VZCZCXRO3395
PP RUEHBC RUEHDE RUEHIHL RUEHMOS
DE RUEHKUK #0092/01 1040910
ZNY CCCCC ZZH
P R 140910Z APR 06
FM REO KIRKUK
TO RUEHGB/AMEMBASSY BAGHDAD PRIORITY 0583
RUEHC/SECSTATE WASHDC PRIORITY 0621
INFO RUCNRAQ/IRAQ COLLECTIVE
RUEHKUK/REO KIRKUK 0649

C O N F I D E N T I A L SECTION 01 OF 02 KIRKUK 000092 
 
SIPDIS 
 
SIPDIS 
 
BAGHDAD FOR ECON, POL, NCT 
 
E.O. 12958: DECL:  4/14/2016 
TAGS: ECON PGOV KDEM KCOR IZ
SUBJECT: STREET TALKS BUSINESS AND POLITICS IN A KURDISH 
NEIGHBORHOOD 
 
 
KIRKUK 00000092  001.2 OF 002 
 
 
CLASSIFIED BY: John Bradford, Acting Regional Coordinator, REO 
Kirkuk, DoS. 
REASON: 1.4 (b), (d) 
 
 
 
¶1. (C) INTRODUCTION AND SUMMARY.  On a visit to Ankawa District 
in Erbil City, business owners told IPAO an influx of migrants 
was pushing up real estate prices.  The owners complained about 
inflation, fuel prices, and how winning contracts required party 
membership.  Ankawa is a middle-class, predominately Christian, 
neighborhood and home to several international organizations and 
businesses, including the USAID compound.  END INTRODUCTION AND 
SUMMARY. 
 
Government Relationships Mean Everything 
---------------------------------------- 
 
¶2.  (SBU) Beirut Restaurant, owned by Pierre Moutrane, a 
Lebanese businessman in partnership with the mayor of Ankawa, 
has been open for just one month.  He said that as a foreigner 
he could have been a sole investor, but the partnership helped 
him with things like registering.  He said business was taking 
off slowly and that he was optimistic about the future.  Despite 
the name, the restaurant serves American food and caters to a 
primarily international clientele. 
 
¶3.  (SBU) Mahmud Burhan's internet cafe has been open for two 
years, but recently business has declined due to competition 
from the wireless industry.  Burhan's primary business, 
headquartered in a different part of Erbil, was selling 
satellite dishes in Mosul, rural parts of Erbil Province and to 
the U.S. and Korean military bases.  Burhan said he was trying 
to expand the company into wireless within Erbil City; however 
the KRG restricted private companies from accessing the 
industry. 
 
¶4.  (C) Burhan blamed the KDP for not giving small businesses a 
chance.  In addition to cornering certain markets, he said they 
have made it difficult for him as an independent to register his 
company to enter other computer-related fields or win large 
government projects.  He complained that party membership should 
not be a requisite for doing business.  Before Operation Iraqi 
Freedom, he said it was the same situation, except the Baathists 
received all the benefits.  In 1996 he joined the PUK, but has 
since renounced membership.  (NOTE: Through part of 1996, the 
PUK controlled Erbil, but the KDP took over later that year and 
has run Erbil since then.  END NOTE.) 
 
Real Estate Boom Fed by Migrants 
-------------------------------- 
 
¶5.  (SBU) Jalad, a senior partner in a real estate company run 
by three families, said the housing market in Ankawa District 
was strong because the government had given many poor people 
free land in exchange for political support.  Many had then 
turned around and sold the property for $50-60,000 and left the 
area.  In the last 2-3 months, between 400-450 families seeking 
sanctuary from the instability of southern Iraq had moved into 
the neighborhood, dramatically raising housing prices.  Jalad 
estimated that in today's market, a 125 square meter house sold 
for around $80,000, twice what it was a year ago.  He said the 
government supported the poorest families by paying their rent. 
He said the migrants were 90% Christian and 10% Muslim.  As an 
estate agent, Jalad charged 1% to both the buyer and seller and 
10% of the first month's rent.  The company paid $100 a year in 
property taxes. 
 
¶6. (SBU) Jalad said he was in the process of registering with 
the Ministry of Justice for a new construction company, both for 
his own financial benefit and because he wanted to be a part of 
the reconstruction of Iraq.  Although he is a member of the 
dominant KDP, he said party membership was irrelevant for 
receiving government support.  He said that 75% of his neighbors 
were communists, but that the government supported them anyway. 
Jalad said U.S. companies should invest in the Kurdistan region 
and locate their business in Ankawa as, thanks to the number of 
PSD teams associated with international organizations in the 
area, it was the safest neighborhood in Iraq. 
 
Inflation Doubles Prices and Costs 
---------------------------------- 
 
¶7. (U) Ramzi Odish returned from Sweden 2 1/2 years ago to open 
a Middle-eastern deli.  He said that although business was 
improving, they were still struggling.  The biggest problem was 
the rising cost of fuel.  He said he needed to pay $16 a month 
for electricity.  Other costs were unstable: for example, an LGP 
cylinder cost $20 a month ago and today $8, a year ago it was 
 
KIRKUK 00000092  002.2 OF 002 
 
 
$.34-$.40.  He said the high cost of fuel also affected his 
family, particularly his elderly mother and the children who 
lived in his house without electricity at night. 
 
¶8. (U) Haji Jalil, a Sunni Kurd with 11 children and 3 
grandchildren, owns a fruit stall on a corner of an Ankawa 
intersection.  He buys his imported fruit from the main fruit 
market and runs a brisk business.  Jalil said the Christian 
markets viewed him as strong competition because he undercut 
their inflated prices.  He used to be an importer of tomatoes 
from the south.  He said that business had improved since Saddam 
Hussayn's day, except inflation and the fuel shortage were 
problems.   Rental cost for a pick-up truck to transport fruit 
had increased from $1.34 last year to $4 this year.  Fruit 
prices had doubled: the price of an orange had risen from $.50 
to $1.  He said he earned $250 a month, in partnership with one 
of his 5 sons.  Two of his sons were drivers and earned about 
$670 per month.  As a member of the PUK, Jalil said he also 
received $20 a month from "Mam Jalal" - a sentimental reference 
to the head of the PUK and Iraqi President, "Uncle" Jalal 
Talibani. 
 
¶9. (U) Mr. Akira's family has run a well-stocked store with 
domestic and imported consumables since 1992.  In the last year, 
most products like diapers and crackers had doubled in price, 
while milk and cigarettes that were $2.50 a year ago had 
increased to $3.50.  He said he paid $500 a year in property 
taxes to the government.  Akira blamed inflation on the increase 
in energy prices. 
 
Comment: 
-------- 
 
¶10.  (SBU) Each owner, except the internet cafe and the catering 
company proprietors, appeared to be running a brisk business. 
The most-frequented shops appeared to be running on a U.S. 
dollar economy with both customers and owners handling several 
$100 bills.  Overall, business owners appeared frustrated by the 
rise in fuel costs and subsequent inflation; however, they were 
generally optimistic about the future. 
BRADFORD