Construction booming in the north

Six months ago, the main boulevard in the southeastern city of Sulaymaniyah in northern Iraq was lined by waste ground. Now, a marble-clad municipal library, the foundations of a huge new shopping mall, and a skyscraper to house one of the region's three mobile phone companies jostle for space alongside dozens of other building sites. The skyline of Dahuk governorate, near the Turkish border, is dotted with scores of ostentatious mansions for families made rich by cross-border trade. Even in Arbil, notorious for its labyrinthine bureaucracy, construction companies are working harder than ever before. "Business has increased by over 40 percent since last year," Nejmettin Majid, manager of the Rozy Construction Company, told IRIN in Arbil city's Shorj district. "We've been working to the limits of our capacities since February, but in colder mountain areas like Mergesur and Shaqlawa the boom has only just begun." It's not just the hot weather which is fuelling the frenzy. Wholesale changes to the structure of the Iraqi economy have played into the hands of the builders. "Until the liberation of Iraq, the Kurdish areas were under double sanctions, and the authorities' only means of raising funds was via taxation," explained Jotyar Boskani, owner of one of Sulaymaniyah's biggest construction companies. "Now, they have a budget direct from Baghdad." As a result, he added, the Patriotic Union of Kurdistan (PUK) authorities in control of Sulaymaniyah have cut taxes on construction from 5 percent to zero. In areas further north, under the control of the Kurdistan Democratic Party (KDP), taxes have been cut from 10 percent to 2 percent. The tripling of government salaries and the return of diaspora Kurds optimistic about the future of the region has also played a part, builders said. "Before 2003, contracts with United Nations agencies made up around 95 percent of our work," Rozy Company engineer Ferhad Ismail, told IRIN. "With money coming to us via Nairobi, the procedure was often slow. Now, 70 percent of our jobs are for individuals, cash more or less in hand." Increased construction has seen a corresponding explosion in house prices. A year ago, a 200 square-metre house in the up-market Shorj district of Arbil would have cost around $20,000. Now, prices are five times as much. In such a climate, it is only fair that labourers' wages should also have increased to US $20 a day, double that of last year. But one of the reasons behind the wage hike is the increasingly dire shortage of both skilled and unskilled labour. With prices fluctuating wildly, construction companies are unable to employ specialist electricians and carpenters as their western counterparts do. Instead, when they need labour, they have to go to the tea houses in the bazaar where workmen congregate. "For the last 10 days, I've gone down there to find men capable of cutting and laying tiles," said Nejmettin Majid. "I still haven't found anybody." That shortage is not just affecting companies such as Rozy, which make the bulk of their money out of private construction. Philip Peturs, executive director of the Kurdistan Reconstruction Organisation, a Kurdish NGO based in Arbil, has a contract from the Kurdistan Regional Government to rebuild 212 houses in three villages in the far north of Arbil governorate. Destroyed by Saddam Hussein's regime, Serke, Juze and Lera were rebuilt in the early 1990s, only to be severely damaged again during fighting between the KDP's Turkish-sponsored war against the Turkish Kurdish separatist group, the Kurdistan Workers' Party, or PKK. "If necessary, Serke and Juze can wait, because nobody is living there at the moment," Peturs told IRIN in Arbil. "But we must complete work on Lera before winter. This is an area where snow can be up to three metres deep in January, and the villagers are living in houses with huge cracks." His difficulty has been not just to find labourers, but also tankers to bring the water necessary for cement-making from the nearest river. It's a growing problem that may in part explain the increasing penchant among NGOs and their sponsors for what Arbil-based NGO Counterpart's project manager Biner Aziz calls the "butter before bread" option: help villagers with projects of fundamental importance to their community, and they will build houses themselves. It's the basic concept behind the USAID-funded Iraqi Community Assistance Programme, or ICAP, which has benefited five NGOs working in northern Iraq to the tune of $14 million this year. Aid workers go into communities, elect a committee to decide what the construction priorities are, and fund the first priority. In almost all cases, NGOs say, water comes top, with educational facilities usually in second place.