Foreign investment in Iraq between obstacles and solutions.
former deputy minister of trade and researcher in Iraqi legal and economic affairs
Obviously we can say that creating the right and the suitable environment is one of the most important influences which were attracting capital and investors to the country. the conditions and requirements that attract investment may be related to natural factors that exist by nature, such as the availability of labour, natural resources, the need of the market and the economy, and these are present in Iraq. They may be requirements that the state administration must prepare through appropriate legislation and laws in which clarity, simplification and stability are required in addition to security and political stability because the capital is cowardly operating in safe and stable conditions let alone the importance of having specialised professional institutions that facilitate the work of investment and investors. This needs to be activated and reconsidered. Some obstacles to foreign investment in Iraq and proposals to address them can be discussed as follows.
First: The presence of the legal and legislative system that attracts investment.
Here, we find that the Iraqi investment law issued in 2006, which was considered in effect since 2007, has not kept pace with the fundamentals of investment in accordance with the legislation applied in many countries of the world, which reduces its amendment by the legislative authority. So that it meets the need of the foreign investor and on the condition that the law includes a clause stipulating that the investment law is the one that must be applied in the event that its texts conflict with other laws. Or conduct an urgent review of all laws and regulations that conflict with the provisions of the Investment Law.
In addition to the necessity to include in the investment law new provisions that give financial and service facilities to the foreign investor. In terms of tax and customs exemptions and facilitating the introduction of foreign machines, equipment and expertise.
Second: fighting corruption
Corruption is considered one of the most important factors in expelling investment and it is the most dangerous reason for alienating foreign capital and giant companies with a good reputation.
According to the reports of international organisations concerned with fighting corruption, Iraq is at the forefront of countries that complain of widespread corruption. This is a bad factor in the effort to attract foreign investment.
Accordingly, the Iraqi institutions specialised in fighting corruption must take the highest levels of firm dealing. Reducing the rates of corruption and placing Iraq among the safe and authorised countries for investment work there. Whether it is the Integrity Commission or the Public Prosecution Service and activating the administrative and financial role of the Public Prosecutor. Or the judicial investigation authorities specialised in the field of anti-corruption. Or the Office of Financial Control. Here, the efforts of these institutions and their work must be united through the creation of a higher authority that has broad powers in the field of unifying the anti-corruption measures followed in the aforementioned bodies.
Third: Real activation of the procedures for starting the investment process followed in government institutions.
Here, we mean activating the role of the National Investment Commission and the Registrar of Companies Department associated with the Ministry of Trade and the Industrial Development Directorate associated with the Ministry of Industry and the Ministry of Interior regarding giving approvals to foreign investors.
Because the aforementioned department and institutions need to include information technology in its work and the importance of assigning its management to managers who have the experience, efficiency, integrity and good handling. In addition to the necessity of simplifying procedures and avoiding red tape and excessive workshops whose negatives are more than their positives. The importance of including its employees in developmental courses outside the country to benefit from international experiences in the field of facilitating the work of investment and investors.
Fourth: Development of banking and banking institutions.
As banks are of great importance in the field of investment promotion. In Iraq, we find over 45 private banks and seven government banks. It is mostly not up to the term bank or bank. They need to develop their business tools in terms of the extent of their use of banking technology and the development of their dealings with external banks and increase the efficiency of their employees, and here the role of the Central Bank of Iraq is primarily responsible for oversight of the work and performance of these banks as it must issue strict instructions to those banks to increase their capital and increase efficiency Workers in it and tightening control over its work.
Not to mention an important role that the central bank must play in combating money laundering and smuggling of money in order to reassure major international companies that their competitors are the owners of clean capital and here we are facing real and balanced competition.
Fifth: The stability of the security and political situation.
The security and political instability are considered a factor in expelling foreign capital and investors, and the Iraqi government must take steps towards achieving this stability in all ways in terms of achieving stability and social justice and favouring the supreme state’s interest over the interest of the parties and parties holding the authority. The absence of the law and the presence of armed actors outside the scope of the law prevents any foreign investor from entering the Iraqi economic market.