Iranian Investors Urged to Consider Iraq as Profitable Option

“Considering the neighboring country’s strategic position, Iraq features important ports and airports, and has the capability to play a stable role in undertaking distribution at low costs,” he said.

Behzad noted that the Iraqi government has introduced a multitude of investment plans aimed at promoting the country’s reconstruction, IRNA reported.

The Iraqi government has reportedly published a list of 157 projects for which it is seeking investment. They include rebuilding destroyed facilities such as Mosul airport, diversifying the economy away from crude oil sales and developing transport, agriculture and oil-related industries, including petrochemicals and refining, Financial Tribune reported.

In a meeting with Iraqi officials in Baghdad in March, Iran’s First Vice President Es’haq Jahangiri said Iran is ready to allocate a credit line amounting to $3 billion to Iraq for rebuilding the war-ravaged areas of the neighboring country.

Jahangiri also said the credit line will be given so that “Iranian companies and its private sector can have a more serious cooperation in rebuilding Iraq.”

Iraqi officials say rebuilding the country after three years of war with the self-styled Islamic State terrorists will cost more than $88 billion, with housing a particularly urgent priority.

Director General of Iraq’s Planning Ministry Qusay Adulfattah told an international donors’ conference held in Kuwait last month that about $23 billion will be needed in the short term and more than $65 billion in the medium term.

The conference was aimed at discussing efforts to rebuild Iraq’s economy and infrastructure, as it emerges from a devastating conflict with IS militants who had seized almost a third of the country.

Iraq declared victory over IS in December, having taken back all the territory captured by the militants in 2014 and 2015. 

The seven provinces attacked by the militants suffered losses worth $46 billion, including the destruction of 147,000 housing units, and the security forces were set back by $14 billion. Tens of billions more were lost indirectly through damage to the wider economy and years of lost growth, according to the Iraqi Planning Ministry.

“Iraq’s strategic position, population and competitive prices make the country an excellent export destination in the region as well as the world,” Behzad said, adding that Iraq’s population of 38 million offers a good opportunity for production, sales and providing alternative services to imports.

According to Behzad, workers and experts in Iraq are well-trained, 21% of Iraq’s population have high school diplomas or university degrees, and 14% have vocational and academic certificates. He added that there are many specialists in the fields of engineering, medicine, agriculture and management in Iraq.

The commercial attaché also said low operational costs and competitive wages are also among incentives for making investment in Iraq. 

“Engineering wages in Iraq are 89% lower than those in the UAE, while wages for skilled workers are 92% lower than those in Saudi Arabia and are also lower than the USA and Europe.”

Referring to other incentives in Iraq, the Iranian envoy said investors are exempt from taxes and duties for up to 10 years and it can be extended to 15 years if the Iraqi partner has majority stakes.

Behzad said low tax rates are also noteworthy.

“Abundance of raw materials in Iraq is another advantage,” he said, adding that Iraq has one of the largest oil and gas reserves in the world.

Iran-Iraq non-oil trade in the last fiscal year (March 2017-18) totaled $6.5 billion, registering an increase of 4.96% compared to the year before, according to the Islamic Republic of Iran Customs Administration.

Iran exported 13.09 million tons of commodities worth $6.42 billion to the neighboring country, down by 8.40% in tonnage and up by 4.79% in value year-on-year.

Iraq exported 80,429 tons of goods worth $77.44 million to Iran, indicating a growth in both tonnage and value by 51.91% and 21.50% respectively.

Earlier, Behzad listed the commodities Iran should prioritize in export to Iraq. The top-priority categories include industrial machinery and equipment; pharmaceuticals and health facilities; food products; detergents and cosmetics; textile; petrochemical and basic oil products; construction materials; electric home appliances; cellular products; chemicals and minerals; fruits and ornamental plants; livestock products; industrial and herbal plants; leather and metal products.

According to Nayyereh Piroozbakht, the head of the Institute of Standards and Industrial Research of Iran, as per the recent agreement between Iranian and Iraqi customs officials, 12 Iranian commodities exported to the neighboring country will be exempt from standard control inspections upon entry to Iraq. She noted that the number is expected to increase to 50 in the near future.