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13 April 2011 Volume 34 Issue 7
iraq newsletter Iraq speeding up investment
“Iraq has maintained macroeconomic stability under difficult external and internal circumstances, while making efforts to rebuild key economic institutions,” Naoyuki Shinohara, Deputy Managing Director and Acting Chair, following IMF Executive Board discussions on Iraq. Inflation has remained subdued, and the exchange rate has remained stable. The 2011 budget aims to accelerate investment in public services and infrastructure, and accommodates higher social safety net provisions to support those in need. Iraq’s rehabilitation needs remain large and the higher investment spending is essential to help create a vibrant private sector that provides employment opportunities for Iraq’s large labour
force, thus helping to reduce poverty. At the same time, a strong emphasis on ensuring the quality of public spending will be important. Decisive efforts to rebuild key economic institutions and improve governance will be critical for private sector development. The formation of the new government and the expected increase in oil production in the coming years offer an opportunity to do so while maintaining macroeconomic stability. Further, strengthening public financial management encompasses the introduction of an automated financial management and information system and improvements in cash management which would eventually culminate in the establishment of a single treasury
Turkey steps up trade with Iraq
Turkey’s trade losses with Arab countries shaken by opposition protests could be compensated for mainly by increased trade with its neighbour, Iraq, Mehmet Büyükeki, president of the Turkish Exporters Assembly (TM), told Zaman. In the first two months of 2011, exports to Iraq were around $1.1 billion. This represents a 40 percent increase in exports to Iraq over the same period last year. Investment opportunities for Turkish firms in Iraq are promising. “During our visit, the president of the National Investment Commission of Iraq informed us that the country will undertake unprecedented investment projects in the near future” he said.
“In Baghdad alone, these investments will top $30 billion. The Iraq national investment plan will include the construction of 1,000 hospitals and medical clinics, another 1,000 schools and universities, and around 3 million houses. “On top of such construction, Iraq will also invest in five other major sectors. It aims to pour money into the tourism sector and plans to attract 15 million tourists over the next 15 years. “This will require constructing airports, roads, railways and such on top of outfitting existing ones. All this offers Turkish investors and businessmen a great opportunity,” Büyükeki says.
Zaman, 03/04/2011
Abu Dhabi firm looks at Iraqi telecoms
Invest AD, the investment company backed by the Abu Dhabi Government, says Iraq's telecommunications sector is now ripe for investment. "As investors we're very interested in the telecoms space," said David Sanders, the company's chief investment officer. "By population, Iraq is among the most populous countries in the region." Invest AD's $8 million Iraq Opportunities Fund, launched nearly six months ago, has already made a 22.5 per cent return by investing in banks, materials and property. The minimum subscription is $500,000, while management fees are 0.8 per cent and
performance fees are 20 per cent of net positive annual return. There are three mobile operators in Iraq: AsiaCell, in which Qatar Telecommunications has a 30 per cent stake; Korek, in which France Telecom and the Kuwaiti logistics group Agility are looking to buy a 44 per cent stake; and Zain, the Kuwaiti telecoms group. Mobile operators in the country have been under pressure to list their shares under the terms of the licence bought in 2007. These listings, which are due towards the end of the year, would boost liquidity and attract international investors. The National, 02/04/2011
account. Establishing a framework for oil revenues to succeed the Development Fund for Iraq should help ensure continued accountability and transparency. In the financial sector, moving ahead with the financial and operational restructuring of the two largest state-owned banks and enhancing the central bank’s supervision capacity will contribute to creating a financial sector that can provide essential services to the private sector. Iraq continues to make progress to conclude debt agreements and resolve outstanding claims under terms comparable to the 2004 Paris Club Agreement. IMF, 18/03/2011
‘Central bank will remain independent’
Iraq has told the International Monetary Fund that its central bank would remain independent, following a court ruling that the bank operated under the prime minister’s authority. Maliki won a court battle against the parliament earlier this year over who has ultimate control over the central bank, attracting criticism from lawmakers that the bank might lose its independence. The government, the bank and the court itself have since insisted that the ruling would not compromise the bank’s independence. “The Central Bank of Iraq (CBI) will continue to be independent in the pursuit of its policy objectives,” said the March 3 memorandum, signed by Iraq’s central bank governor and finance minister and published by the IMF. IMF, 31/03/2011
Iraq e-government project on the way
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Iraq Ministry of Science and Technology said that it has set up a committee entrusted to put in place a strategy for a national Iraq e- Government. The ministry stressed that the project will be finished in 6 to 7 months and added that it would help people and public institutions as it will create direct contact between citizens and directorates. Al Sumaria, 28/03/2011
www.abcc.org.uk
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