The dollar creates a “problem”.. Five complications facing financial investment in Iraq
Baghdad today – A member of the Parliamentary Agriculture Committee, Representative Hussein Mardan, said today, Friday (August 25, 2023), that there are five complications facing financial investment in Iraq.
Mardan said in an interview with “Baghdad Today”, that “investment in its general sense needs a stable environment, and with a reading of the situation in Iraq after 2003, which was characterized by repeated security unrest, gives us an indication of the magnitude of the challenges, especially since any investment needs years in order to provide its environment.”
He added, “Corruption is one of the most prominent complications facing financial investment in Iraq, as well as legislation, laws, and flexibility in dealing with banks, not to mention the presence of countries that use currency as a “geopolitical” weapon in crises, which makes the matter open to challenges.”
Mardan pointed out, “Iraq’s location and natural resources are important incentives that can be invested in creating a positive climate in attracting financial transactions, but on the other hand, the matter faces complications, the most prominent of which is the need for a banking environment with strategic depth.”
Iraq is the second largest oil producer in OPEC, with an average of 4.5 million barrels per day, of which it exports about 3.4 million barrels, as the Iraqi government relies on revenues from the sale of crude to cover about 95 percent of its expenditures, and oil reserves in Iraq are considered the fifth largest oil reserves. Confirmed in the world, amounting to 145 billion barrels.
In the same regard, the economist, Adel Al-Dalfi, says that incoming (foreign) investment in Iraq will have a major role in reviving the economy, especially since the Iraqi economy is a rentier economy that depends on oil, and therefore it is necessary to face the challenges associated with that in the context of the decline and rise in prices. Oil, and the economy is constantly dependent on these indicators.
The economist refers to the plan of the Prime Minister, Mohamed Shia Al-Sudani, to diversify the economy and develop non-oil sectors, with the aim of opening a broad climate for Arab and foreign investors and overcoming the difficulties in front of them, through several measures, including the amendment of Resolution No. 245 of 2019, which determined The capabilities of the National Investment Commission, and the amendment came to grant the Commission wide powers of administrative and legal movement, by offering to reduce bureaucracy in the procedures taken.
Among the measures that Al-Dalfi refers to, in the context of encouraging foreign investment, is the encouragement of the Central Bank to grant loans to investors if the completion rate of existing projects reaches 25 percent.
And the Iraqi economist adds: “These measures contribute to employing the labor force and building Iraq, which has not missed real projects for development and construction since 2003,” explaining that the recent package of amendments would change many things in Iraq. It also points to attracting Baghdad to a number of businessmen and companies, providing them with various capabilities and facilitating investment avenues within that vision.
A number of businessmen visited Iraq recently, including Egyptian businessman Naguib Sawiris, who announced on his Twitter page about a “giant project in Baghdad”, as part of a group of projects that the government aims to attract foreign investment to.