Posted 19/04/2012 05:24 PM
Babinaoz (Reuters) - when the company decided to Range Hospitality and Dubai-based construction of a hotel and residential complex at a cost of $ 175 million in the city of Karbala in Iraq and faced a common problem for investors in this country, getting the funding.
The company says it has overcome the problem by selling some of the rooms in advance system time-sharing of the Shiite visitors to the city and tourism companies and other investors. The construction work now under way and scheduled for completion by the end of the complex in 2013.
said Munaf Ali, CEO of Range Hospitality "Because we are in Iraq since 2009 have seen the scene changed dramatically." He added that the political horizon became more stable and can be seen improvement in the security and infrastructure from day to day.
After nine years of the U.S. invasion of Iraq to overthrow Saddam Hussein, there have been signs that foreign investment in the country is finally gaining momentum.
There are still considerable obstacles. Despite the decline in violence after hitting sectarian violence peaked in 2006 and 2007, the country is still experiencing almost daily bombings and shootings carried out many of them al Qaeda wing in Iraq and Sunni groups of armed men.
and because of concern the government of Prime Minister Nuri al-Maliki's internal conflicts complain about the business of that Government failed to frequently on the adoption of legal reforms that would clarify property rights and support the implementation of contracts.
locked in the central government conflict with the Kurdistan region of semi-independent over oil, land and power.
But projects such as hotels, Karbala, indicate that Iraq is on the threshold of an important stage where investors feel that economic growth Accelerated and potential in this country outweigh the risks, in the various economic sectors and not in the oil sector only.
said Farouk Sousse, chief economist specialized in the Middle East at Citi U.S. "There are severe disruptions between the wealth of Iraq's potential and its current status in terms of consumer goods and infrastructure. "When mutation occurs would be enormous. And many people are preparing for that. "
and the meaning of the existence of the oil wealth of potential in Iraq, some investors are willing to take the risk is much greater than endure it in the country's less fortunate.
Iraq said last month that oil production exceeded three million barrels per day for the first time in more than three decades. and Iraq is looking to double its production to lesbian over the next three years and aims in the long run to reach 12 million barrels per day, which may be a target too optimistic, but nevertheless it is expected that Iraq will be the largest exporter in the world for the supply of new oil in the next few years.
It is expected to pay the rates of economic growth during the remaining years of this decade to levels not dreamed of by most states even if Iraq had not addressing the problems of political and legal.
The average GDP growth of 3.6 percent over six years until 2010. believe the International Monetary Fund growth of 9.6 percent in the last year and is expected to exceed the average growth ten percent in five years until 2016.
is expected to enhance the financial situation of Iraq dramatically than would be allowed to put larger contracts for reconstruction on the local and foreign investors. and International Monetary Fund expects doubled the value of oil exports annually to the almost doubled to become a 139 billion by 2016, which would turn the budget deficit estimate of 8.7 percent last year to a surplus by 18 percent after four years from now.
said City in a report to the Chinese investors potential in the region, "Iraq has become owners of the largest sovereign wealth in the world. "
and expected increase in net assets of the government, which currently stands at negative $ 50 billion to become a center positive value of 100 billion dollars by 2020.
and stop these forecasts on political stability in Iraq., says Sherif Salem, portfolio manager at Abu Dhabi Investment Company, which manages a fund foreign equity of the few Iraqi Stock Exchange that it looks at what is far from "political volatility of short-term" in the time range between four and six years from now.
reflects the performance of the Fund since its launch in October 2010 vagaries of the political situation in Iraq. In July last July amounted to gains of the fund 26 percent since its launch during a rally witnessed stock market after the success of al-Maliki to form a coalition government.
But the fund ended last year Bmaxb of only 15 percent as increased security concerns with the withdrawal of U.S. forces. and now reduced the gains from the time at all to about six percent with the pursuit of the Iraqi authorities for the arrest of Tariq al-Hashimi, Vice President and a Sunni politician, the great Shi'ite-led government because of accusations that he managed teams of assassinations.
fueled the arrest warrant Hashemi political tensions could jeopardize a fragile sectarian balance in Iraq.
Salim said, speaking of the process of collecting money to fund the total capital $ 20 million, "There is great interest .. Until we meet investors find them very enthusiastic about the opportunities.
"But the last step is to pump money may take a while because they want to feel entirely comfortable with the idea of investing in Iraq."
However, the increase of foreign investment in sectors of the economy in general. According to the estimate the company minimum Consulting with Mokrane, one in Dubai and the other in Washington, which specializes in Iraq amounted to a business foreign which includes announcements of new investments and service contracts and other deals with the exception of trade 55.7 billion dollars last year, the contribution of 276 companies from 45 countries.
Over the past five followed the U.S. invasion value fluctuated below the level of seven billion dollars a year and then began to rise in 2008 with the decline of violence. Expects the minimum further growth this year between 30 and 40 percent believe it will slow down after that to be within the limits of the growth rate of gross domestic product of Iraq.
must take these numbers with extreme caution because the volatility of the Iraqi legal system and the difficulties of arranging finance, security and uncertainty about the sustainability of electricity supply and other services means suspend or cancel some deals.
A good paint president of Mesopotamia Financial Investments is an Iraqi company provides consultancy to customers, analysts and foreign "Many of the project is not completed. sign a contract and are advertised value, and discover the investors that the situation is more complicated than they thought."
In spite of the This is in line with the paint on other business people that the trend is towards increased investment. The data show company minimum Consulting that there is an increasing share of foreign activity in regions other than Baghdad and the Kurdish region.
said Abdul Aziz Hassoun Executive Director of the Association of private banks in Iraq that several foreign banks bought stakes in local banks, including HSBC. S. me. C, who bought stake in Bank of Dar es Salaam, although due to start several banks to operate in Iraq by June, a Fransabank and the Lebanese French Bank and the Bank of Lebanon, the Gulf and all Lebanese ish addition to the Bank of Turkey.
and U.S. companies also intensify its work in Iraq. Activity was limited to U.S. companies in the years that followed the invasion, except oil and gas deals which is attributed in part to security concerns. But its share of the commercial activity of foreign hit 12.4 percent last year to become second only to South Korea, which accounted for 21.5 percent, according to data minimum.
It was about 25 percent of transactions in foreign in 2011 in residential real estate and more than 20 percent in oil and gas sector and about 20 percent in the generation of electricity and eight percent in water and sanitation, which shows that the primitive infrastructure in Iraq is an opportunity for investors and a barrier at the same time.
and the annexation of Iraq refers to the network airlines in the region to the growing interest in business. In the past few months launched Qatar Airways and Turkish Airlines and flydubai flights to Iraq or announced plans to strengthen its operations there.
said Sousse from Citi that Iraqi politics has gradually become more stable in the coming years with the arrival of oil wealth to more people. In the meantime, will enhance the growth of the oil industry the level of demand in other sectors such as housing, electricity and transport.
said paint from a company between the two rivers that these opportunities will keep foreign investors interested in Iraq, despite the difficulties. "In the end there is a demand and the role of business is to meet it. will find a way to do so. "
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