Foreign investment in Iraq .. What we accept and what we do not accept

[yota691]

Foreign investment in Iraq .. What we accept and what we do not accept

03/3/2018 12:00 am  Ali Shara  Iraqis are looking to build the economy after an investment environment, which may be more encouraging than before, to attract foreign investments. The level of security risk, which is one of the obstacles preventing investors from coming to Iraq , And the government has the responsibility to ensure the removal of the rest of the obstacles, foremost of which is administrative corruption  .  First, we would like to clarify that investments in the extractive sector are outside the framework of the present article discussion, since the conditions for acceptance or non-acceptance of foreign investments do not fully apply to them.  And the conditions that separate the investments accepted and unacceptable, in fact many, but there are important conditions should be paid to them for acceptance and rejection, especially those core which have been neglected and passed these investments will cause serious damage to the Iraqi economy may appear on it immediately. The foreign investments are acceptable and  clear without the inference and detail that the foreign investments acceptable and preferred are those investments that achieve at least four conditions; the first to employ a larger number of Iraqi labor, and the second to exploit the local physical inputs, and that the size of local inputs greater than those imported, And the third requirement to re-invest the largest proportion of its profits in the national economy, and the fourth to contribute to bring foreign currency to the Iraqi market as in   tourism projects. Unacceptable foreign investments In terms of unwanted foreign investments, there is a fundamental condition that must be observed even if it fails to meet the other conditions (of course not environmental or social damage ...  etc.).  This essential condition is that these investments are not dependent upon the importation of most or all of their operational inputs with the availability of local inputs, and then transfer their profits abroad through the demand of the dollar in the local market for foreign currencies. The exchange rate of the   dollar. This is usually the case if those investments are directed to the service sector. As an example of the violation of this essential condition is whether foreign investments are directed to the establishment of malls, for example, from which there is limited interest at first in the construction of an Iraqi labor, but then no locally produced goods contribute to the growth of the national economy. Which are imported, sold to the local consumer, and then turned the profits earned abroad by buying the dollar from the parallel market, causing pressure that could lead to a rise in the dollar exchange rate in the domestic market if the demand is large on the dollar by pumped investors Their money is in such a kind only Investments, usually a few pros and large damaging. But if the government pledged to meet the needs of this kind of investment from the dollar at the official exchange rate, it would not be harmed by the situation of buying the dollar from the market, as this would drain Iraq's foreign currency assets.  The reason is that investment in some types of services does not increase the contribution of material output to the GDP, which thus creates useful future connections and background to the economy and to the individual, and that all its connections and benefits are in and out. * Professor of Economics

[climber7]

Thanks Yota

 

Sounds interesting--layman terms please anyone? 

[10 YEARS LATER]

Foreign Investments in Iraq - " What we accept and what we do not accept "  This statement is pretty amusing considering the current state of affairs. It's definitely worth a scathing and lengthy essay.

 

Over the last several years alone I think we've ALL taken our shots at these fools and ripped 'em a NEW ONE, huh !   

[Officiallytook]

I see this as educate and a push for the True or "official exchange rate."

 

 

 

[Carrello]

Thank you, Yota. This is a very good article.

 

This article states the four criteria for acceptance for investment, all which are basic in any country, and require using Iraqi resources. They don't want cheap, foreign labor brought in leaving the Iraqi unemployment rate high, projects that are a get-rich scheme which do not lead to long term prosperity, and projects paid for with dollars that will continue to drain the foreign reserves. New investment projects need to  drive to long term prosperity: building Iraqi business,  local Iraqi employment, development of natural resources. If Iraq's model applies, for every dollar earned and spent locally, it roll downhill six times. Every one with a new job will get new clothes, new cars, new houses, new schools, new hospitals, new hospital gowns, etc. You get the picture. This is what the article is saying, although translations always give us a funny message and yo need to read between the economic and financial lines to understand why this is important and why it is important to us as IQD investors. 

 

The foreign investments are acceptable and  clear without the inference and detail that the foreign investments acceptable and preferred are those investments that achieve at least four conditions;   the first to employ a larger number of Iraqi labor,   and the second to exploit the local physical inputs, and that the size of local inputs greater than those imported,   And the third requirement to re-invest the largest proportion of its profits in the national economy,   and the fourth to contribute to bring foreign currency to the Iraqi market as in   tourism projects. Unacceptable foreign investments In terms of unwanted foreign investments, there is a fundamental condition that must be observed even if it fails to meet the other conditions (of course not environmental or social damage ...  etc.).  This essential condition is that these investments are not dependent upon the importation of most or all of their operational inputs with the availability of local inputs, and then transfer their profits abroad through the demand of the dollar in the local market for foreign currencies. The exchange rate of the   dollar. This is usually the case if those investments are directed to the service sector. As an example of the violation of this essential condition is whether foreign investments are directed to the establishment of malls, for example, from which there is limited interest at first in the construction of an Iraqi labor, but then no locally produced goods contribute to the growth of the national economy. Which are imported, sold to the local consumer, and then turned the profits earned abroad by buying the dollar from the parallel market, causing pressure that could lead to a rise in the dollar exchange rate in the domestic market if the demand is large on the dollar by pumped investors Their money is in such a kind only Investments, usually a few pros and large damaging. But if the government pledged to meet the needs of this kind of investment from the dollar at the official exchange rate, it would not be harmed by the situation of buying the dollar from the market, as this would drain Iraq's foreign currency assets.  The reason is that investment in some types of services does not increase the contribution of material output to the GDP, which thus creates useful future connections and background to the economy and to the individual, and that all its connections and benefits are in and out. * Professor of Economics

•