Iraq’s window of opportunity

On April 28, CIPE hosted Chairman Abdel Razzak Al-Saadi of the Iraqi Securities Commission (ISC), at its headquarters in Washington, DC. Although Iraq is still emerging from conflict and facing sizeable security threats, Chairman Al-Saadi is optimistic and reiterated that Iraq is open for business. Since its inception in 2004,the ISC has listed over 90 companies to the Iraqi Stock Exchange. With new investment and entrepreneurship blooming in Iraq, the country has a window of opportunity to rebuild much of what the conflict has damaged or destroyed.

Mr. Al-Saadi stressed that unemployment remains a significant problem in the region, as it frequently leaves a void filled by poverty and extremism. Iraq is unfortunately no different, with an unemployment rate of 19 percent, not taking into account hidden unemployment through bloated state payrolls. With Iraqi youth not always able to find positions in the public sector, the need for the private sector and entrepreneurship to create jobs is more crucial.

The UAE, Turkey and other regional investors are beginning to see the prospects in Iraq. In 2009, 24 percent of investment in Iraq was by the UAE alone. With conditions in the country improving more countries, more companies, and more jobs will soon follow.

Guest Mr. Naufel Al-Hassan, the Commercial Counselor of the Embassy of Iraq’s Commercial Office, supplemented Chairman Al-Saadi’s presentation of the situation in Iraq by discussing the investment environment in Iraq. According to Mr. Al-Hassan, over 2 million housing units are currently needed in Iraq and this number will grow as Iraq becomes safer and refugees return to their country.

Electricity remains a significant problem although improvements have been made. According to Associated Press, all of Iraq now gets about 18 hours a day, a huge increase for the provinces in comparison to before the war. Nonetheless, these statistics don’t always reflect on the ground realities. Many still barely get a handful of hours a day, let alone continuously, and generators are common.

Mr. Al-Hassan and Chairman Al-Saadi mutually articulated the value foreign companies contribute in creating more jobs for Iraqi youth while simultaneously improving the electricity capacity, delivering needed housing, and supplying consumers with product variety in the market.

One of the most positive developments within Iraq is the increased role lawmakers are taking to encourage a climate to make these development in these areas possible. The introduction of the Securities Law to Parliament is evidence that national policymakers are recognizing recommendations from the Iraqi business community. Mr. Al-Saadi expects that the ‘a-political’ law will pass soon after Parliament is seated. The Iraqi Stock Exchange predicts the law, based on international best practices, will clarify regulations and attract investors, ultimately boosting business volume by up to 50 percent.

At the provincial level, members of the Provincial Investment Commissions are now equipped to market their province to investors and communicate with local policymakers on obstructions to economic growth. This is partly due to the Provincial Investment Commission capacity building training series that CIPE provided in 2008-2009.

While progress is slow-moving and intermittently obscured by violence, Iraq has a growing window through which opportunity and growth can flow in, and extremism and poverty can flow out.