Thread: Archive News - Iraqi Dinar Think Tank - 08/09/09 - 09/01/10

Iraqis leave the Iraqi Stock Exchange in central Baghdad

File photo shows Iraqis leaving the Iraqi Stock Exchange in central Baghdad. In the run-up to a major investment conference in Washington, traders at Iraq's stock exchange pitched their ideas for where foreigners should put their money for the best return -- banks and hotels.





Iraq a compelling business opportunity say U.S. Investors

Iraqi Prime Minister Nouri a-Maliki, as many as six other Iraqi government ministers, and U.S Secretary of State Hillary Clinton will be attending the Iraq Investment and Business Conference in Washington DC on Tuesday and Wednesday in a bid to drum up support for private sector U.S investment in Iraq.

Prior to the conference Niqash spoke to Zaab Sethna, a partner at Northern Gulf Partners, a US-run financial advisory services provider seeking to link capital to business opportunities in Iraq, to discuss the prospects for foreign investment in the country.

Niqash: There is a lot of money to be made in Iraq. How great is the interest?

Sethna: There is large interest in Iraq especially in Europe, the Gulf and Asia. Unfortunately U.S investors and companies have been a little slow so far. But hopefully that is changing. The conference should raise the visibility of investment in Iraq and show U.S investors that Iraq could be the most compelling opportunity of our era. The big picture is very attractive: Iraq has valuable water, land, energy, and human resources. It has potentially the largest oil reserves in the world and is the only country that has the potential to triple or even quadruple its current output. I have heard that the Washington conference is fully sold out and can’t accommodate anymore attendees, so I would say that is a good indicator of how great the interest is.

Niqash: Describe the investment climate for foreign businesses. What sort of challenges are there for U.S. investors?

Sethna: Iraqis recognize that they need foreign capital and expertise to achieve their development goals and the Iraqi government has made some admirable steps towards opening the business environment to external investment. The national investment law provides a variety of tax and other incentives for projects in most sectors outside of oil, including a recent adjustment allowing land ownership for residential real estate projects. Also, the security situation is significantly improved over the past two years. Yes, certain guidelines and precautions are still necessary, but we have an office in Baghdad outside the International Zone, and are generally able to do whatever we need to do.

Of course, Iraq remains a challenge for foreign investors including Americans. Iraq was not open to U.S businesses for quite some time. Americans generally know little about Iraq or the region, they don’t speak the language, and there aren’t many U.S firms that have the local business relationships necessary to succeed in Iraq. The banking infrastructure has improved but will need to develop further if it is to serve a large and liquid national economy such as we expect Iraq to become.

There is no lack of opportunity; there are opportunities in nearly every sector. Iraq has a need for everything right now. But most US firms aren’t able to e.xecute on those opportunities because they can’t navigate the complicated Iraq business landscape. Iraq has suffered wars and mismanagement of its resources for decades, and though they are making admirable progress in establishing a new state, it is still an evolving legal, regulatory, and bureaucratic environment. It’s difficult to just jump in and start up.

Niqash: Iraq is preparing for parliamentary elections in January. Is there any apprehension about moving forward with commitments with an uncertain political future?

Sethna: Many investors have an idea of uncertainty and paralysis in the period leading up to the elections but that is not a truly accurate picture. In fact we see that the looming election has actually pushed the Iraqi government to be more proactive in order to show progress to the electorate. One example is the negotiations with major oil companies which have suddenly made significant progress. Another is that Iraq is solving its payment issues with GE and Siemens for the electricity generating equipment that it ordered.

If the question is whether political uncertainty should deter U.S investors I would say no, it is certainly not deterring us. Iraq is going to have growing pains, and the preoccupation with what surprises January has in store could delay many projects. But it will be a speed bump, not a roadblock. If you are looking to make a quick profit in Iraq, the odds are not in your favour, it is still a turbulent place. But Iraqis recognize and appreciate investors who approach Iraq as a long-term opportunity, and investors who are willing to commit to the country's long-term development will be successful.

Niqash: Apart from oil, how and in what sectors can U.S. interests move into Iraq?

Sethna: Well, a number of international firms have committed capital to projects in Iraq, and various sectors are active; for example you have about US $2 billion already invested in telecommunications and nearly US $1 billion in cement. UAE sovereign related entities have recently announced a series of housing initiatives in conjunction with the Iraqi government, and a large contract for a sporting complex in Basra was recently awarded, so of course construction and related industries should experience growth. We see some specific opportunities in financial services. Again, it’s not so much about the sector, but rather how to structure and e.xecute your plans, find the right management team, and local partners. It requires commitment; you really have to focus on Iraq, have a presence on the ground.

Of course for U.S investors who aren’t looking for this kind of exposure there is also the Iraq Stock Exchange, which is small but growing, and has been a real success story. They have made a successful transition over the course of this year to electronic trading and depository. We invest in securities listed on the exchange, and we like the direction they are going.

Niqash: There is a legacy of corruption and nepotism in Iraq. How well will U.S. investors stomach such a climate?

Sethna: Well, first, I think it is mistake to think of this as an Iraqi problem, or even an emerging markets problem, particularly in a post-Madoff world. U.S investors have been able to successfully manage the climate in places like Egypt, China, or Russia, and I don’t see that Iraq should be any different. Corruption shouldn’t obscure Iraq’s other legacies, like vibrant commercialism and a skilled entrepreneurial class, which we find quite palatable.

That being said, yes, the environment is less than transparent, which requires the utmost care and diligence. We maintain strict zero-tolerance policies toward any form of illegal behaviour and take pains to ensure that we comply with all relevant regulations in this respect. To their credit, Iraqi officials recognize that they need to improve transparency in order to attractive foreign capital, and there have been a few high profile investigations regarding official corruption.

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An economist calls to amend the Banking Act and to develop mechanisms act in accordance with international principles

economic expert called to amend the Banking Act and the development of the Iraqi banking system and mechanisms of work in accordance with international principles.

Ali Mani Member of Iraqi economists told the independent press (Iba) said Monday that "the recommendations of the banking system, which was held in Baghdad early this year, require activation by the agencies responsible, where the main policies included in the recommendations required the Central Bank to review the mechanics of the work of some wares , particularly investment in the Deposit Account list."

"The legislative framework and legal and regulatory framework is one of the main triggers activity in this sector to establish a modern banking system, and those responsible to be aware of the importance of this role and catalysts, and seeking to implement a program to restructure the sector."

Mani stressed the "modernization of laws and banking systems to be able to attract savings and attract investment funds and strengthen the contribution of bank real economic growth in the country. Noting that although there are efforts to develop the financial system, but it still highlights the many obstacles preventing the access of banking reform to the overall objectives as possible."

He noted the inhibitor, "The relaxation of some regulations and laws will reduce the challenges associated with stimulating activity through the creation of a more open system Odinamekip in the banking sector."

The Attorney-Mahdi Al-Hafiz said in a statement earlier that has emerged significantly effect the required transformation in the banking system as a basic instrument of economic liberalization on all fronts, including the removal of price distortions and exchange rates and interest rates.

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Urgent: House of Representatives postpones voting on the election law

Postponed the House of Representatives at its meeting Monday to vote on the proposals on the election law the controversial parliamentary sessions to come.

A source in the parliament for (Antrzalaalami of the communication) that the Ad Hoc Committee consider amending the law has submitted a report, while still the greatest controversy about the list of closed and open between the political blocs Central Kurdish bloc's insistence on the list enclosed and the same constituency, while the issue of Kirkuk, the top discussions.

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Parliament requires the Minister of Oil in the twenty-fifth of this month

Confirmation of what the center said a source familiar with the Iraqi parliament will make the process question the oil minister Hussain al-Shahristani in the twenty-fifth of this month, noting that there are large files had been prepared for questioning on issues related to financial and administrative corruption.

Has shown a lot of MPs, their objections to the Presidency of the parliament hampered by the question the oil minister, despite the many requests made by the House of Representatives in this regard.

Shahristani is facing criticism from politicians and the Vice Dilatorily of his ministry, with accusations of financial corruption issues within the ministry and administrative.

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CBI dollar sales make fresh leap in daily auction

The Central Bank of Iraq (CBI) dollar sales made a dramatic increase in its daily auction on Monday to reach $195.060 million compared to $60.830 million during the previous session.

“The demand hit $10.350 million in cash, covered by the bank at an exchange rate of 1,183 Iraqi dinars, and $184.710 million in foreign transfers outside the country, covered at an exchange rate of 1,173 Iraqi dinars per dollar,” according to a CBI news bulletin received by Aswat al-Iraq news agency.

None of the 18 banks that participated in today’s session offered to sell dollars.

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Kurdistan Alliance: We will reject the election law if it insisted on some blocks on its position on Kirkuk
MP from the Kurdistan Alliance in the Iraqi parliament said on Monday that the Kurdistan Alliance bloc voting would reject or accept the law of the new election if the issues contained in violation of the Constitution and the decisions of the Federal Court.

Said Mohsen al-Sadoun, a member of the Legal Committee of the Kurdistan News Agency (AKnews) "Some political groups want to enter some sensitive issues in the election law such as the issue of Kirkuk," .. pointing out that "the Kurdistan Alliance bloc would reject the plan during his presentation today, if they insist on these blocks its position on Kirkuk."

He added that "consultations are continuing even now between the political blocs until this moment to reach a final agreement and agree fully on the election law, which will be presented to members of the House of Representatives during the session today."

The presidency of the Iraqi parliament has postponed the vote on the election law to today's meeting because of the completion of the Legal Committee for the introduction of legal amendments and the continuing differences between the political blocs on some paragraphs.

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Washington Conference: 500 companies and businessmen who intend to invest in the country

Concludes in today's Washington Conference of the Iraqi investment - the U.S. after achieving great success is the announcement of more than 500 companies and businessmen were willing to participate in the campaign and construction through the implementation of investment projects in the country.

These developments come with the agreement of Prime Minister Nuri al-Maliki and U.S. President Barack Obama on the development of relations between the two countries in accordance with the strategic framework agreement. "Prime Minister Nuri al-Maliki:" Iraq no longer poses a threat to its neighbors and has no aspirations to such acts. "He said al-Maliki In a press statement after meeting with Obama in the White House said: "The discussions with the U.S. president was good, as we have stressed to activate the role of investment in various sectors in the country," adding that "Iraq has suffered from dictatorship, destruction and devastation of infrastructure and the disruption of oil, agriculture and industry ". He stressed that" seek to promote development and the development of the Iraqi reality and give an opportunity for U.S. companies to participate in the Reconstruction of the country, "explaining that" all the circumstances appropriate for that, especially after the security situation improved and modified investment law. "hailed the U.S. President at the achievements of the Iraqi people, thanks to the wisdom and the dedication of political leaders and members of the Government of National Unity. Obama said:

"The continuous support of the United States and supportive of the direction the leaders in Baghdad, especially the conduct of elections and the closure of outstanding issues," referring to the need to unify visions, at the same time pledging to "stand with the Maliki government in its efforts to prevent external interference and the fight against terrorism." The two presidents agreed to continue and strengthen cooperation between Baghdad and Washington on the strategic framework agreement.

"The prime minister had been opened in Washington on the investment conference with the participation of more than 800 global company and a businessman, declaring that the Iraqi conference - the next U.S. will be held in Baghdad. Maliki called global companies and men business in all sectors to take advantage of investment opportunities offered by Iraq.

"he said in a speech at the opening ceremony," three years ago when my first visit to Washington, was on everyone's lips for the security file in Iraq and the picture was bleak until he gave up some of that continues to Iraq together with the works sectarian violence, "he said:" As for now, it has turned over a black page and check the security in all regions, and became the Iraqis and the mobility and visitors can wander among the governorates, "stressing that" we understand that security and economic development were interlinked and complementary and should be given the equal share of our attention " . It is said that the Prime Minister has arrived in Washington yesterday and met with U.S. Vice President Joseph Biden, U.S. Secretary of State Hillary Clinton. middle of this picture, sources attending the investment conference, said more than 500 companies and businessmen have expressed their willingness to invest in the country. The sources in a telephone conversation with the (morning) from Washington, said the Investment Conference achieved good success, as it was during his sessions offered around 750 investment opportunities in 12 industries, most notably in the area of housing, noting that the delegations, U.S. and other foreign will in the next few months to visit the country for these investment opportunities on the ground.

http://www.alsabaah.com/paper.php?so...page&sid=91957

Iraq oil needs time to develop production

E.xecutive said ConocoPhillips: that Iraq could expand strongly in its oil production, but this will not happen overnight., "Said Darren Jones, Managing Director of Global Business Development at ConocoPhillips in the policy-makers Arabs and Americans," the possibility exists, but everything would take these things and time. "

He added that Conoco Phillips is working with the Iraqi government a few years ago in the context of the country's efforts to boost its production of oil. "I noticed a real desire to move forward and increase energy productivity." Working in Iraq for a new service contracts with major oil companies in some of its oil giant. Such agreements to increase Iraq's production to nearly triple jump and featuring on the list of world producers.

According to figures for the U.S. Energy Information Administration, the average production in 2008 about 2.4 million barrels of oil per day.

In late June, "Iraq's first auction Energy President since US-led invasion in 2003. The Iraqi oil minister, said earlier last week: ConocoPhillips and Lukoil are competing with another consortium led by Exxon Mobil to lengthening West Qurna oil field.

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Banks, credit volume

Central Bank of Iraq has contributed to the achievement of genuine stability to the Iraqi market through monetary policy and, most recently cut interest rates on deposits by Iraqi banks, a fact that an opportunity and a test of the performance of the banking sector in the expansion of bank credit granted to Iraqi investors who are trying to take advantage of bank loans to support construction projects and construction.

On the fact that private banks are required to submit a draft strategy if the coalition be in the forefront of the housing projects and industrial projects, tourism and agricultural development in order to fulfill the letter, which was established banks to work and achieve.

Eight contribution in support of small and medium enterprises is still below the level and the real injustice was not many financial companies created for the purpose of supporting projects has so far not achieved the desired goal, and there is no indulgence, then we talk about the adventure and the risk in granting credit and loans, I expect the degree has fallen so much, especially after the year 2008, which yielded extensive action in the Iraqi business community.

So it is a call to expand the granting of credit and the terms of rational guidance Atakrj the regulations agreed upon between the Iraqi Central Bank and private banks and eight blocks of cash held by private banks to move the market significantly to growth and prosperity.

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View the electoral law on the Political Council for National Security

Declared a member of the Legal Committee in the House of Representatives Muhsin al-Sadoun it will display the electoral law on the political council for national security and because of the inability of the parliamentary blocs to reach agreement on it.

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