The recent attack against the Yazidi sect in northern Iraq (the worst terrorist attack inside the country since Saddam Hussein was overthrown) put the wolves trying to derail Iraq’s economic recovery at Kurdistan’s door [see my post Tragedy Knocks on Kurdistan’s Door]. If Kurdistan’s economic boom is going to continue, the wolves are going to have to be kept at bay. During my first visit to Kurdistan, the wolves managed to sneak in long enough to set off a truck bomb in very close to the hotel in which I was staying. This was a wake up call to the region –- reinforcing to the average Kurd and foreign visitor –- that Kurdistan is not immune to the violence of southern Iraq. For the most, however, the Kurdistan Regional Government has managed to maintain a peaceful and secure environment within its autonomous borders.

It has several things going for it that the rest of Iraq doesn’t:

• First, it is fairly homogenous. Longstanding clashes between Kurds and Arabs have forced the Kurds to gather in the mountainous area of northern Iraq for safety. Ethnic diversity, however, can’t be used as an excuse elsewhere in Iraq, which is mostly made up of ethnic Arabs.

• Second, the Kurds enjoy a religious tolerance that is missing elsewhere in Iraq. It is sectarian violence between Sunnis and Shi’ites that is ripping the rest of Iraq apart. Years of Sunni discrimination against the Shi’ite majority has prompted revenge rather than reconciliation. This type of internecine conflict, left unchecked, can rage for centuries. I’m sure the Kurds hold deeply felt anger against those who have persecuted them for decades. They seem to be moving beyond this anger, however, replacing destructive actions with productive actions.

• Third, the Kurds have elected a government that is functioning much better than the Iraqi central government. Kurd leaders have a vision for their part of Iraq and are actively pursuing it.

• Fourth, they have resources (water and oil), which means they are not a subsistence state.

• Fifth, they have people willing to learn and who are flexible enough to try new things.

• Finally, they have functioning and effective military and constabulary forces. Development begins with security.

All this sounds great for Kurdistan … but … the attack against members of the Yazidi sect and recent attacks in Kirkuk (which the Kurds hope will soon fall under their administration) underscore the fact their success is going be tested. Those trying to tear Iraq apart cannot tolerate a successful economic system in their midst. Kurd leaders know this and want to do all they can to protect their citizens without having to turn Kurdistan into a police state. They had enough of that treatment under Saddam Hussein. They already have put in place extensive border checks and plan on beefing up security.

As America has learned, security doesn’t come cheap. Insecurity, however, is much more costly. An economy cannot be sustained, let alone grow, in an unstable environment. Viewed from that perspective, investments in security are also investments in the economy. We strongly believe that a condition precedent to significant Foreign Direct Investment (FDI) flows is a stable security environment. That is why we believe that Kurdistan has to invest substantial resources in protecting the autonomous region from the violence in the south moving northward. This will increasingly be a challenge (as it is in most developed and developing societies) because Kurdistan increasingly will be opening itself up to trade, commerce and travel –- it will be creating critical infrastructure and expensive commercial developments — and as such, will increasingly be making itself more target rich and vulnerable to attack. Therefore, Kurdistan is in need of evolving its security environment to a higher level to reach an integrated and more sophisticated capability. I hope that Kurdistan will take that step forward to allow us to draw FDI into the region and make Kurdistan the Singapore of the Middle East.

At the start of the Iraq War, Tom Barnett talked about the “Big Bang” theory that seemed to be one of the motivating forces behind the Bush administration. That theory posited that establishing a prosperous, democratic regime would cause a chain reaction of reform across the Middle East. That seems like wistful thinking looking back at how events have unfolded — except in Kurdistan. If not a foothold, Kurdistan at least represents a toehold on that vision. The vision, however, will only spread when it is embraced by political leaders as well as populations of nearby countries. Anthony H. Cordesman, a security analyst with the Center for Strategic and International Studies (CSIS) opined in a recent op-ed piece that we shouldn’t expect democracy to take hold across the region, especially in Saudi Arabia, but that shouldn’t diminish hopes of reform [“Weapons of Mass Preservation,” New York Times, 16 August 2007]. Good governance (more than representational government) is required to foster security and prosperity. If Kurdistan can demonstrate that security and prosperity are the fruits of good governance, then at least a “little bang” would have been accomplished. The point is that the developed world has a stake in helping make Kurdistan the model region that could spark the little bang it hopes to achieve.

We are working on projects where we see the Kurdish people and government taking their first important steps to transparency and internationally recognized standards for economic development. They are seeking to understand and find systemic means of complying with the Rules of Engagement necessary to be a new and integrating member of the international community. This is the core of Enterra Solution’s Development-in-a-Box™ approach that we are beginning to execute in Kurdistan. As I have mentioned before, Development-in-a-Box is a highly flexible framework for post-conflict reconstruction and development. The process is often initially supported by the Pentagon (as in Iraq) and the State Department (primarily through USAID), whose programs work as a catalyst for attracting private sector investment which is necessary to sustain economic growth. Think of it as a Marshall Plan-in-a-Box — that firstly creates a wireframe for understanding the international standards for compliance, security, and management efficiency that are requirements for any emerging market country to integrate into the global economy. Secondly, it delivers, in a standardized push package, pre-configured technology solutions that can be radically adapted to meet the specific historical, socio-economic, cultural as well as other unique requirements of that nation or region. This adaptive push package allows a country to jump start itself in the industry segments on which it is focusing. Thirdly, it embeds the electronically delivered Rules of Engagement into the information system. That is, it automates processes in order to reduce human errors, improve effectiveness, and generate trust in those processes both locally and internationally. Lastly, local personnel are trained, educated and function as apprentices who learn the international practices and standards of that industry sector –- allowing them to have the capability transferred to their operation after a 3-year training period. Supporting this effort is a public information campaign that attempts to educate the population as to critical components of economic development.

The chances are that if Kurdistan’s success is going to catch on elsewhere in Iraq it is probably going to have spread out from the north and move south. Kurdistan would be safer if its current security were extended outward, creating as it were a buffer zone between its territory and instability further south. The Peshmerga, of course, would not be providing that security, but Iraqi military and constabulary forces. Kurdistan would be wise in helping train, equip, and position such forces within a buffer zone around its autonomous region. This kind of cooperation would also begin to improve Kurd-Arab relations — a reconciliation that must take place if peace is going to be sustained.

The repercussions of failure include a spillover of violence into Turkey, Syria, and Iran. As I’ve written before, I’m an optimist. I get excited every time I visit Kurdistan and speak with political and business leaders there. I’m determined to help make their visions a reality and I hold out hope that once achieved their success will inspire other leaders to adopt similar visions for their people.