties on imported tobacco. The central government also invested in infrastructure projects to expand commercial relations between the Kurdistan Region and Baghdad. It spent about 3 million Iraqi dinars (OID) building a railway from Kirkuk to Arbil so that by 1950 the Kurdish north was linked to the south and traded goods were transported from Mosul to Basra and Baghdad (Langley 1961, 117).2 1. The Iraqi oil industry was initially based on a system of concession agreements between the central government and oil companies, which commenced in the late nineteenth century. The foreign oil companies, or concessioners, had the sole right to develop and export the petroleum and to determine output and prices (Alnasrawi 1994, 1–2). 2. Until 1931 the Iraqi economy was tied to the British sterling, although as a member of the Indian monetary areas, Indian rupees were used as an official means of exchange. They were then replaced with the Iraq dinar (Iversen 1954, 5). Structural Legacies | 3 As the granary of Iraq and main food producer of the country, the largely rain-fed Kurdistan Region, with 1.4 million hectares of arable land, had much to gain from the state’s agrarian support policies. Central government control of market structures created a situation in which the agriculturally rich Kurdistan Region supplied a large proportion of the country’s internal food needs and exports to Europe. From the late nineteenth century until the mid-1930s Iraq exported about 100,000 metric tons (MT) of grain annually, the majority...


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