Kurds protest in north Iraq as discontent grows with government

By Isabel Coles ERBIL, Iraq (Reuters) - Kurds protested and went on strike in northern Iraq on Wednesday in a show of growing discontent that threatens to further undermine stability at a time when their region is at war with Islamic State. Teachers, hospital workers and other public sector employees have taken to the streets for nearly a week demanding their wages from the Kurdistan Regional Government (KRG), which is three months in arrears. The demonstrations are the most sustained unrest in the autonomous region of Kurdistan since the start of an economic crisis compounded by the conflict with Islamic State and a drop in oil prices that has pushed the region to the verge of bankruptcy. "The Kurdistan regional government and officials are to blame," said Ari Ahmed, a 50-year old secondary school headmaster in the city of Sulaimaniyah. "If this is not resolved, we will continue our protest". In the decade following the U.S.-led invasion of Iraq, Kurdistan insulated itself against violence in the rest of the country and enjoyed an economic boom fuelled by rising Iraqi oil revenues, of which the region received a share. The bubble began to deflate in early 2014 when Baghdad slashed funds to the region after it built its own oil pipeline to Turkey in pursuit of economic independence. Then Islamic State overran a third of Iraq and attacked Kurdistan, scaring off foreign investors and displacing more than 3 million people of which nearly half have sought refuge in the region, further straining its resources. “This has all accumulated into a dire situation,” said Kurdistan Regional Government (KRG) spokesman Safeen Dizayee. “If this continues and the price of oil keeps dropping, it’s going to create more problems for us.” OIL MONEY The KRG needs roughly $1 billion (653.73 million pounds) per month to break even, of which $700 million is poured into a bloated public sector that employs 1.3 million people in the region of around 5 million. The Kurds have sought to cover those costs by ramping up independent oil sales since early June, effectively annulling a deal with Baghdad whereby the region agreed to contribute 550,000 barrels of oil per day (bpd) to Iraqi exports in 2015 in exchange for the reinstatement of budget payments. A record 620,478 bpd were exported independently from the region in September, but many Kurds question how revenues are spent: "Oil money should be for the people, not for the mafias," read a banner carried by protesters. "They (officials) talked about the economic independence of Kurdistan, but now we realise we were better off before," said teacher Nawshirwan Hama Gharib, who joined the protests in Sulaimaniyah. Poor services and political deadlock have also triggered an exodus of Kurds to Europe. Rival factions have yet to agree on the terms of an extension of President Massoud Barzani's mandate, which expired on Aug. 20. The last serious civil unrest in the region was in 2011, when Kurds protested against corruption and nepotism. "If we don't get any result from these protests we will resort to other means," Gharib said. (Editing by Michael Georgy and Andrew Heavens)