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Debate on the Address

My Lords, when speaking in the foreign affairs debate following Her Majesty's gracious Speech in the past, I have always addressed my comments to the challenges and opportunities facing southern Africa. However, I was fortunate two weeks ago to join a trade delegation, led by the noble Lord, Lord Clement-Jones, to the Kurdistan region of northern Iraq. It was my first time there and I went with no prior assumptions. I shall address my brief contribution today to the challenges and, just as importantly, the opportunities which face that region. If ever there was a forceful argument for a multi-region federal model to resolve the stalemate in Iraq, the Kurdistan region exists as an institutional reality, with its own government and legislature. I was extremely impressed to see that the coalition of the KDP and PUK appeared to be working well, respecting the rights of minorities. I was impressed also by the high level of security and the ability of the local authorities to control insurgents coming into the area. One of my expectations before we went to Erbil, based on the travel advice which we received from the FCO, was that it was a high-risk area to visit. We had very limited security and certainly did not feel at all under threat. The perceived threat has certainly been a major reason why British companies have not yet engaged in the considerable opportunities that are springing up in the region. Clearly, there was a great deal of desire to see British companies engaging there. The hotelsin Erbil and Sulaymaniyah were packed with businessmen, predominantly from Turkey, Lebanon, Jordan, France and even Germany. Another deterrent to engaging with local businessmen was the difficulty that they were having in obtaining visas to visit the United Kingdom. I understand that the noble Lord, Lord Clement-Jones, will touch on this point in his speech. Among the many infrastructure challenges facing the region is the lack of adequate power generators, with Erbil and Sulaymaniyah being restricted to only four hours of electricity from the local grids every day. Will the Minister elaborate on what is being done to encourage international reconstruction funds to engage in the region? Another challenge, and potential opportunity, is the totally inadequate banking system in the region, with almost no facility to use credit cards. I had assumed from reading press reports that there was a tense stand-off between the Turkish Government and the KRG, but, from our discussions with various Ministers, it appeared that there was growing co-operation and consensus between the two regions. Certainly, the recent, acrimonious comments about the Kurds by Abdullah Gul, the Turkish Foreign Minister, which were widely publicised, were in Ministers’ opinion made more to appease the whims of his local constituency than to signal an act of aggression against the KRG. The big challenge is the equitable distribution of Iraq’s oil revenues, which account for 95 per cent of Iraq's GDP. The current constitution provides that the central Government will continue to be responsible for the operations of established oil fields and infrastructure, with regional governments taking responsibility for managing new exploration developments. The KRG was and is in the process of tabling a regional petroleum law, which specifically provides for revenue-sharing with the rest of Iraq. Clearly, a formula needs to be agreed for redistributing revenues equitably across Iraq. A source of much frustration to all the ministries in the KRG was the fact that the Kurdish region receives only 7 per cent of the central budget, although 15 per cent has been allocated to it. I would have liked to comment on the final goal of the KRG, which is to absorb the oil-rich province of Kirkuk and other disputed territories. The constitution calls for a referendum on the territories by the end of 2007. However, as I am a long way down the speakers’ list today, and we shall have afull debate on the Middle East and Afghanistan on5 December, I shall conclude and, I hope, participate in that debate.