The Kurdistan Region, which witnessed ongoing prosperity and security in past decades when compared to other parts of Iraq, suffered a critical economic crisis between 2014 and 2017.
The fiscal downturn emerged in 2014 after Baghdad stopped releasing Erbil’s share of the national budget. According to senior Kurdish officials, other factors had an effect as well, including the fight against the Islamic State, an international drop in oil prices, and the influx of 1.8 million refugees and Internally Displaced Persons (IDPs) from Syria and other parts of Iraq to the Kurdistan Region.
In 2017, many foreign investors and companies began to leave after the KRG’s September independence referendum, which saw a landslide majority favoring statehood, followed by Baghdad’s collective punitive measures which included embargoes and an international flight ban on the region’s airports.
Relations between Erbil and Baghdad began to ease in the first few months of 2018 with airports being re-opened for international flights and the economy making its first steps toward recovery.
Over the past year, the KRG has tried to boost the autonomous region’s finances and attract foreign investment in various fields, especially after recovering from the critical financial crisis it had suffered since 2014.
In December, local officials from Kurdistan's investment board said that investment in the region had considerably increased over the past few months, reaching a total of $3.67 billion.
Editing by John J. Catherine