Corruption and a hostile environment are destroying the success of “investment” in Iraq

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[size=52]Corruption and a hostile environment are destroying the success of “investment” in Iraq[/size]

[size=45]The head of the “Iraq Al-Future” Foundation concerned with economic affairs, Manar Al-Obaidi, referred to the latest report of the United Nations Development Program, which revealed the exit of more than 5 billion US dollars in foreign direct investment from Iraq in 2023.[/size]
[size=45]With every economic crisis that Iraq witnesses, the country’s decision-making circles renew talk about the need to correct the general economic situation and attract foreign and local investments in order to begin reconstruction and provide job opportunities for young people.[/size]
[size=45]deterioration[/size]
[size=45]The report of the “Iraq Al-Future” Foundation concerned with economic affairs, according to Al-Obaidi, indicated that Iraq lost foreign investments exceeding 52 billion US dollars from 2013 until 2023.[/size]
[size=45]Al-Obaidi stressed the importance of foreign investments in stimulating economic growth, increasing job opportunities, and transferring knowledge, emphasizing that foreign investments are an important source of income for funds not linked to state revenues or local investments.[/size]
[size=45]Al-Obaidi identified the main reasons for the exit of these investments from Iraq, which include the deteriorating business environment, lack of transparency, accumulated bureaucracy, and multiple and conflicting decision-making sources, explaining that the lack of clear laws to protect foreign investors’ funds also contributed to this deterioration.[/size]
[size=45]Al-Obaidi described the private sector support programmes as “weak slogans”, pointing out that the totalitarian and socialist thinking is prevalent in government institutions, which has negatively affected the objectives of investment agencies that have focused mainly on local real estate investments rather than in the fields of energy, infrastructure and productive projects.[/size]
[size=45]Al-Ubaidi stressed that the continuation of socialist and pastoral thinking in government agencies will lead to the continued draining of foreign investments from Iraq.[/size]
[size=45]He stressed the need for a real will to improve the business environment through three basic elements: transparency, facilities, and protection, in order to attract foreign investors and strengthen the Iraqi economy.[/size]
[size=45]Unamended law[/size]
[size=45]The investment law alone does not guarantee the encouragement of foreign investment. It is necessary to work with advanced methods and appropriate conditions and provide suitable climates to attract capital to develop infrastructure and introduce modern technology.[/size]
[size=45]Member of the Parliamentary Investment Committee, Asaad Al-Bazouni, stated yesterday, Friday, that consultative meetings will be held to amend the country’s investment law.[/size]
[size=45]Al-Bazouni said, “The Parliamentary Investment Committee is working on amending the investment law, especially with regard to industrial investment, and discussing its provisions through large advisory sessions, especially since Iraq is now heading towards the private investment sector. Therefore, there is a need for the law to be suitable for the Iraqi environment and for investors from other countries.”[/size]
[size=45]He added that “work is underway on the law because it is of great importance in the field of investment, especially since Iraq needs investment because Iraq currently relies on oil and other simple resources,” indicating that “by activating investment and the private sector, there will be other doors for Iraq’s return,” and he explained that “the budget now has a large deficit and the decline in oil prices is declining and putting us in a big problem, especially since the budget was calculated on the basis of $60 per barrel.”[/size]
[size=45]He pointed out that “dependence on oil resources causes us major problems and we must depend on more than one resource. Iraq is capable in its industry, agriculture, investment and lands, and we need to provide a safe and suitable environment for economists, foreign investors and major international companies.”[/size]
[size=45]Complexity of procedures[/size]
[size=45]Despite the existence of an investment law, most investors suffer from complications and futile bureaucratic procedures that have begun to affect the country’s future.[/size]
[size=45]Economic researcher, Abdul Salam Hassan Hussein, points out the importance of investment partnership between the private and government sectors in achieving the interests of citizens, especially the poor and destitute.[/size]
[size=45]Hussein says that the investment process in Iraq is controlled only by large investors.[/size]
[size=45]He added that there is a government effort to “privatize” the public sector, according to what was indicated in Article 16 of the Triennial Budget Law, which exacerbates the rates of poverty, unemployment and deprivation, as the foreign investor is only concerned with profit, and he depends on foreign cadres and labor.[/size]
[size=45]He finds that political and partisan interference and corruption scourges prevent the government from controlling the investment file, explaining that there are more than 400 “fictitious” investment projects inside Baghdad.[/size]
[size=45]The scourge of corruption[/size]
[size=45]While the lack of a criminal law that holds corrupt people accountable, new practices, and anyone who tries to tamper with Iraq’s economic security is a reason for investment companies’ unwillingness to work in Iraq.[/size]
[size=45]Meanwhile, the Chairman of the Integrity Commission, Haider Hanoun, warned of “the economic effects caused by corruption at the local and international levels, reviewing some of those effects such as reducing investment rates due to investors fleeing the environment in which corruption is rampant, because they are forced to pay bribes, and causing an exacerbation and deficit in the general budget through tax evasion, or trying to obtain illegal tax exemptions.”[/size]
[size=45]He added that “among these effects are the increase in the cost and operation of projects, the weakness of the efficiency and quality of public facilities, the distortion of markets and the misallocation of resources by reducing the government’s ability to impose control and inspection systems, and the loss of the government’s supervisory control over banks, domestic trade and financial markets.”[/size]
[size=45]He noted that “corruption leads to increased poverty rates, poor income distribution, and the enrichment of the few at the expense of the many, which creates a state of discrimination, classism, and injustice among members of society, in addition to causing inflation by increasing the cost of business as a result of the bribes and commissions paid by companies, which forces the consumer to pay a higher price for the commodity than its actual cost.”[/size]
[size=45]It is noteworthy that Iraq ranked fourth among ten countries in the latest classification. This classification was evaluated based on several criteria, including GDP growth, inflation rate, growth in capital expenditure in foreign direct investment, and growth rate in foreign direct investment projects.[/size]
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