We cannot talk about the state without the Kurdish currency.
With this article, I continue to analyze the financial sector in Kurdistan and to suggest solutions.
I would like to answer criticism from the readers of the previous post. I stated that banks should be established with state capital in Kurdistan.
The criticisms were that state banks were already numerous (it is known that their number exceeded 80).
My criticism was that there was no bank with a strong financial structure. I claimed that banks with a single branch, low capital, and functioning as “depository” rather than a bank did not improve the financial structure.
Let’s talk about the Kurdish currency
While the preparations for the Kurdistan independence referendum were being made and steps were taken based on nationalization, a very important issue was missed. The Kurdistan currency issue did not come to the fore.
While there are institutions that are the most important steps of nationalization, failure to prepare the currency should be seen as a vital mistake both in terms of independence and in the symbolic sense.
In the Kurdistan region, the borders are determined outside of some controversial regions, the flag is used, the parliament and the government continue to exist, the Peshmerga is entering the regular army, the governorships, municipalities, and other state institutions are operating. Although the Central Bank of Kurdistan exists, the absence of the currency, which is perhaps the most important symbol of statehood is a sad situation.
Importance of the Economic Independence
Note that the Iraqi Federal Government used money and finance as leverage as the first reaction to the independence referendum. In other words, he demanded the banks in Kurdistan to be closed.
While Kurdistan, whose army, parliament, flag, government, official language, and all kinds of state institutions have been formed, is defined as a de-facto independent state treatment in Iraq and the whole of the Middle East with these achievements, why do Kurdish administrators behave so sensitive when it comes to money.
The reason is simple; throughout history, the first act of statehood or declaration of independence is the declaration of the currency and subsequently the printing of money.
Unfortunately, Kurdistan could not do this because of the conditions. We cannot talk about the state without the Kurdish currency. There is the Central Bank of Kurdistan, but there is no Kurdistan mint. So what does the central bank do when there is no currency? How does it interfere with the market? By what measure will interest, foreign currency, and gold intervene? In other words, Kurdistan is experiencing such epic financial slavery, despite its epic resistance and land gains.
The Kurds want to independent, but they cannot interfere with the money in circulation in their country. I have to put it very firmly if you don’t have the currency you cannot be an independent country. You cannot intervene in your market, you cannot achieve economic development, and you cannot establish powerful banks.
Money is not just money.
The symbolic value that money carries is always higher and more valuable than the circulating value of money. The first work done by overlords or principalities, who declared independence in ancient times and the middle ages, was to issue money (or coins). Consequently, the most important step in getting rid of the dependent economy is to print your currency and circulate it in your home country. Since monetary relations in the long history of colonialism are not covered in this article, I will only content with an example of the dependent economy.
Although the Turkish Northern Cyprus side declared independence, since the Turkish Lira is the official currency, it constantly faces major problems. Even when the Northern Cyprus economy is doing very well, the depreciation of the Turkish Lira against the dollar affects the Cyprus economy dangerously. In addition to the dependent economy, you are under the control of which country’s currency you are using.
The internal problems and foreign policy of the country in which you use the currency make affect your economy instantly.
The bottom line is that if you don’t have a currency, you don’t have money.