ERBIL, Kurdistan Region—The aftermath of the Mosul operation could provide opportunities for economic growth, according to the Kurdistan Regional Government’s (KRG) minister of foreign relations.“The moment Mosul is over, that would open the door for economic activities, for investors to come, for commercial activities,” Falah Mustafa Bakir, minister of foreign relations, told Rudaw.“First, the security fear would be pushed,” Mustafa explained. “Second, people would realize that not only Kurdistan Region but the rest of Iraq and the liberated areas need to be rebuilt, which means that there would be opened opportunities.”Since the war against the Islamic State (ISIS) broke out in 2014, the Kurdistan Region has faced severe financial challenges including a massive wave of refugees and internally displaced persons (IDPs) from ISIS-held territory and drops in foreign investment, resulting in an increase in unemployment and overall poverty.On top of fighting a war, Baghdad withheld Erbil’s share of the national budget, what Mustafa called the “first shot that hit the region.”

“This has been tough,” Mustafa stated simply. “The last two years have been tough for Kurdistan and Iraq.”





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“Economic activities shrunk,” Mustafa went on to explain. “There was a lack of resources in the market. The region was affected with an increase of 30 percent of its population. Economic growth went down. Poverty went up. Unemployment went up.”According to Mustafa, the war has been “Costly, costly in terms of human lives but also in terms of resources.”In addition, the KRG has had to assume responsibility for 1.8 million refugees and IDPs while plummeting oil prices gouged the region’s income, creating a whirlwind for an economic downturn.“When there is no security around, foreign direct investment has almost stopped,” Mustafa said. “Investment has almost suspended or stopped. Commercial activities have decreased.”The problems were compounded as ISIS controlled large amounts of territory, virtually immobilizing commercial transportation and, therefore, commerce.“The fact that ISIS controlled Mosul and large portions of the western part of the country,” Mustafa explained, “and the fact that there were no ground routes between the Kurdistan Region and the rest of Iraq, meant that trade and commerce were not ongoing, therefore it has been affected.”Although Mustafa believes there are reasons for optimism for economic growth in the aftermath of the Mosul operation, he acknowledges new difficulties will come, namely managing the city after its liberation.“Who would hold the city? Who would govern it? Who would provide security? Who would provide services? What kind of structure would be put in place?” Mustafa asked, explaining the issues that need to be addressed between Erbil and Baghdad. “That political leg is important for these kinds of details to address properly.”“So that’s why it is important for Baghdad and Erbil to be engaged in that dialog to talk about the day after,” Mustafa said.One effect of the military option the Kurdistan Region is trying to prepare for is the immense displacement crisis the fighting will cause, resulting in an influx of IDPs.“We are expecting between a quarter of a million and three quarters of a million to come,” Mustafa said. “That would be a disaster. We believe a humanitarian catastrophe is approaching unless we move and we move quickly.”Stephen O’Brien, the UN’s under-secretary general and emergency relief coordinator, told Rudaw that in addition to the mass numbers who are expected to flee the military offensive, the UN is concerned about those who will stay in the city.“There will probably be a retention of possibly as many as 200,000 people or so in the center of Mosul, which will be very difficult for those who are trying to ensure operations to not put people at even further risk than they’re already suffering.”After the military offensive and the mass displacement, the challenge will be reconciliation, rebuilding trust between people who were, or were perceived to be, on opposite sides of the conflict.“How can we have a kind of situation where these people reconcile with each other and remain within the same structure or will it have to change?” Mustafa asked, listing the communities in Mosul who he said have suffered the most, “such as the Yazidis who have suffered genocide, the Christians who have suffered, the Kurds, the Turkmen, and others who were betrayed at the hands of their Sunni Arab neighbors or Sunni Turkmen neighbors in ISIS.”“What kind of formula do we have in mind? What will happen? If it is going to change, then in which direction?”