Mam Rostam (Iraq) (AFP)

Since the fall of Saddam Hussein in 2003, the northern Kurdish hills had been abandoned: with a new local power, an increased budget and the oil manna, the farmers became civil servants.

Today, without pay, they are returning to the land.

Abdallah Hassan, 51, is one of them.

This is "the first time" in almost 20 years that his grapes near Mam Rostam, about fifty kilometers from Erbil, have been harvested, he told AFP.

Agriculture was a key sector in embargoed Iraq, before the American invasion, and these vines in particular generated a living income.

This is again the case in 2020, the year of all disasters for the Iraqi economy, one of the most oil-dependent in the world, according to the World Bank.

Associated with "pre-existing weaknesses" - the permanent political crisis, conflicts for four decades, the almost non-existent banking system, among others - the vertiginous drop in crude oil prices and the Covid-19 pandemic "could lead to the 'economic collapse and a new cycle of violence ", warns the institution.

In autonomous Kurdistan, these calamities came on top of the endless budgetary negotiations with the central power.

But if the regional economy is collapsing today, it is also because the Kurdish authorities have not established viable mechanisms to ensure long-term prosperity, argues economist Bilal Saïd.

- Wages, political weapon -

In addition to the oil rent, "the part of the budget allocated to Kurdistan by Baghdad and the income generated at the border posts with Turkey and Iran have injected a lot of money" into the regional funds, he explains to the AFP.

But "instead of investing in agricultural, industrial, health or tourism infrastructure, the Kurdish government has only developed the oil sector".

Another aggravating factor: as in Baghdad, the leaders of Erbil have distributed with a vengeance the positions of civil servants to ensure electoral loyalty, creating a hypertrophied - and yet inefficient public sector.

The region has 1.2 million civil servants - 40% police and military - for five million inhabitants.

The monthly payroll expense is over $ 725 million.

Since January, she has only been able to pay six months' wages and in June decided to cut off those exceeding $ 250 per month.

The overall envelope now represents $ 591 million.

Nonetheless, unpaid bills continue to accumulate, despite the 260 million sent monthly by Baghdad.

For researchers at the London School of Economics, this is the consequence of a system that is at the end of its rope.

"The dominant parties reward political loyalty with civil servant salaries; then use public contracts to enrich close businessmen; finally, ministerial budgets are diverted for personal or partisan purposes," they detail in a report.

- Economy not "healthy" -

"We are rich when oil is expensive and poor when it drops", summarizes Mohammed Choukri, head of the Kurdistan Investment Committee.

"I don't call it a healthy economy."

To begin the diversification, its committee has just granted 60 licenses to investors, mainly in agriculture and industry, for 1.5 billion dollars.

But it all depends on foreign investors, promises to build dams, roads and railways ...

And the impatience of local industrialists is growing in the face of competition from Iran and Turkey, whose currencies have continued to be devalued while the Iraqi dinar remains pegged to the dollar.

Baarz Rassoul, whose company Hend Steel produces 50,000 tonnes of cast steel per month, pleads for "higher customs taxes and better border control".

And when he tried his hand at agriculture, he made the same observation.

"Producing a kilo of cucumber cost me 21 cents while Iranian or Turkish cucumbers sold for 13 cents in the Erbil markets," told AFP the man who finally dismantled his 50 greenhouses.

The Kurdish Parliament has not voted any budget since 2014. It is impossible to know the amount of customs, oil or tax revenues;

nor even the expenses.

According to Kurdish Prime Minister Masrour Barzani, who spoke to Parliament at the beginning of October for the first time since the formation of his government in mid-2019, the autonomous region has accumulated 28.4 billion dollars in debt.

Of which nearly nine only in unpaid wages.

© 2020 AFP