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Encouraging foreign investment to Iraq

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Calling for foreign investment
Calling for foreign investment

It’s been a hectic couple of months in Basra (you may have noticed I’ve not posted recently). The big story has been the drawdown of the British military from the province. I’ll write about that in a future post. For this post I wanted to write about DFID’s work to encourage inward foreign investment to Basra (and Iraq more generally). This has unsurprisingly had a lower profile but has been an interesting, atypical – for DFID - but very successful part of our programme. It also hit a recent high with the Invest Iraq event DFID held on the 30th April in London.

So why have we been working to encourage companies to come to Basra. Because, as I wrote in an earlier blog, unemployment is one of, if not the, major issues facing the province.  One way of creating jobs and also of raising living standards and providing goods and services is through encouraging foreign companies to invest and set up operations in the province. It’s not the only answer – Basra’s still going to need huge amounts of government and domestic investment – but it is likely to be part of the answer.

To date our work has taken two approaches. Firstly, we’ve actively gone out to potential overseas investors to sell them the idea of investing in Basra. And I should add here that we’ve not focused on UK companies but on any companies worldwide that might potentially and credibly be prepared to invest significantly. For those that were interested we brought them in to Basra and Baghdad to see the opportunities for themselves and to meet with key people.  In just over a year we’ve brought in twenty different companies to Iraq. Often these visits have included trips into downtown Basra city or to other key sites, for example the port at Umm Qasr. And for these trips we’ve often drawn on the support of the military, for example using military helicopters to move people around or military escorts to provide security; support that’s been both invaluable and has reflected the military’s enlightened approach to supporting the development effort (and interestingly the Iraqi military here in Basra have also expressed a desire to help visiting investors coming to the province).

Secretary of State Douglas Alexander attends the launch of the Basra Investment Commission
Secretary of State Douglas Alexander attends the launch of the Basra Investment Commission with former Governor Wa'ili

Secondly we’ve been working with the provincial investment agency, the Basra Investment Commission (BIC), to develop their capacity so that they can generate inward investment without our help. The BIC’s the official legal investment promotion agency for the province. DFID’s Secretary of State Douglas Alexander attended the launch of the BIC in Basra in November last year.  Since then, and with our active support, the BIC’s come on apace and it’s now supporting visits from investors without our direct involvement.

A BIC poster in Basra
A BIC poster - click for bigger picture

As part of both strands we’ve supported investment events, held in conjunction with the BIC and the National Investment Commission (NIC) to promote Basra and Iraq to interested companies. Last year we supported events in Kuwait, London and Istanbul. This year one of the high points in Basra was a visit by Lord Mandelson along with a twenty four person delegation of high ranking British businessmen. On the 6th April we, together with the British Consulate and the BIC, hosted an event at Basra airport attended by two hundred Basrawi businessmen, politicians and local government officials.

The latest milestone was the Invest Iraq event in London on the 30th April. DFID co-hosted this along with the Iraqi NIC. This had a focus on encouraging investment to Iraq as a whole rather than just Basra. Iraqi Prime Minister Maliki led a delegation of over 100 which included just about the entire Iraqi cabinet plus government officials and Iraqi business people. From the investor side over 250 of the world’s biggest companies attended, including most of the UK’s leading firms from the oil and gas sector and financial sectors and numerous other household names.  Interest was such that we had to turn away a further 200 companies in the days before the conference. I attended on behalf of DFID Basra.  As the military would say the ‘atmospherics’ were terrific with a definite buzz to the event.

So what success have we had in getting companies setting up here in Iraq? Well it’s clear that there’s a lot of serious interest. The trick of course will be to turn this interest in to actual investment, operations and jobs on the ground. In truth for this it’s still early days – foreign companies are instinctively cautious and decisions on investment can take months if not years – so it’ll be some time before we see the full fruits of our labours. The Iraqi Government will also have to seize any opportunities that are presented.  I am however very hopeful. Recently the BIC approved its first Investment Licence for a $100m tourism project funded by a Kuwaiti firm.  There are also a number of other companies on the brink of setting up operations here in Basra.

And where do we go next with this line of work? Well we, DFID, are moving away from the direct investment promotion game and London was our last major event. Increasingly the Government of Iraq can and should do this for themselves. We will however be continuing our support to help them to do this - we’ll be continuing to work with the NIC in Baghdad and the BIC in Basra – and we’ll also be working with the Government of Iraq to make Basra an easier place for companies to do business.

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  1. Comment by Mikael Sigvardsson posted on

    When is the Iraqi Dinnar going to be wallid curentsy?
    Exangebol to other cutensys out side of Iraq?

  2. Comment by Pauline posted on

    thank you for your post.
    What are the reluctances of the private sector in investing in Iraq? Are they the same in all sectors?
    How do DFID and other actors make sure that investment will 'turn this interest in to actual investment, operations and jobs on the ground'?

  3. Comment by hassan awdi posted on

    we want to invest and do business in basra . how can you help us ?? what are the facilities ?

  4. Comment by hanaa abrahim posted on

    i have my own company in canda , how can i invest in iraq , basrah or baghdad .i need your assist how can i start to do the processing ?

  5. Comment by Mohammed posted on

    Dear Mr. Simon,

    That's a great work you are doing, as an Iraqi, I would love to see more foreign investments in my country. As you said unemployment is the cause for a lot of the troubles currently facing Iraq but so is corruption, I am really tired of hearing big numbers being spent and then nothing is seen on the ground, Iraqis lost trust in Iraqi contractors and officials so that's why I think it's better to have foreign investment.

    I heard there is a $ 500 million sports city being built in Basra, that's really good, should generate lots of jobs for Iraqis.

    Take care