IRAQ | Economy

[alshawi1234]

Iraq has to use the oil money for building its industry and tourism sector.

By having locally made goods, the money will STAY in iraq instead of going out.

[Al-Hashimi]

I wondered about something. What is the level of taxes for foreign firms in Iraq?

Could lowering the taxes attract more foreign investments?

Shoud we make some parts of Iraq tax-free in order to boost investments?

[sheytanElKebir]

taxes are very low to non existent already

[Al-Hashimi]

Yes, I know that the taxes for Iraqis are nearly non-existant compared to Western standards but I was not sure about that paid by foreign firms.

What could be done to turn Iraq into a center of investment/economic boom in our region? Or certainly among the developing countries in our region?

If we assume that we fix the most basic parts such as lowering the level of corruption, more competent leaders, solve the Iraqi Kurdistan issue, expand the oil industry and oil/gas production etc.

[Ali - Iraq]

----

[BigDreamer]

you do realise that this article is from 2011 right?

[Ali - Iraq]

Originally Posted by BigDreamer

you do realise that this article is from 2011 right?

Didn't read it :p . How embarrassing.

[Sinjar]

Iraqis cheer Merril Lynch’s economic growth estimates for their country

By Shaymaa Adel, Azzaman, December 8, 2012

Iraqis of different walks of life have welcomed a report by an American bank that their country will see the fastest growth in the world this year and in 2013.

The bank, Merrill Lynch, one of the world’s leading financial management and advisory companies, has said in a recent report that Iraq was to record 10.5% increase in Gross Domestic Product (GDP) for two successive years with the potential to preserve one of the world’s highest growth rates in the years to 2017.

Local newspapers appeared with front page headlines, saying that Iraq has surpassed China as the world’s fastest growing economy, as the bank estimated a growth rate of 7.7% for China for this year and the upcoming one.

“We are at a crossroads,” declared Kamal al-Basri, head of the state-run Institute for Economic Reform. “This is the time to urge the government to adopt policies for decisive solutions to upgrade the country’s infrastructure.”

The high growth rate, unseen in Iraq’s history, is mainly attributed to substantial hikes in oil exports and earnings. Basri said the government was required to turn oil earnings into investment and extend a helping hand to the private sector through what he described as “strategic partnership.”

The report by the American bank would not have come at a better time for the beleaguered government of Prime Minister Noori al-Maliki who is at odds with the Kurds in the north over oil development and territorial claims.

But the news has been received with glee and many attribute it to the successes achieved by the oil ministry in propelling oil output to 3.3 million barrels a day.

With relative tranquility reigns across the country, local newspapesr have been calling for more transparency and an all-out war on corruption so that the whole country, mainly low-income groups, will reap the benefits of economic growth.

[Ali - Iraq]

Iraq seeks national quality management strategy
ECONOMY | 2012-12-12
Iraq is developing a national strategy for comprehensive quality management, officials at the Ministry of Planning's Central Bureau for Standards and Quality Control announced.

The new strategy, overseen by bureau, seeks to improve production levels, the provision of services to the public and the testing of goods imported to local markets in both the government and private sectors.

"The bureau is about to prepare a clear-cut national strategy for quality, and for that purpose we sponsored two conferences," bureau chief Saad Abdul Wahab told Mawtani.

More than 30 quality management research papers were discussed during the second of these conferences, which concluded a few days ago, Abdul Wahab said.

A committee made up of bureau members and representatives from other ministries is now compiling the strategy based on recommendations made at the conferences, and the council of ministers is slated to approve it next year.

The goal is "to draw a comprehensive plan ensuring the application of comprehensive quality management in Iraq," Abdul Wahab said.

The strategy "aims at reforming and developing the quality system in government institutions and private firms, to raise the level of the products and services they produce, in a way that would guarantee them a competitive edge in local markets," he added.

PROMOTING QUALITY MANAGEMENT
Around 1,140 government inspectors will be tasked with promoting international quality standards in concert with the International Standards Organization, which sets quality and efficiency benchmarks for goods and services.

The new strategy includes a project financed by the Swedish Board for International Development that will support quality infrastructure in all production, industrial and service sectors in collaboration with the UN Organisation for Industrial Development, Abdul Wahab said.

"We also seek through this strategy to adopt new projects to enhance all sections of the Standards Bureau, including building additional laboratories for standardisation and testing of imported goods and products to protect local consumers, in addition to drafting plans to ensure the smooth flow of imports through border crossings," he said.

By adopting international standards, public and private sectors can improve their production and service performance, "thus reinforcing consumers' trust in them," Nisreen al-Attiya, the Planning Ministry's director of quality control, told Mawtani.

"This strategy extends to five years and its application will start, in the first phase, at our ministry's offices and departments, followed by a limited number of ministries up to the inclusion of all government and private entities," she said.

Al-Attiya said co-ordination and collaboration between all parties was necessary to ensure the strategy's success, along with "involving citizens in those efforts by reporting on the goods and products that do not conform to the specified standards of quality".

"Implementing this strategy will represent an important step towards applying the standards of testing the quality of products and services used in most countries of the world, including neighbouring countries," said Hussein al-Meraby, a member of the parliamentary economic committee.

"We currently need the existence of such a strategy, which would contribute to protecting Iraqi consumers," he said.

Al-Meraby said it is essential to use the latest international standards in quality testing and to train national staff on their use, in addition to activating the tariff law because of its prominent role in controlling the import process and generating financial revenue for the state.

[Ali - Iraq]

Iraqi Stock Market: Circulation value increases by 64 billion in November
Iraqi Stock Exchange announced on Tuesday a “great” increase in the circulation value last November which amounted to 64 billion Iraqi Dinars, while the United Bank for Investment confirmed finishing the measures required to increase its capital.

The Stock Exchange traded during November in 114 billion 367 million actions, amounting to 117 billion 234 million Iraqi Dinars; in comparison with last October during which the total number of traded actions was 45 billion 371 million for the value of 63 billion 981 million Dinars. 65 companies undertook transactions from a total of 84 electronically listed companies.

Karbala Hotels -HKAR recorded the highest increase among companies in terms of value traded followed by Sumer Commercial Bank. The companies with the highest decrease were National Household Furniture Industry IHFI followed by the Metallic Industry and Motorcycles IMIB. The number of contracts of trade during November reached 11406 contracts while in September only 10395 contracts were signed.

The number of actions bought by non-Iraqi investors during last November was 2 billion 667 million actions, with a value of 4 billion 679 million Iraqi Dinars. The number of sold actions amounted to 3 billion 620 million with the value of 5 billion 715 million Dinars. 1303 purchase contracts and 745 sale contracts were executed.

United Bank for Investment confirmed finishing the legal measures required to increase the company’s capital during November, from 200 billion Dinars to 250 billion Dinars.

Iraq Stock Exchange was established in June 2004 and used manual exchange at the time. In April 2009, certain companies partially adopted electronic exchange. In 2010, electronic exchange was adopted for all 85 enlisted companies from the 7 sectors: banking, industry, hotels, agriculture, investment, insurance and services.

[purearch72]

When is Erbil stock exchange coming out again?

[Sinjar]

never enough: how much money does iraq really need for budget?

niqash | Seerwan Jafar | Dubai | 13.12.2012

Iraq’s 2013 budget amounts to US$118 billion. But the figures don’t add up. Doing the sums results in one conclusion: unless something is done differently, Iraq will face serious debt and development problems.

In late October, the Iraqi Cabinet, headed by Iraqi Prime Minister Nouri al-Maliki, approved the 2013 draft budget. The total amount approved was USD $118 billion, making for an US$18 billion increase on 2012’s budget and making the budget Iraq’s highest ever. The draft will eventually go to the Iraqi Parliament for ratification.

If one considers the state of Iraq – still plagued by power cuts, growing youth unemployment and almost totally dependent on oil revenues – then an increase is surely a positive thing. But will this upcoming budget do the trick?
If Iraq is to become a more developed nation, is this increase enough and is it sustainable? And if it’s not, then what would the Iraqi budget be ideally?

A look at the facts and the figures around this issue may help to work out an answer to those questions. Iraq is near to completely reliant on oil revenues. Oil exports account for 95 percent of government revenues and are equal to 70 percent of the country’s gross domestic product.

Since the 2003 US-led invasion that toppled former Iraqi leader Saddam Hussein, and then the subsequent removal of international sanctions, Iraq’s oil production and exports have increased steadily. Exports have risen this has corresponded with an increase in oil prices throughout the 2000s, beginning from 2003. Due to this, Iraqi revenues from the oil sector have increased dramatically and this has been reflected in surges in the annual budget. The 2013 budget is the highest in Iraq’s history.



But now we return to the question at hand: how big does the Iraqi budget need to be for it to be adequate? To decide how much is enough, one can look to developed nations for a benchmark - specifically the OECD average, to derive an approximate “ideal” figure from recent expenditure. The following table indicates how much each country spent per citizen in 2009; it also shows the OECD average spend per citizen for 2009.



This turns out to be US$15,331 per citizen. Meanwhile Iraq’s 2013 draft budget is US$118 billion. With Iraq’s population of over 34 million this means Iraq would only be spending about US$3,440 per citizen.

And if Iraq had to spend the OECD average on its citizens, this would add up to $500 billion. This is nigh on impossible.

A look at Iraq’s oil income indicates this: the most that oil income has ever bought Iraq have been US$83 billion in 2011. As Iraq’s highest ever oil revenue is significantly less than its highest budget of (US$118 billion in 2013) and drastically less than the desired budget of over US$500 billion, it quickly becomes evident that oil revenues are never going to cover Iraq’s spending needs.

Of course some might argue that the increasing Iraqi oil production will allow the government to meet Iraq’s fiscal needs in the future. Unfortunately this doesn’t seem very likely. Saudi Arabia is the world’s largest oil exporter and the highest that country has ever earned from oil revenues was US$318 billion in 2011 – still a way away from US$500 billion required in an “ideal” budget.

The International Energy Agency predicts that Iraq will produce more and more oil – up to 4.4 billion barrels per day by 2020 – but the revenues from that won’t even cover Iraq’s budgetary needs today, let alone in 2020 when the population will have risen to an estimated 41.8 million people.

In conclusion, even a simple look at these figures indicates that Iraq will have to look into diversifying beyond its oil revenues if it is ever to develop as a modern nation. The Iraqi government must shift gears and begin broadening revenue streams in order to meet the country’s needs and to see Iraq flourish as a modern nation in the years to come.

[Sinjar]

Originally Posted by purearch72

When is Erbil stock exchange coming out again?

again? I don't think Erbil ever had a stock exchange?

[Ishtarporten]

Originally Posted by Sinjar

again? I don't think Erbil ever had a stock exchange?

But didnt they opened a new one?

[Sinjar]

Originally Posted by Ishtarporten

But didnt they opened a new one?

No but they have plans for opening one

[Euphrates]

موازنة العراق الفين وثلاثة عشر تعد الاكبر في تاريخ الدولة العراقية الحديثة منذ تاسيسها حيث فاقت المئة وثمانية عشر مليار دولار.

الحكومة العراقية قدمت مؤخرا الى البرلمان مشروع موازنة العام الفين وثلاثة عشر ..هذه الموازنة التي فاقت كل التوقعات تجاوزت سقف المئة وثمانية عشر مليار دولار لتكون الموازنة الاكبر في تاريخ العراق ولتستحق عن جدارة وصفها بالانفجارية والجامحة لكنها في الوقت نفسه تختلف في كل شئ عن نضيراتها في العالم كما انها مليئة بالمفارقات والمفاجئات ولا تخلو ايضا من الطرائف كيف لا وهي التي دائما ما تبدأ بعجز وتنتهي بفائض.

[BigDreamer]

Originally Posted by Sinjar

never enough: how much money does iraq really need for budget?

niqash | Seerwan Jafar | Dubai | 13.12.2012

Iraq’s 2013 budget amounts to US$118 billion. But the figures don’t add up. Doing the sums results in one conclusion: unless something is done differently, Iraq will face serious debt and development problems.

In late October, the Iraqi Cabinet, headed by Iraqi Prime Minister Nouri al-Maliki, approved the 2013 draft budget. The total amount approved was USD $118 billion, making for an US$18 billion increase on 2012’s budget and making the budget Iraq’s highest ever. The draft will eventually go to the Iraqi Parliament for ratification.

If one considers the state of Iraq – still plagued by power cuts, growing youth unemployment and almost totally dependent on oil revenues – then an increase is surely a positive thing. But will this upcoming budget do the trick?
If Iraq is to become a more developed nation, is this increase enough and is it sustainable? And if it’s not, then what would the Iraqi budget be ideally?

A look at the facts and the figures around this issue may help to work out an answer to those questions. Iraq is near to completely reliant on oil revenues. Oil exports account for 95 percent of government revenues and are equal to 70 percent of the country’s gross domestic product.

Since the 2003 US-led invasion that toppled former Iraqi leader Saddam Hussein, and then the subsequent removal of international sanctions, Iraq’s oil production and exports have increased steadily. Exports have risen this has corresponded with an increase in oil prices throughout the 2000s, beginning from 2003. Due to this, Iraqi revenues from the oil sector have increased dramatically and this has been reflected in surges in the annual budget. The 2013 budget is the highest in Iraq’s history.



But now we return to the question at hand: how big does the Iraqi budget need to be for it to be adequate? To decide how much is enough, one can look to developed nations for a benchmark - specifically the OECD average, to derive an approximate “ideal” figure from recent expenditure. The following table indicates how much each country spent per citizen in 2009; it also shows the OECD average spend per citizen for 2009.



This turns out to be US$15,331 per citizen. Meanwhile Iraq’s 2013 draft budget is US$118 billion. With Iraq’s population of over 34 million this means Iraq would only be spending about US$3,440 per citizen.

And if Iraq had to spend the OECD average on its citizens, this would add up to $500 billion. This is nigh on impossible.

A look at Iraq’s oil income indicates this: the most that oil income has ever bought Iraq have been US$83 billion in 2011. As Iraq’s highest ever oil revenue is significantly less than its highest budget of (US$118 billion in 2013) and drastically less than the desired budget of over US$500 billion, it quickly becomes evident that oil revenues are never going to cover Iraq’s spending needs.

Of course some might argue that the increasing Iraqi oil production will allow the government to meet Iraq’s fiscal needs in the future. Unfortunately this doesn’t seem very likely. Saudi Arabia is the world’s largest oil exporter and the highest that country has ever earned from oil revenues was US$318 billion in 2011 – still a way away from US$500 billion required in an “ideal” budget.

The International Energy Agency predicts that Iraq will produce more and more oil – up to 4.4 billion barrels per day by 2020 – but the revenues from that won’t even cover Iraq’s budgetary needs today, let alone in 2020 when the population will have risen to an estimated 41.8 million people.

In conclusion, even a simple look at these figures indicates that Iraq will have to look into diversifying beyond its oil revenues if it is ever to develop as a modern nation. The Iraqi government must shift gears and begin broadening revenue streams in order to meet the country’s needs and to see Iraq flourish as a modern nation in the years to come.

what a silly comparison .. Iraq doesn't collect income tax, or VAT .. it's funded purely by oil revenue.. if iraq collects as much taxes as the OCED of course they can eventually have a 500 Billion budget..

this argument is very silly.. OCED are a bunch of developed nations.. we are on the other had a long way from being 'developed'.. their fiscal policy focus is on sustainability with modest growth.. our focus is rapid growth and improving the standards of living .. which is why we are tax-free..

[sheytanElKebir]

not only income tax or VAT... Iraq does not print debt by the barrel load like those countries...

In fact following keynes, Iraq SHOULD print a lot of debt now since the country is:
a- destroyed and needs investment in all infrastructure and industry
b- has a pretty much guaranteed huge future windfall from oil to pay back the debts in future

That would be what I would do right now in Iraq:
1- protectionism for local industry and farming (and investments to import only technology to develop it)
2- raise debt to fund the reconstruction of the country

[BigDreamer]

World Bank pledges $900 million for Iraq


(Reuters) - The World Bank pledged $900 million to Iraq over the next four years to help it create jobs, build stronger institutions and improve social inclusion, the global development lender said in a statement on Tuesday.

Iraq's government developed the strategy with the World Bank, the private sector, and other stakeholders to focus especially on better management of Iraq's vast oil wealth and improve its investment climate. The programs will also focus on inclusion of women.

(Reporting by Anna Yukhananov; Editing by Eric Walsh)

[Ali - Iraq]

Iraq approves private free-trade zone near Baghdad
ECONOMY | 2012-12-19
The Iraqi government approved an investment project for the construction of a private free-trade zone south of Baghdad in efforts to boost the country's economy.

The Ministry of Finance's General Commission for Free Zones "approved two requests submitted by a group of local investors to set up a private free-trade zone on an area of no less than five dunams (12,500 square metres) in the area of Uwaireej, south of Baghdad, to be used for commercial activities", Sabah al-Qaisi, the commission's chairman, told Mawtani.

"This investment project will be the first of its kind in the country," as no free-trade zone area was ever set up by the private sector before, al-Qaisi said.

The project was approved "in accordance with the instructions and guidelines stated in the Free Zones Law No. 3 and after extensive studies of its economic feasibility", he added.

Al-Qaisi said the investing parties will prepare special project designs by contracting a consultancy bureau, and then submit these designs to the Free-trade Zones Commission for approval in order to start construction.

The commission "is about to approve building two other free zones through private investment as well", he added. "The first is in the province of al-Sulaimaniya, and the other in the province of Dohuk, near the Ibrahim al-Khalil crossing with Turkey."

Iraq already has three main free-trade zones belonging to the public sector, located in Khor al-Zubair in Basra, Flaifel in Ninawa province, and another in al-Qaim, Anbar province, al-Qaisi said.

"These zones are quite large in size, because they host various economic activities and processes, including commercial and industrial," he added.

Al-Qaisi said it is important to allow for diversified investment in order to boost national development, adding that "it is important to encourage and attract local and foreign investors and provide the required facilities […] to advance the country".

"Free-trade zone projects could play a major role in energising the national economy by pushing the cycle of development forward and creating new work opportunities for Iraqis, in addition to playing an essential role in financing the state budget," al-Qaisi said.

"We set a condition that all investors must hire 50% of [the workers needed from] local manpower," he said, adding that it is important to "diversify sources of funding and to avoid total reliance on oil as the sole source of financial revenue".

STRATEGIC LINK BETWEEN EAST AND WEST
Building a free-trade zone in Baghdad "is a positive step towards boosting commercial activity in Iraq by strengthening and facilitating world trade and preventing the accumulation of goods at the borders", MP Mahma Khalil, rapporteur for the parliament's economy and investment committee, told Mawtani.

"These projects often yield other economic benefits, which could bring in huge financial revenue to the state treasury, create jobs for the thousands of unemployed and boost investment," he added.

Khalil said "Iraq's strategic position as a link between East and West allows it to be at the forefront of trading nations."

"This requires that we build more free zones and accelerate the implementation of strategic projects, such as the Great Fao Port and the Dry Canal projects," he added.

Economic expert Majid al-Soury said building a private free-trade zone in Baghdad "falls within the framework of the government's policy and plans to boost the economy in Iraq and attract investors".

Similar experiences in other countries, including neighbouring states such as Jordan, proved the importance of such projects in accelerating economic and investment development, al-Soury told Mawtani.

A free-trade zone "offers investors and businessmen consolidated administrative and banking facilities as well customs exemptions", he added.

Al-Soury said it is also important to develop existing free-trade zones currently operating in Iraq and modernising them by introducing new technology.

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