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Kurds In Iraq Face Economic Woes Amid Refugee Influx, Fight Against ISIS

ROBERT SIEGEL, HOST:

The Kurdistan Regional Government, the autonomous region of northern Iraq, is asking for help. The KRG, as it's called, is broke. The Kurds, who are an ethically and linguistically distinct minority in Iraq as well as in neighboring Syria, Turkey, and Iran, have been at the forefront of the battle against ISIS. And between war, budget disputes with the central Iraqi government in Baghdad and the plummeting price of oil, Iraqi Kurdistan is financially on the ropes.

One man charged with getting them off the ropes is in Washington this week - the KRG's deputy prime minister, Qubad Talabani. Welcome to the program.

QUBAD TALABANI: Thank you very much for having me.

SIEGEL: The Kurdistan Regional Government, which is a close ally to the U.S., is broke, and you're here. How much money are you asking for, and what you hearing?

TALABANI: We're facing simultaneous challenges in Kurdistan today. We are at war. We have a massive humanitarian crisis. We're housing 1.8 million IDPs and refugees as internally displaced people. We're, at the same time, facing unprecedented fiscal and economic challenges in Kurdistan both as a result of the war but also as a result of Baghdad cutting our share of the federal budget of Iraq from 2014 up until now.

This has led to us accumulating massive debt. And at the start of this year, we were operating on a fiscal operating deficit of close to $400 million per month. Now we've been able to enact some strategic reforms, some painful reforms. We've been able to whittle that number down to $100 million per month, but we are still in arrears towards our soldiers who are on the front lines and our civil servants who are working in the government.

SIEGEL: If you don't get help, though, what are the consequences, do you think?

TALABANI: The consequences are dire. ISIS is a threat to Iraq. It's a threat to Kurdistan. But the existential threat facing Kurdistan today is the economy. If we are not able to balance our budget to get Kurdistan out of this economic mess, it poses a direct threat to our ability to continue to hold the front lines against ISIS and ultimately degrade and ultimately destroy them as is our policy.

SIEGEL: The agenda of issues facing the Kurdistan Regional Government as you've just described - it would be daunting for a much larger, truly independent state. Is there anything that any government and the Kurdistan regional government can do to actually solve all the things you've just described?

TALABANI: We need support. We need help. We need direct budgetary support. We need technical support. We know what our illnesses are. We have diagnosed our problems. We have even charted a roadmap to get ourselves out of this fiscal and economic mess that we are in right now, but we cannot do this alone.

SIEGEL: Some of the problems that Iraqi Kurdistan is now experiencing would be problems no matter what - the number of people who have fled from other regions to find refuge there, for example, and the war against ISIS.

But the fact that oil prices are very low and the fact that Kurdistan is selling oil, I guess, at prices below the world price for odd, internal Iraqi reasons - that seems to really compound the economic crisis of your region right now. Can - do you simply need a higher price of oil to get out of the doldrums right now? Does that place a check on everything else were talking about?

TALABANI: The low oil prices has had a massive impact to our current economic state, but on the other hand, it's actually been a blessing because had it not been for the crash in oil prices, we wouldn't be looking at some of the reform initiatives that were undertaking right now. We wouldn't be looking at reducing subsidies. We wouldn't be looking at taking the government out of key sectors such as fuel and electricity. We wouldn't be looking at restructuring the size of our civil service and some of the real reforms that we've undertaken. So we're not letting this crisis go to waste. We're doing everything we can, but we cannot do this alone.

SIEGEL: Qubad Talabani, deputy prime minister of the Kurdistan Regional Government of Iraq, thank you very much for talking with us.

TALABANI: Thank you. Thank you for having me. Transcript provided by NPR, Copyright NPR.