Iraq is working on a programme to attract foreign investment across a wide range of sectors. It is intended to bring in capital to revive the flailing economy and help rebuild areas that have been destroyed in the fighting with Islamic State (IS).

According to the plan, being drawn up by Baghdad with the help of the US, the government intends to offer around 5,000 investment opportunities, many including incentives to attract foreign companies. These incentives will include extending investment contracts from their current 25 years to 50 years, exempting investors from taxes and customs tariffs, and reducing the number of Iraqi staff required to be employed on projects.

The programme also includes plans for large-scale privatisations across a number of sectors including: electricity, communications, tourism, health, education and factories.

According to Ahmed al-Kanani, head of the economy and investment committee in the Iraqi parliament, the programme will be launched ‘when the last towns of Iraq have been liberated’ from Islamic State (IS). As things stand, the government is predicting that this will be by the end of 2017. Meanwhile, it is preparing to hold conferences and promotion campaigns in a number of Western and Arab countries.

However, a draft law to develop and improve Iraq’s investment environment will need to be put to, and passed by, parliament. This could prove challenging. There is a strong realisation of the need to improve the country’s economic situation, but any privatisation and sale of national assets to foreign companies is going to be very sensitive. An investment law is likely to be passed, given the dire state of the country’s finances, but there could be strong objections to some of the plans being drawn up by the government.

This is an excerpt from an article in our monthly Iraq & Kurdistan Focus publication.