As Iraq bans alcohol, Kurds mull economic opportunity

As Iraq bans alcohol, Kurds mull economic opportunity
File photo (Reuters)
5 years ago

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SULAIMANI – Iraqi lawmakers in Baghdad approved a tax and revenue bill for the country’s municipalities on Saturday (October 22) that included an unexpected article that bans the sale, production and import of alcohol in the country.

Iraqis reacted with surprise to news of the prohibition as much of the country and world have been focused on military operations against the Islamic State (ISIS) near Mosul and inside Kirkuk.

A Change Movement (Gorran) member of parliament – who declined to be identified in this report due to the sensitivity of the vote – told NRT the last minute addition was submitted by State of Law Coalition members as a fourteenth and final article to the bill that outlines taxes to be levied on cigarettes, gambling, and soft drinks, among other items.

Liquor stores in the Iraqi capital were open on Sunday though as the measure is not expected to take effect for another month and according to officials, the ban will not affect the Kurdistan Region where alcohol is widely available in stores, bars and restaurants popular with both locals and foreigners.

“This law doesn’t affect the Kurdistan Region, it’s just for areas under the Iraqi government’s jurisdiction,” the MP said. “That’s why [Kurdish MPs] did not consider it seriously.”

Economic analyst Mustafa Dalo said however that prohibition would push the industry underground and leave shop owners, producers and transporters without a stable income in a country already struggling with high unemployment.

“There are more than a hundred alcohol shops in Baghdad, each alcohol shop has at least two to three employees, plus the people who work in main distribution centers, the logistics workers and people who have been in this profession for a long time. What will the ban lead to? More unemployment, hundreds or maybe thousands of unemployed people,” Dalo said.

“People here in Baghdad usually buy alcohol from regular, authorized alcohol shops,” he added, saying buyers would be forced to search for alcohol, much of it fake, on the black market centered in some of the Iraqi capital’s most dangerous neighborhoods.

“People won't stop buying alcohol.”

Opportunity for Kurdistan’s tourism sector

While the ban will not affect consumption and distribution in the Kurdistan Region, local officials and business owners are cautiously hopeful it will lead to even higher growth in domestic tourism for the financially struggling Kurdistan Regional Government (KRG).

The region’s Ministry of Municipalities and Tourism reported 211,000 arrivals in just ten days for the Eid-al-Adha holiday in September, 82 percent of which were tourists from south and central Iraq.

That number was a significant jump from the 108,000 domestic arrivals recorded by the region’s Board of Tourism just two months earlier during the Eid-al-Fitr holiday marking the end of Ramadan.

Kurdish authorities recognizing the economic opportunities presented by eased restrictions for domestic tourists have gone as far as setting up special desks at checkpoints to expedite processing and welcome visitors.

“This law is a big advantage for tourism in Kurdistan,” the Gorran MP said, but added it could also cause unwelcome results for the region’s cities and towns, which remain largely conservative.

"The decision will also have a negative effect in the Kurdistan Region as it may result in greater demand for alcoholic drinks," the MP said.

Local residents of Erbil’s Christian quarter Ainkawa – previously regarded as a liberal haven for its alcohol shops and limited nightlife scene in otherwise conservative Erbil – held mass demonstrations in October 2015 against rowdy, drunken behavior and the alleged presence of brothels they said were disturbing the community and taking away from desperately needed social services and improvements in infrastructure.

Western-style nightclubs and bars were forced to shut down and liquor stores saw new restrictions limiting business hours from 5 to 8 pm as well as a reported ban on selling cold beer to discourage buyers from drinking in the streets.

Despite the enacted controls, business owners are waiting to see how the new measure in the south will change the economic and cultural environment in the Kurdistan Region.

 One alcohol distributor based in Erbil who asked to remain anonymous expressed surprise at the parliament decision as well as uncertainty with how the region would be affected.

“Actually we are waiting to see how this will take effect in the [Kurdistan Region], then we will know if it's going to affect us well or not,” the distributor said. “They will be boosting our economy here.”

(NRT – Delawit Mesfin)