COUNTRY FOCUS – IRAQ ARAB NATIONS Australian ties help Iraqi revival


New economic policies and the nation’s willingness to foster stronger ties with Australia are creating new opportunities for Australian companies in Iraq.


D


Reconstruction of the oil industry Iraq’s economy has fluctuated greatly in the past few years. This is primarily due to the economy’s dependence in the oil sector, as oil accounts for some 90 per cent of government revenue, nearly all its export revenue and two- thirds of GDP. As a result, Iraq’s real GDP grew by 9.5 per cent in 2008 due to record oil prices following a 65 per cent increase in crude oil receipts. This all came undone in 2009, when the price of oil dropped and growth slowed to four per cent. Iraq has since


Rebuilding Kirkuk’s infrastructure.


to 6 million bpd by 2017. In 2009, Iraq secured US$2.05 billion from the US Government to put towards the modernisation of its oil infrastructure in order to increase oil production. There are also plans to build five new oil refineries and expand two existing refineries. The IMF predicts that these measures, combined with a predicted increase in oil prices, will help Iraq’s GDP growth increase to eight per cent.


Central Haifa, as seen from the Medical City Hospital across the Tigres River.


introduced new reforms and changes to ensure economic growth. In March 2010 it secured a US$3.6 billion loan from the IMF in order to implement a two-year economic plan which will help improve financial management and budget management, as well as pay for imports. Iraq also hopes to greatly increase its oil exports, as the majority of its oil reserves, proven and unknown, are yet to be exploited. Currently Iraq produces around 2.42million barrels per day (bpd), with a 10-year plan set in 2008 to increase that production


Australian ties to Iraq’s development Diplomatic relations were affected by the occupation of Iraq, but relations fully resumed when both the Australian embassy in Baghdad and the Iraqi Embassy in Canberra reopened in 2004. In 2009, Iraq’s Prime Minister Nouri al-Maliki became the first Iraqi Prime Minister to visit Australia. In talks with former Prime Minister Kevin Rudd, six memorandums of understanding were established in the areas of agriculture, resources and energy, trade cooperation, education training and research, public health and security, and border control. A$17m was directly committed to


espite the recent turmoil, Iraq has established its potential for economic development and growth.


agricultural initiatives in Iraq, while the Australian Government also continues to be a significant contributor to both the UN and World Bank’s Iraq Developments funds. There are also 120 agricultural experts being trained in Australian Institutes, which is higher than ex-Prime Minister Rudd’s target of 100. Australia’s primary export to Iraq is


wheat. The Australian Wheat Board had a 67-year monopoly over wheat exports to Iraq, but business was suspended 2006 over the food-for-oil kickbacks scandal. However, in 2009 the Iraqi Government agreed to resume buying


Tankers at the Iraqi Al Basra oil terminal in the Northern Arabian Gulf.


Fruit and vegetable merchant in a souk in Kirkuk.


Australian wheat. In 2008, Australian oil companies BHP Billiton and Woodside Petroleum were among 35 international companies “pre-qualified” to bid for contracts. Both are yet to secure any winning bids, however in February 2010 the Australian Industrial Chamber of Commerce expressed an interest to invest in an oilfield in Wassit. Since 2005 Australian contracts in Iraq have totalled over A$3 billion and cover a varying number of areas. For example, in 2007, the Brisbane-based Morris Corporation secured a A$65m contract to cater for prisoners and staff in one of Iraq’s high security prisons. In January 2010, ACA Alliance secured the contracts for the construction of three hospitals. Furthermore, the Australian Government has appointed a Senior Trade Commissioner to promote stronger commercial links. p


AUSTRALIA AND THE ARAB COUNTRIES | 2010 131


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