Iraq classically had a centrally driven economy, run by the government and fueled by oil revenues that contributed upwards of 90 percent of Iraq’s GDP. The legacy of this command economy, where business was state owned and competition was repressed, decimated the ability of entrepreneurs in Iraq to develop and grow new businesses. The costs were too high and the risks too great.
Since 2003, as democracy has taken root in Iraq, the ability of entrepreneurs to develop and thrive in Iraq has become a reality in large part due to private sector advocacy efforts to change hostile legal and regulatory barriers for entrepreneurs.
For example, the CIPE sponsored Kurdistan Business Agenda (KBA), developed in 2007 by private sector associations, articulated issues hindering economic growth in 11 sectors of the Kurdish regional economy. Problems ranging from the lack of capital for farmers in the agricultural sector to the cost of electricity that lights businesses have since been corrected by the Kurdish government.
Working in parallel as the KBA reforms came into place, CIPE began organizing and implementing entrepreneurship training workshops around the country to assist would-be entrepreneurs develop the skills needed to start their own businesses. Part of this training entailed training entrepreneurs on an often overlooked, but incredibly powerful, tool to think and act as responsible active citizens and advocate for a less restrictive business environment. CIPE and its Kurdish partner the Kurdistan Economic Development Organization (KEDO) implemented this training program in 2008.
Two of those trained were Mr. Ayob Abdulkadir Ahmed and Mr. Hazad Omar. Before attending the training program both held menial jobs and thought that the Iraqi government should be the one providing them with jobs and wages. As you can see from this video, both developed successful businesses after the CIPE/KEDO training program.
Between the two of them, they have created 21 new jobs in the Kurdish region, Mr. Hazad by selling children’s clothes and Mr. Abdulkadir by running greenhouses to enhance produce growth. They pay above average wages to their workers and have learned to grow their profits.
Most importantly and critical to the long term success of democracy in Iraq, both changed their perceptions of themselves and what it meant to be responsible citizens. They now feel that going to government officials to advocate for reforms is important, and that they are not dependent on the government for revenue, but rather it is the government that depends on them to create value for Iraq. As Mr. Abdulkadir articulated, “I don’t rely on the government to create a job for me, now the government relies on me because I have created 20 jobs.”
They actively now advocate on behalf of the private sector, with Mr. Abdulkadir stating that he represents the interests of 400 farmers when he speaks to policy makers.
Both are active participants in democracy in the Kurdish region, and the culture of entrepreneurship and private sector constituency advocacy is fast becoming a normal way of life. The KBA has been the driver of so many market oriented reforms that now it is woefully out of date. CIPE is currently in the process of working with the Kurdistan business community to update it for 2011 to ensure that Mr. Omar and Mr. Abdulkadir continue to prosper and grow and also to ensure that the path to entrepreneurship for thousands of others like them becomes more accessible, less risky, and less costly.
Published Date: December 07, 2010