“Currently 24 Arab and other countries are investing in the Kurdistan Region, numbering about 260 companies,” said Hayder Mustafa, the Information Director at Kurdistan Region Investment Board.
“The total investment of foreign companies is 12 billion and five hundred million $US, in the fields of housing, agriculture, tourism and industry,” he added.
Turkey tops the list, according to the Investment Board’s figures, having the largest number of companies operating in the Region.
Investment in Kurdistan, however, comes with problems, such as a lack of information and transparency, government procedures, the absence of an effective banking system and lack of well-trained and experienced manpower.
The French Consul General in Erbil, Dr. Frederic Tissot added his own thoughts.
“I believe the biggest problem for investors in the Kurdistan Region is a shortage of communication,” he said.
He recommended that the KRG present the region to the outside world, to show what Kurdistan is like.
“Kurdistan has security, Kurdistan has international airports, it has roads, it has a good investment law, it has telephone and internet and above all it has a good investment opportunity. But, very few foreign investors know about all of these,” he complained.
He also mentioned that he still faces problems when talking to French companies, trying to convince them to invest in Kurdistan Region.
“Some of the French companies they don't differentiate between Kurdistan Region and the rest of Iraq in terms of security.”
Dr. Tissot advised the KRG to advertise the Region in the big newspapers in Europe, but the KRG refused to do so. However, he remains optimistic about the future of the economy, as long as the KRG develops across all sectors.
“If KRG only focuses on oil sector, that’s a very bad choice and I will be unsure about the future of Kurdistan’s economy,” he said, urging Kurds to invest in their agriculture, transportation and sewage industries.
The Kurdistan Region may face problems attracting foreign investment but loca businessmen face many problems, too.
To bring local private investors and the KRG closer, an NGO called The Kurdistan Information and Strategic Studies Center (KISSC), held 11 workshops. Investors have many concerns, including procedures, nepotism, company registration and licensing – a long, laborious process – and a lack of transparency. They also complained about a lack of support forthcoming from the government.
“The government does not provide us with information and data and long term loans,” said Muhammad Abdullah, a local investor in the housing sector.
Abdullah said that in Turkey, government gives a priority to local investors, providing them with all the necessities for investors such as electricity, water, loan and less tax.
“Here in Kurdistan we have a very good investment law, but the government does not provide other necessities, like electricity, water and data,” he complained, also pointing to problems in planning and a culture of nepotism.
“We hear that government has a lot of projects, but when we look into them, sometimea we face a lot of complexity, we don't who is in charge of the projects, who we should talk with,” he said.
Dr. Tissot urged the KRG to make a website and put all the suggested projects, data and information in it, saying the website would make the work of businessmen and government much easier.
KRG lacks a modern planning system. Experts demand KRG makes long-term plans and facilitates research and studies on the economic situation.
Dr. Muhammad Shahban, Head of the Economics and Administration Department at Duhok University, said a good planning system will solve most of Kurdistan’s problems.
“KRG should have a very good and clear plan. And all the government establishments should communicate the same things,” he urged, adding, “When the government meets investors and businessmen, the government should make them understand easily, what its strategy is and what does it wants,” he said.