Countries such as Iraq, which have not been involved in a capitalistic economic circumstance, are going to experience growing pains as they attempt economic development. Among the most important requirements will be access to capital, and likely in case like this, access to microfinance. My first question about the banking capabilities in the area reveal what I was expecting – very limited capability (this is important, as banking can help reduce and mitigate fraud and corruption on many levels). Here I inquire about the US State department reconstruction teams, as they at times have some microfinance teams embedded in them, and have economic development as one of their primary goals.
SM: How is the banking industry in Kurdish regions as compared to the rest of Iraq, which is to say, in the rest of the country it seems virtually non-existent? QT: Kurdistan’s banking system is growing, albeit slowly. In a cash-based society, it is difficult convincing Kurds to trust their savings to banks. But a relatively new bank in Iraqi Kurdistan is trying to build confidence in the struggling banking system by introducing ATMs and wire transfer systems to Erbil. In May 2006, Erbil’s Kurdistan International Bank for Investment and Development – one of only three registered private banks in Erbil and Dohuk provinces – was established. According to the bank’s chief executive director, it is the biggest private bank in the country with about 2,000 customers. Undoubtedly, building the trust between the clients and banking institution will take time.
SM: Throughout Iraq, the US State Department sends out what they call Provincial Reconstruction Teams. These teams attempt to help with economic development, offering microfinance programs and things like that. Have any of these been sent to Kurdistan? QT: As the Kurdistan Region of Iraq is being treated as one region, the US has placed a Regional Reconstruction Team (RRT) based in the Kurdish capital of Erbil. They are primarily tasked with improving local administrative capacity and strengthening the rule of law in Kurdistan. Given Kurdistan’s stability, it is likely that the RRT will show significant advancements in its activities throughout the year.
Additionally, in 2005, then-U.S. Ambassador Zalmay Khalilzad inaugurated a new Iraq PRT in Kirkuk. This was the third PRT, following launches earlier in the year in Ninewah and Babil provinces. The PRT works directly with the provincial government to help build national institutions by developing a transparent and sustained capability to govern, enhance security and rule of law, promote political and economic development, and meet the basic needs of the community.