Monday, 28 March 2011
Iraq: Investment environment still poor
Iraq is only able to supply around half of its grain needs, which total some 9 million tonnes. In a bid to boost the sector, agriculture minister Ezzeddine Al-Dawla announced in March that the government intended to offer incentives for farmers, such as providing loans for projects. The minister also announced that he would welcome foreign investors into the sector. Despite the high hopes of many Iraqis, including those in the investment committee that foreign investment would be streaming in to the country by now, the investment climate is generally still poor. This lack of interest among foreign investors has prompted huge disappointment in the country as Iraq is as desperate as ever for housing and basic services.
One of the main hurdles to attracting foreign investment continues to be the investment law and in particular the ruling within it that foreign companies cannot buy land in Iraq, only rent it. According to the Investment Committee this is putting many foreign firms off. This is only one issue that makes Iraq an unappealing prospect for many potential investors. Bureaucracy, corruption, inefficiency, not to mention the security situation, all mean that Iraq has a long way to go to convince foreign firms to invest outside the energy sector.
To make matters worse, many foreigners are struggling to get visas. It is rumoured that this is because of a recent decision by the Prime Minister's Office to take control of the matter itself. This move was supposedly a means to prevent corruption. Some sources, however, claim that bringing visa issue into the Prime Minister's Office will have the opposite effect. Iraq still has an uphill struggle to turn itself into the foreign investment hub it dreams of.
For more news and expert analysis about Iraq, please see Iraq Focus.
© 2011 Menas Associates