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regional repercussions
syrian conflict causes economic issues in iraq

Hana Raouf
As violence in Syria worsens, the economic repercussions are felt in places like Iraqi Kurdistan – Syria is usually a conduit for goods coming into the semi-autonomous region. And Sulaymaniyah’s car…
10.05.2012  |  Sulaymaniyah
Cars in Erbil, Iraqi Kurdistan: vehicle buyers are wary of rising prices.
Cars in Erbil, Iraqi Kurdistan: vehicle buyers are wary of rising prices.

The market for vehicles in the northern city of Sulaymaniyah is usually a thriving one. But lately things have changed. A tour of some of the approximately 86 car sales depots and showrooms in the area indicates this: there are plenty of people looking at the cars but nobody was buying.

And, according to car dealers in the area, this is due mainly to unrest in neighbouring Syria. “Selling and buying cars is not profitable at the moment,” a local vehicle dealer, Atta Rasheed, says; he’s standing in the shadow of a wall with some of his equally disenchanted colleagues.

“The rise in prices makes it difficult for us to sell as many cars as we used to.”

Previously the work was profitable. After the 2003 US-led invasion of Iraq, the car business in the semi-autonomous state of Iraqi Kurdistan took off. Cars would come to Iraqi Kurdistan via a fairly circuitous route – they would leave the Gulf States, then pass through Syria before ending up in Turkey. From Turkey they would cross the border into Iraqi Kurdistan where they would be sold on the local market.

Drivers importing the cars took this route because it allowed them to avoid the more dangerous areas of Iraq, mostly Sunni Muslim provinces like Diyala and cities like Mosul, where some extremist militias continued to cause unrest and violence. However, since the uprising in Syria and the Syrian military’s heavy reprisals against protestors, the number of cars coming this way has slowed.

“Drivers who used to bring cars from Syria are reluctant to go there now because the roads are not safe,” another car dealer, Asso Kareem, says. “And those who still do the job are asking for more than double what they were getting beforehand.”

Previously drivers were getting around US$800 to make the trip. “Now they’re asking for US$1,800,” Kareem complains. The drivers have also talked about the danger of being kidnapped by unidentified armed groups in Syria. “In many cases, they take the cars from them and demand money to give them back,” Kareem explains.

The impact of all of the above has resulted in average car prices rising over US$1,000 per vehicle.

But not all of the vehicle dealers in Iraqi Kurdistan believe this version of events. One sales manager, Asso Adham, who works for Niva, the authorised dealer for Ford in the region, says that the Syrian issue is just an excuse. “The events in Syria are not the only reason behind the increase in car prices,” Adham says. “Car dealers are taking advantage of these events in order to increase their prices and to make more profit, saying that the roads are more dangerous.”

Rasheed denies this. But no matter what, he also knows that his buyers remain reluctant to purchase a new car right now. Because if the situation in Syria worsens, then prices will remain high. But if things get better, then the prices will come back down. “So they are hedging their bets,” Rasheed says.