Time to invest in Iraq's future

[SocalDinar]

Time to invest in Iraq's future

FAHRETTIN SÜMER

Published09.04.201900:03

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• Recently, world media was occupied with the horrendous terrorist act against Muslims praying in two mosques in Christchurch, New Zealand. This event showed that a      terrorist could come from any ethnic, national or religious background; therefore, terrorism should not be labeled with the terrorist's religious and/or ethnic identity, but the world's nations should stand against such acts on a united front regardless of the backgrounds of the terrorists.

 

One of the countries that has suffered the most from several wars and then from extreme terrorism is Iraq. During the past decade, many Iraqis were killed by al-Qaida terrorist attacks and many more Iraqis suffered from the rise of Daesh in 2014. The terrorist organization brought many deaths in Syria and Iraq and caused many more to be displaced from their homes. Now, Daesh is defeated and Iraq's violent past seems to be withering away. Many internally displaced persons (IDPs) returned to their homes and more will do so, if the security and economic situations improve in their hometowns. However, such a violent past took a toll on the infrastructure of the country.

Post-terror restoration

War and terror destroyed cities, e.g. Mosul, ruined roads, buildings, damaged electricity production capacity and distribution networks and much more. Iraqi infrastructure has also been deteriorating due to insufficient investments and maintenance. Some visible outcomes of this situation have been electricity shortages all over Iraq and unclean water in some cities, like Basra. Dealing with accumulated infrastructure-related problems takes time and requires huge financial resources. Even though Iraq is an oil-rich country, its own current financial resources are not sufficient to undo such large devastation in a short time, partly due to the fall of oil prices.

Now it is time to rebuild the country in order to prevent any future chaos and to increase the welfare of society. Iraqi governments have not been sufficiently able to provide the much needed public services that their citizens expect. The gap between what has been expected from the governments and what they were able to provide has created public mistrust in political processes and politicians. Many Iraqis perceive them as corrupt. This government has a lot to do to rebuild the country and to earn the public's trust again.

Following last year's national elections, a democratically elected new government is in power. It has the will to take the challenge; however, the rebuilding the country requires much higher financial resources than the government currently has. The previous Iraqi government sought external financing for rebuilding. For this purpose, the Kuwait International Conference for Reconstruction of Iraq was held in February 2018. However, in that conference the financial pledges of the gulf countries were much smaller, in comparison to that of Turkey's $5 billion in credit lines. And the U.S. extended $3 billion in credit lines. The goal of the conference was to raise $88 billion, but only a total of $30 billion was pledged. The previous Iraqi government has also borrowed from the International Monetary Fund (IMF) after the 2014 decline of oil prices to meet its budget obligations. The World Bank also contributes to Iraqi reconstruction and recovery, but Iraq needs higher levels of contributions. Iraq's oil-rich neighboring countries can play a bigger role in this regard by providing funds for rebuilding. In the meantime, the government must ensure that it will carry on with reforms to ensure that international financing and government revenues in general are used for the intended purposes and efficiently.

The reconstruction efforts should be accompanied by better security environment and continuous economic growth. The Iraqi security apparatus still needs to be strengthened. The Iraqi economy recorded multiple high positive economic growth rates since 2004. Even though the rise of Daesh and fall of oil prices in 2014 slowed down the economy, its economy continued to record positive growth rates until 2017's negative growth. Iraq's economy needs to have high growth rates in order to create jobs for millions of unemployed citizens. Without a growing economy, a good security environment and public trust in the democratic political process, Iraq's stability will be endangered. Higher unemployment, poverty and a weak security apparatus create suitable grounds for sectarian conflicts and for the growth of radical forces, including terrorist organizations. An unstable Iraq will not only negatively affect its neighbors but the return of terrorist organizations in Iraq will have global repercussions, with their links across multiple countries. Hence, helping Iraq overcome its problems is in the interest of many countries.

Iraq, by defeating Daesh, indirectly protected its neighbors from the emergence of a troubled region. It is an ethical duty to help a neighbor that went through decades of hardships. Iraq's oil-rich wealthy neighbors should play a bigger role in helping Iraq in the process of reconstruction by providing funds for it. A healthy economy needs good infrastructure and energy. In the short run, neighboring countries can help Iraq overcome its electricity shortages through extending their electricity grids to nearby Iraqi cities. In the long run, Iraq needs to increase its electricity production capacity.

Attempts to boost trade

The current Iraqi government is interested in increasing its electricity as well as its oil and gas production capacity, which will help the country generate more oil and gas revenues in the future. These are multibillion-dollar projects and Iraq is open to receiving more foreign direct investment (FDI) in these sectors. Iraq also aims to increase its trade relations with its neighbors, in particular Turkey, Iran and Jordan. Iraqi President Barham Salih visited Iran and Turkey a couple of months ago for developing bilateral relations and increasing trade. The Iraqi government is open to mutually beneficial trade agreements and long term water and energy related projects that are mutually beneficial. There are great potentials for mutually beneficial trade and investment relations between Iraq and its neighbors.

Iraq also wants to diversify its economy through encouraging private entrepreneurship and attracting FDI in different sectors along with the oil and gas sectors. So far American and Western companies have avoided Iraq, even though the country's security has improved. The Iraqi government should create a more favorable institutional framework for entrepreneurship and business development and create better investment laws to attract foreign direct businesses. It also needs to create a sound financial system and strengthen its banking system, so that businesses can raise financial capital when they need to.

It is time to believe in Iraq's future and invest. It has a working democratic system, despite some weaknesses. It has young and vibrant human resources and plenty of natural resources. The country also has great tourism potential as it was the home for multiple ancient and Islamic civilizations. Iraq could offer great business opportunities as a developing country transitioning from a violent past to a peaceful and prosperous future. As its security improves and economy grows, Iraq could become a good location for many global businesses that operate in the Middle East.

 

https://www.dailysabah.com/op-ed/2019/04/09/time-to-invest-in-iraqs-future

[KDuesing]

I wouldn't loan them 2 cents. Not while Iran is in control of half of parliament. Didn't we already try loaning them tons of money to rebuild, ans it was just stolen by Maliki and iran?

[GreedyDinar07]

Exactly!!!

[Pitcher]

I think the USA has already invested in Iraq to the tune of about 3-5 trillion and thousands of soldiers wounded or killed. 

 

I would be be more impressed with an article about owing the USA some respect, gratitude for our soldiers, and of course compensation for our investments. 

 

Agree 100% KDuesing

[GreedyDinar07]

Picture that is not going to happen it would be the logical thing to do but these criminals only care about themselves I just read an article that they are going to nominate Fyaad as the interior Minister when you look at Majdi /Maliki they are one in the same that is why I am trying to figure out why are they asking anyone to invest with this criminal Enterprise and I don't see Iraq going anywhere anytime soon unless the International Community force thrm to use their own currency other than that I say we get out while we can and to hell with them... I have to hand it to them Iran is winning and people do not want to realize that they are controlling the government of Iraq unless there is a plan behind the scene I don't know what is going to happen I really don't care about Iraq and Iran doing business together just revalue your damn money and stop using ours....other than that....we got played...