Erbil, Kurdistan-Iraq, June
30, -- Iraq is struggling to rebuild after years of economic
sanctions and conflict. But the lack of security in much of the
country has scared away potential investors and slowed
reconstruction. But in the relatively quiet Kurdistan region of
northern Iraq, stability is paving the way for prosperity as the
region works to attract foreign investment.
Security fears in central and southern Iraq have made it impossible
for many foreign companies to do business in those areas. But with
the ability to offer security in the north, the Kurdish government
has declared itself open for business.
Many foreign companies have already started coming to the Kurdistan
region.
Hersh al-Tayyar, the chairman of the Iraqi Businessmen's Union based
in the northern city of Erbil, says recently Lebanese companies have
been exploring the area's potential, but the bulk of the foreign
businesses now in northern Iraq are from Turkey. One such company is
the Turkish firm 77, which has invested a lot of money in cement
batching plants. |
Hersh Tayyar
Photo: VOA |
Many of the companies here right now are seeking projects funded by
the Kurdish regional government, rather than putting up the capital.
But others, such as the Lebanese Bank Audi, have entered northern
Iraq with an eye to the long-term, and are investing money and
hiring and training local employees.
"It is a bet coming here to Kurdistan," said Charbel Moubarak, Bank
Audi's regional manager. "We believe that this is the departure
point, because our main target is Baghdad. While the security is
prevailing here in Kurdistan, we can stay here, we can start from
here and then move to other parts of Kurdistan, waiting for other
cities, whenever the security prevails we will go there."
Tayyar of the Businessmen's Union says this is what many companies
are doing. He says Kurdistan is uniquely positioned to be a gateway
to the rest of Iraq.
The Kurdish regional government also shares this view, and has been
working to revise its foreign investment law to attract
international investors to the north.
Douglas Layton, the director of the Kurdistan Development
Corporation, a joint public-private company, says the new investment
law will have many incentives for foreigners.
"For example, foreigners will be able to own 100 percent of a local
company, whereas in the past it was 49 percent, and it had to be
majority controlled by Iraqis," he said.
Foreign investors will also be able to own property; they will
receive an automatic five-year tax holiday that can be extended to
10 years, and they will be exempt during that time from import
duties, income taxes and taxes on repatriated profits.
But the money is not rolling in just yet, as some issues remain to
be addressed. For example, the bureaucracy is cumbersome and moves
slowly. The Kurdish parliament was expected to pass the foreign
investment law last week, but legislators abandoned their task when
the assembly's airconditioning broke down on a typically hot day.
The education system has also decayed during years of sanctions and
neglect, and university students are graduating unprepared to enter
the business world.
Northern Iraq also lacks a proper infrastructure to support
large-scale foreign investment. Douglas Layton, however, sees that
not as an obstacle to investment, but as an opportunity.
"From an investment point of view, this is a tremendous
opportunity," he said. "We are going to have to build everything
from A to Z. So whatever sector a company is involved in, there is
opportunity here in Kurdistan to see a significant return on
investments that they make."
Layton says smart investors realize that now is the time to be
entering northern Iraq as the region is beginning to take off.
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