Absence of stimulating laws and regulations hinders investment
Thursday 03 February 2022 77
Baghdad: Haider Falih Al-Rubaie
Specialists in economic affairs identified a number of reasons for the decline in investment activity in Iraq,
putting at the forefront of these reasons the weakness of stimulating laws and legislation, and the decline in the performance of the financial sector, especially in the field of granting credit,
as well as the political and security situation, stressing the need to provide an appropriate environment to attract companies
And work to stimulate investment in the petrochemical, agricultural and industrial fields,
pointing out at the same time the importance of these vital aspects in the advancement of the Iraqi economy and the fight against unemployment and inflation, and the diversity of sources of national income.
The economists’ calls came at the same time that the Ministry of Planning revealed its intention to establish a “developmental projects bank,” which provides an opportunity for ministries and agencies not affiliated with the ministry, and the governorates, to prioritize future investment projects.
And the economic expert, Dr. Abdul Rahim Al-Shaddoud, said during his speech to Al-Sabah that “the process of economic development in Iraq is not completed except through the advancement and investment in the non-oil sectors, and attention to the knowledge economy,” noting that
these steps “can keep oil revenues saved in a fund.” Sovereign in order to achieve the highest returns and through it we guarantee sustainable development for future generations.
The tension stresses the importance of activating the investment reality, as a result of several factors, most notably the deterioration taking place in the main economic sectors in Iraq, foremost of which is agriculture and industry, as these sectors contribute only a very small part to the country’s total product, and reliance has been on import from abroad instead of encouraging Invest in these sectors and contribute to the development process and fill the market need.
Providing an encouraging environment
The economic expert stressed the need for the government to work seriously to provide an environment conducive to investment, to provide a good political, legal and social environment, and to work within a plan based on full knowledge of the country’s conditions, needs and requirements for its implementation, and to make the priorities that society needs at the forefront of concerns in the field of investment.
Al-Shaddud believes that "the energy sector stands out among the most prominent investment priorities, as
there is a real and urgent need for serious work to increase oil production, build refineries and operate what exists among them with appropriate capacity, as well as encourage petrochemical industries, as well as gas available in large quantities in Iraq,
stressing the desire of many International companies to contribute, work and invest in these sectors, calling at the same time, to move the wheel of investment in the areas of housing, industry, agriculture and tourism.
Obstacles to companies coming
In turn, a member of the Iraqi Economists Association, researcher Miqdam Al-Shaibani, stated that Iraq is characterized by the existence of elements that support the process of attracting capital and investments, due to the availability of natural resources such as oil and gas, human resources, land and geographical location,
but the obstacles to investment are numerous, due to a number of reasons, including what was mentioned in the exercise report Business activities issued by the World Bank Group that relate to the cost, time, and procedures for starting a business, obtaining building permits, obtaining electricity, registering property, obtaining credit, protecting investors, and trading across borders.
Al-Shaibani explained that the political and security instability is a major obstacle to the arrival of investments, as
stability is one of the main determinants in making the investment decision that searches for a stable environment, as well as the weakness of the private sector caused by the state’s role in economic life in Iraq, as well as the low efficiency Infrastructure, as the Iraqi economy suffers from a clear backwardness in infrastructure.
Weak laws and regulations
Al-Shaibani also explained that the weakness of laws and legislation that stimulate investment, also contributed to the reluctance of international companies and their failure to enter the Iraqi market,
indicating that Investment Law No. (13) represents an important step in the field of attracting investments, with its guarantees of privileges and exemptions,
but the laws, regulations and special instructions The sectoral authorities concerned with granting approval for investment projects include some weaknesses, which formed an obstacle to local and foreign investment as a result of the introduction of these instructions that are not commensurate with the intellectual and technological developments in the world.
The researcher Al-Shaibani pointed out that the weakness of the financial sector in Iraq contributed to the delay in the investment aspect, as this sector is still below the required level, and lacks the necessary competence that would enable it to play an active role in the Iraqi economy, in terms of its effects in providing the necessary credit and liquidity. For the domestic and foreign private sector.
Development Projects Bank
In a related context, the Minister of Planning, Dr. Khaled Batal Al-Najm, confirmed that the ministry is making exceptional efforts to facilitate procedures to ensure the implementation of ongoing investment projects, according to their timelines and financial allocations, indicating that
there are a number of suspended projects for various reasons, which requires finding solutions and treatments to ensure Resuming work on these projects, after determining the percentages of completion in each project.