INTRODUCTION
SPECIAL REPORT - IRAQ
firm to take care of them and they would probably stay in the international zone. Areas such as Basra are clearly not as safe as Kurdistan. The western region – cities such as Fallujah and Rumaythah – is still an area where there are a lot of tensions. This part of the country is still more conservative, in the sense that they are much less familiar with non-Iraqi people.
The Iraqi market Iraq is a country that has suffered through many years of sanctions and about 35 years of insulation from the outside world. Much of its infrastructure has been destroyed over the course of three wars. They need everything – a large proportion of the population doesn’t have access to running water or proper education. With the exception of Basra Children’s Hospital, which my project helped to build, there have been no new hospitals built in Iraq since 1983. Agriculture was really damaged during the course of last war. Farmers couldn’t water their crops and they couldn’t get fuel to transport their goods, so they stopped producing. In the north, you can see more foreign activity. There
are medical centres and other healthcare services setting up in Kurdistan, all run by international health providers, and Mercedes Benz-Daimler recently established a site for the assembly of their trucks in Erbil.
Reform for investment and business You can now have 100 per cent-owned investments in Iraq – unlike some other markets in the region, you are not required to have a local partner. I believe this has occurred because the advice the Iraqi authorities received from their American, British and European advisors as they reformed their commercial and investment laws was: “You are in a tough situation. You have a lot of other attractive markets around you. What can you offer to make your market more attractive to new business?”
Iraq has set goals to rebuild or upgrade several oil refineries. There are still some difficulties around the issue of land
ownership (no absolute freehold over land), but Iraq has a lot of tax-free thresholds for people setting up businesses – you can get 10–15 years of tax-free status. On the whole, [income and corporate] tax rates are not particularly high and there are no huge import taxes. Overall, Iraq has done everything it can to make the nation attractive as a business destination.
Doing business in Iraq If you are serious about doing business in Iraq you will have to visit the country for yourself, otherwise you will never truly understand the environment there. In Iraq, as in the rest of he Middle East, you really need to build relationships because business works via personal trust. You also need to get reliable local advisers who can help you set up your business. They can help answer questions such as: What kind of visa do you need? What requirements are there about registering a local presence in Iraq? For many issues there may be totally different sets of rules in Erbil compared to Bagdad, for instance. Things could change very quickly, but the concern is more
that there are steps in the bureaucratic process that you’re not aware of, and these might vary from region to region. It’s not a transparent process. It’s also worthwhile getting in touch with the National Investment Commission in Bagdad if you want to do an investment and not just trade. You should also probably read Iraq’s new investment laws, which came out last year and have already been amended once. When dealing with Iraqis, you might find that they are
A public parks reconstruction project in the Jamiat district of Basra. Photo by: Tim Ortez
18 AUSTRALIA AND THE ARAB COUNTRIES | 2010
sometimes a bit ‘1980s’ in their approach. In their minds, 1983 was when everything was awesome and they want to go back to that, so sometimes there’s reluctance to accept the way people do things in 2010. Of course, this is often a generational thing – people under the age of 45 will be much more open-minded and entrepreneurial. There are also some very well-educated, savvy Iraqis who have lived or studied in other parts of the world, so it really does depend who you’re dealing with. p
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