Foreign companies resume regular activity in Kurdistan Most international companies in Kurdistan that had suspended their activities have resumed regular operations again now that ISIS terrorists have been beaten back from the Kurdistan Region’s borders. The Peshmerga forces have reclaimed large areas from the terrorists with the help of the international coalition. The deterioration of the security and military situation from the end of July to the beginning of August along the borders of the Kurdistan Region had a direct or indirect impact on the work and activities of foreign companies operating in the Kurdistan Region, particularly the airline industry and the oil and gas sector. According to a survey conducted by the KRG Department of Company Registration, none of the international companies registered in the Kurdistan Region requested removal from the registrar of listed companies. A total of 2955 foreign companies are registered to operate in the Kurdistan Region, including: 1329 Turkish companies, 335 Iranian companies, 157 Lebanese companies, 155 Emirati companies, 125 British companies, 117 American companies and 81 German companies. Airline industry When American airstrikes first commenced on targets bordering the Kurdistan Region, a number of airlines temporarily suspended flights or decreased the frequency of flights to and from Erbil International Airport. Erbil International Airport Director Talar Faiq Saleh told KRG.org, “For a period of one week, a number of airline carriers stopped flights in and out of Erbil, and others scaled down the number of flights. However, after a short time, the majority of international airlines resumed regular flights to the airport. Currently, of the 23 different airline carriers with flights to Erbil, only five have yet to resume flights. These five are: Etihad, Emirates, Fly Dubai, Air Arabia, and a Greek charter airline.” Ms Saleh added that passenger travel during the months of May, June, July, and August increased by 10 percent, largely due to Kurds from the diaspora visiting Kurdistan during this time of the year. The security situation has also had an impact on Slemani International Airport, although on a smaller scale. Slemani International Airport Director Taher Abdullah told KRG.org that during the same time period “only two of the 11 airlines flying to and from Slemani International Airport suspended operations, Fly Dubai and Royal Jordanian, and that was only for two to three days”. He added, “The reduction in flights to Erbil prompted an increase in demand for flights to Slemani, leading to an increase in the volume of passengers.” Oil and gas sector The majority of the oil and gas companies operating in the Kurdistan Region have resumed their activities. A statement from the KRG Ministry of Natural Resources explained, “Kurdistan’s oil and gas infrastructure remains unaffected by the operations against terrorists. All security forces are aware of oil and gas assets and are committed to continuing to protect them. The Oil Protection Force is at all sites in Kurdistan and remains vigilant, having bravely prevented the terrorists from accessing oil and gas facilities. The statement continued, All of our major producing assets continue to produce normally and continue to be staffed by the same committed professionals as before. There was an easing of exploration activity in blocks nearest to the terrorist activities. IOCs maintained their local offices in the Region while most foreign staff temporarily relocated. The majority of IOCs are now returning to their full work schedule with some 70 percent of blocks operational. About 95 percent of the service companies have returned and are resuming work.” Implications for relations with Baghdad In addition to the security situation affecting the Kurdistan Region, the ongoing disputes between Baghdad and Erbil, particularly the decision to withhold the Kurdistan Region’s share of the federal budget and the salaries of civil servants, has affected the economy overall. Barzan Salih Mustafa, FF Steal Company’s Director of Government Relations and board member, told KRG.org, “Withholding the Kurdistan Region’s share of the budget and the disputes between Baghdad and the Kurdistan Region have more implications for our companies than the threats posed by ISIS. This is due to increased expenses and lower demand for steel and iron.” Mr. Mustafa explained that FF Steal, a Turkish company for steel and iron, had suspended its activities for only one day due to recent security concerns. “We have resumed our normal activities. The owner himself visited all the employees and reassured them and none of our expatriate staff left Kurdistan.” Foreign companies and the business community hope that after the return of security and political stability in Kurdistan, businesses and trade activities will return to the same levels as before. Mr Ziad Hassan, Branch Manager of the Lebanese BBAC Bank in Erbil, said that despite the recent security situation, his bank did not close its Erbil branch and none of the staff members left Kurdistan. He told KRG.org, “We believe injecting liquidity into the markets will help to rapidly increase economic and trade activity; we hope this will be the case.” KRG
Posted on: Thu, 02 Oct 2014 09:18:57 +0000