It’s long been the dream of Iraqi Kurdish leaders to transform Iraqi Kurdistan into a new Dubai. Kurds have long bridged the delicate balance between the United States, Turkey, and Iran. While huge swaths of the country from Baghdad to Mosul and Kirkuk devolved into sectarian chaos and civil war, portions of Iraq controlled by the Kurdistan Regional Government (KRG) remained relatively stable and secure. The KRG sold the rights to explore for oil and gas and international oil companies found vast reserves. Here, for example, is the website to KRG’s campaign to encourage international investment. Ordinary Kurds had every expectation they would benefit from this windfall as money poured into the region. It didn’t work, however.

The KRG consistently has reneged on payments to oil conglomerates and on commitments to investors, often blaming Baghdad for failing to remit its portion of Kurdistan’s budget and, more recently, the strains of fighting the Islamic State.

Blaming Baghdad is often a successful strategy to deflect public blame away from the true costs of corruption and mismanagement. After decades of discrimination and worse, Kurds readily accept the narrative that the fault lies in Baghdad. But not only is a Kurd now Iraq’s finance minister, he is also Masoud Barzani’s uncle; he treats KRG with transparency. Prime Minister Haider al-Abadi also struck an oil deal with the KRG shortly after taking office. When Kurdish salaries were not paid in December 2013 in Sulaymani, for example, the reality was that Baghdad had transferred the money to the KRG, but the money had somehow gone missing between Erbil and Suleimani. And while the cost of fighting the Islamic State is high, a portion of that expense is money siphoned from the treasury and paid to ‘ghost’ peshmerga; troops which exist on paper but not in reality. Indeed, the ghost employee scam is one reason why the KRG is so reluctant to embrace modern banking and electronic transfer of salaries.

The KRG regularly disparages any independent Kurdish journalist who writes about corruption or nepotism and, like the Iraqi government under the Baath party, regularly interrogates Kurds returning from travel abroad — including State Department-organized International visitor programs — to ensure they have not spoken to analysts or journalists whom the KRG fears would report critically about the situation in the KRG. Conversely, the KRG showers former U.S. government officials, retired military officers, and think tank analysts with gifts, contracts, and cash in order to sing the KRG’s praises.

Journalists may be superficial — they parachute in and out of a region quickly — but responsible investors and the international markets are not so easily swayed by rhetorical flak. They want to know the facts, see the books and, in areas where opacity is the rule, be convinced that the government line is rooted in reality.

Well, as cash has dried up, the KRG has recently tried to tap international debt markets for a five year, one billion dollar bond.  The market told them it would cost 12 percent.  In comparison, Ivory Coast debt with a much longer maturity — December 2032 — yields 6.43 percent, and Iraqi government debt with a 2028 maturity trades at 8.2%.  Twelve percent for a five-year paper is a slap in the face and a sign of complete lack of confidence in the KRG’s stewardship. Indeed, while the Kurdish government drops hints about its desire for a referendum leading to independence — hints it drops every few years but upon which it never acts — the international market now signals that the Kurds are very close to insolvency and that they believe the KRG has driven the Kurdish economy into the ground. Indeed, it says a great deal that international investors now have far greater confidence in the future of Iraq than in the future of Iraqi Kurdistan.

If Kurdistan were truly as democratic as its representatives say it is, it is long past time for the Kurdish parliament to ask very tough questions about the president and premier’s stewardship of the economy, investor relations, and rule-of-law.