Iraq Infinite opportunities until stability is completed and investment environment is in place

A vision that is starting to clear up

Iraq has been largely affected by the ISIS terrorist phenomenon while oil prices dropped, which drained the country’s resources and assets to a big extent, and led to new waves of internal migration of more than 4 million people, in addition to previous migration movements. According to the United States statistics, around 10 million people representing 27% of the population are now in need of urgent humanitarian assistance.

Despite the extreme difficulties and the tragedy that ensued from the disturbances resulting from terrorist events since 2014, Iraq was able to fight against this phenomenon in a record time. It is expected that Iraq will succeed very soon in regaining control over all national territories. There are now large areas of Iraq that enjoy stability, economic activity and prosperity, and that provide profitable investment opportunities.

 

Why to invest in Iraq?

Iraq has the fifth largest oil reserve in the world and needs considerable investments for reconstruction and the development of infrastructure. There are also profuse opportunities for investing in the sectors of infrastructure, traditional and renewable energy, industry, construction, health, tourism, agriculture and security. However needs for investments are infinite in all areas to establish new projects or update existing projects. Iraq’s market is large and growing: it imports large quantities of agricultural and food products, of machines, equipment, consumption goods and defense material. Thus, Iraq is still drawing much interest in terms of international investment, while major world economies are competing to invest in the country and establish partnerships in light of the promising future perceived in Iraq.

 

Major areas for investment:

-     Oil and gas extraction, oil by-products and fertilizers.

-     Construction material industries.

-     Regions within the governorates.

-     Different areas of processing industries.

-     Large investment opportunities in agriculture and in modern and up to date machinery.

-     The tourism sector: hotels, leisdure and sport facilities.

-     Promising investments in the banking sector.

-     The housing sector and the infrastructure projects, especially in the sectors of electricity, water, transport, communication, internet and mobile phone services, alongside other facilities like airports and ports.

-     Specialized health and hospital sector where there is a high demand, in addition to a promising market in different medical areas.

-     The education sector at all levels and in all specializations.

-     Marketing and retail sectors, shopping malls and commercial resorts.

 

Evolution of investment projects according to the top 10 sectors between 2012- 2016

 

Source: Fdi markets

 

Major countries investing in Iraq between 2012 and 2016

 Ibid

 

Requirements for the development of the investment environment

Foreign investors face several hurdles due to red tape, complex procedures, and cost margins initially resulting from bribery and security protection costs, in addition to long and costly Customs procedures, frequent black-outs, difficult access to finance and to commercial conflicts settlement, delays in payment of governmental dues, in addition to legislations changing and being different from one area to another.

In parallel to the importance of laying the foundations for peace and stability, it is of utmost importance to rethink the investment climate in all areas, particularly to fill the gaps featured in the following graph.

 

Iraq’s ranking in the World Bank indicators for ease of doing business for 2017 among 190 countries

 

Source: World Bank Doing Business 2017