- Throughout 1988, MiG-17 fighter jets would take off from an airfield
on the outskirts of town. Locals referred to it as the 4-4-4: Within
four minutes, they’d be over the city. They would drop four bombs, and
then the pilots would collect a $4,000 reward from the dictator sitting
hundreds of miles away in the capital for their role in the slaughter of
civilians.
Such episodes might seem familiar to Iraqi Kurds, whom Iraqi
President Saddam Hussein’s regime sought to punish both for disloyalty
and out of racist animus, but they took place 3,000 kilometers away in Hargeissa, the capital of Somalia’s Somaliland region.
A Disparate People with a Common History
The similarities between Iraq’s Kurds and Somaliland’s Isaaq clan are
eerie. Both suffered under first Soviet- and then US-backed dictators
as Cold War calculations caused both Washington and Moscow to ignore
atrocities. Both Somali President Mohamed Siad Barre and Saddam
invaded—and then lost a war to—their larger neighbors. Between 1988 and
1991, both Kurds and the Isaaq clan faced all-out offensives as the
central government sought to resolve their regional problems once and
for all. In both Somaliland and Iraqi Kurdistan, some figures—even from ruling families—cut deals with the dictator, be it Siad Barre or Saddam. Today, local authorities continue to unearth bodies from mass graves. Higher-end estimates places the death toll in both cases at more than 100,000.
In both Iraqi Kurdistan and Somaliland, 1991 was a watershed year.
Both Iraq and Somalia rose in rebellion against their respective
dictators. There are differences. Siad Barre fled into exile where, four
years later, he died.
In Iraq, however, Saddam managed to reconsolidate control over all but
the northern three governorates where Kurds thrived in a safe-haven and
under a no-fly zone. Regardless, both Iraqi Kurdistan and Somaliland
became self-governing: The Kurdistan Regional Government held elections
in 1992, with Kurdistan Democratic Party leader Masoud Barzani and
Patriotic Union of Kurdistan leader Jalal Talabani ultimately agreeing
to divide power between them. In Somaliland, the 1993 Boroma Conference witnessed the first presidential election, of which there have now been five.
There are other similarities: As both Iraqi Kurdistan and Somaliland
got their new governments off the ground, they labored under dual
sanctions: The international community imposed sanctions against both
Iraq and Somalia, and then the Iraqi and Somali governments imposed
their own embargos upon their breakaway regions. During the sanctions
regime, both for bureaucratic ease and in order to reinforce a policy of
unity and discourage separatism, both the US and United Nations channeled aid disproportionately through the capitals—Baghdad and Mogadishu—and, in the process, fueled endemic corruption.
Today, however, the comparisons have ended. Somaliland has thrived as
a nascent democracy, even as it remains unrecognized. Lack of
recognition brings serious economic hurdles, and yet its private sector
thrives. In comparison, Iraqi Kurdistan is now Iraq’s least democratic
region. While Somalilanders have chosen five presidents since 1993—the
most recent election secured by biometric iris scans—Iraqi
Kurdistan has only had one president. Masoud Barzani’s term may have
expired, but he still retains his palaces, his staff and control over
regional finances. (Somaliland’s democracy is not perfect: famine and
other regional crises have caused it to repeatedly suspend new parliamentary elections, although these should be held later this year).
Respect for the Private Sector Matters
How has an impoverished East African republic performed better than
an oil-rich Kurdish region? Perhaps the biggest difference between
Somaliland and Iraqi Kurdistan has been the sharp separation between
business and politics in the former. Traditionally, Somaliland’s chief
business and export has been livestock. It was the business elites in
the main port of Berbera that spurred the political compromise that led
to stability in Somaliland when the rest of Somalia descended into
chaos. While many businesses in Somaliland are now more diversified and
sophisticated, there remains a fairly sharp line between the business
and political classes. Businessmen might support political candidates,
but they seldom want to become political candidates themselves, nor do
they fear retribution if they back the losing candidate.
In Iraqi Kurdistan, in contrast, the political class is the business
class. The Barzanis and Talabanis do not hesitate to use their political
clout and sometimes military power to smother competition. This has
stunted the Iraqi Kurdish economy. Across Kurdistan, real estate
development creates a false illusion of wealth. But, what many
international workers and visiting journalists do not realize when
admiring Iraqi Kurdistan’s apparent success is that most apartment
buildings and hotels are largely vacant, and that the image of success
is superficial. The bubble will burst when state lands provided to those
with political connections under the guise of privatization runs out.
More broadly, the division between business and politics benefits
Somaliland in other ways. Both Somaliland and Kurdistan have benefited
from their respective Diasporas. But while expatriate Kurds seeking to
invest in Iraqi Kurdistan have learned to be wary, lest they lose their
investments to the region’s corruption, demand for ghost partnerships,
and lack of commercial law, Somalilanders have invested successfully at
various levels (Somalilanders joke that every returnee opens a coffee
shop).
It’s not just investment that matters. Seventy percent of Iraqi Kurdistan’s budget is dedicated to payroll,
a level on par with Cuba. The fact that 90 percent of Somaliland is
engaged in the private sector means that they generate wealth rather
than just use it. Perhaps this is why Iraqi Kurdistan is now more than
$20 billion in debt, whereas Somaliland exists debt free. The larger
business class in Somaliland means a broader tax base. Kurdistan is
relatively new at taxation; that the Barzanis and Talabanis do not pay taxes only undercuts budgetary stability.
Security without Nepotism
While the Somaliland budget – just a few hundred million dollars –
may be comparatively small, it is used to maximum effect. One of the
triumphs of Somaliland was uniting its various militias into a single
armed force after 1991, something Iraqi Kurds still talk about but have
yet to accomplish. The Somaliland government dedicates about one-third
of its budget to support this armed force and coast guard, to great
effect: While the rest of Somalia has descended into chaos, Somaliland
has remained free of piracy and has denied its territory to Al-Shaabab, a
militant group which several years ago swore allegiance to Al-Qaeda.
Iraqi Kurdistan, in contrast, has a budget far greater but had the
Islamic State develop partly in territory under its protection, and then
fled initially rather than fight. The reason for the discrepancy in
results may be that Somaliland does not anoint generals when they are in
their 20s simply because they have the right last name; rather, they
embrace a far more meritocratic military and security system.
A business-friendly atmosphere has amplified Somaliland’s ability to
do more with less. The region hosts Africa’s second-largest Coca Cola
plant, leading the Financial Times to note that
Somaliland has won “a business stamp of approval” despite lack of
diplomatic recognition. Coca Cola has had a historical presence in Iraq,
though war and Saddam’s dictatorship forced the company out. In 2006,
Iraqi Kurdistan attracted a franchise for its region, initially attached
to the ruling family, and subsequently acquired by a Turkish firm.
Leapfrogging Technologies
While Iraqi Kurdistan lags behind in technological
infrastructure—locals joke that one never needs to say goodbye with
Sirwan Barzani’s Korek Phone since the connection will invariably cut
out before the conversation is finished—Somaliland has become an
e-Republic, on par with countries like Estonia. While the physical
infrastructure such as roads in Somaliland are poor, the result of
little development aid, local companies have jumped on new technologies
to leapfrog into the future. The region’s cell phone providers are about
to unveil a nationwide 5G network. In 2009, Telsom, Somaliland’s
largest cell phone provider, launched a
currency transfer app called Zaad, a mobile money transfer system.
Today, almost all purchases are made via Zaad—even beggars in front of
mosques offer their Zaad numbers so they need not deal with cash. By
making money transfers electronic, Somaliland officials have been able
to fight against ghost employee scams which still create a drain on
Iraqi Kurdistan’s economy. Indeed, Iraqi Kurdish authorities still resist the introduction of modern banking because it risks the lucrative scams in which so many engage.
Perhaps the problem has been oil. The discovery of oil in Iraqi
Kurdistan has led to the worst excesses of rentier state corruption, and
led to a situation in which the economy is arguably worse off than
before the beginning of regional oil production. Such a situation may
also undercut Somaliland if DNO and Genel—the two major companies, both
of which have worked in Iraqi Kurdistan and both of which are currently
exploring blocs in Somaliland—confirm exploitable reserves.
Kurdish officials like to distract from accountability for their own
management failings by blaming Baghdad, unfriendly neighbors, a lack of
recognition for their ills, or any other bogeymen real or imagined.
Perhaps it is time for Kurdish residents, diplomats, and potential
investors to question just how a region like Somaliland with a similar
history, equivalent population, and the same geopolitical problems has
emerged from war and destruction not only as a democracy, but also with a
far healthier and more reform-minded economy than Iraqi Kurdistan’s.
Dr. Micheal Rubin
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