Levant Education returned to Kurdistan last week in what might be called ‘challenging circumstances’.
Our usual UK education exhibition was reduced to a UK-focussed seminar delivered on 2 campuses, Salahadin University in Erbil and Sulaymaniyah University. Students appreciated the opportunity to learn about the university application process for the UK, and learned about SKOLA language schools – the only exhibitor brave enough to join us this time!
The security situation in these cities is stable and life continues normally on the surface. However people are living day to day while central government funding remains blocked due to a lack of agreement about oil revenue sharing between Baghdad and the Kurdish Regional Government (KRG).
Civil servants in the Education and other Ministries are being paid sporadically. Funding for the HCDP $120 million p.a. scholarship programme has also been hit, with many students already in the UK being adversely affected.
Currently KRG budgets rely on technically-illegal oil sales, and international loans based on future oil revenues. The Kurdish Regional Government is progressing plans to increase oil sales through a bigger pipeline to Ceyhan refinery in Turkey, which is expected to pump 400,000 barrels per day (bpd) before the end of the year. Assuming oil maintains a price of $80 per barrel, and the oil continues to find buyers, this represents an income of $32 million per day, or $1 billion per month.
Direct sales of oil from the Kurdish Region anger the national government in Baghdad, which claims that oil not sold through the State Organization for Marketing of Oil (SOMO) are illegal. It is unclear at the current time who is facilitating the oil sales through Ceyhan, or who is buying the oil. However it is known that Turkey is buying oil from IS in Iraq and Syria – IS oil sales now account for about 3.5 per cent of Turkey’s oil supply.
Meanwhile the KRG now also controls Kirkuk, which holds the 2nd largest oil deposits in Iraq. Tens of foreign oil companies are drilling in Kurdish Iraq, including Chevron and Exxon Mobil. Peshmerga forces are on their way to Kobane, with international support.
The Kurdish Regional Government is banking on a scenario whereby the international community, principally the US, has no choice but to see the economic and military cards the Kurds are holding, and to recognise Kurdistan as an independent state.