The economic and financial crisis in Iraqi Kurdistan is seeing projects abandoned and investors putting their money elsewhere.
Ahmad Ali is an Iraqi Kurdish businessman who’s been living in the Erbil province, in Iraqi Kurdistan, for years. In the past Ali often looked at the semi-autonomous northern region of Iraqi Kurdistan as the best place to invest his money. Not anymore.
Currently Ali is looking into building a mall and supermarket in the Kirkuk province, outside of Iraqi Kurdistan’s official borders, at the cost of US$50 million. He is also working on a residential project in the southern province of Dhi Qar.
It doesn’t matter where Kurdish investors put their money because ultimately the Kurdish region will benefit.
“As an investor, I look for the best opportunities. I don’t care about geography,” Ali told NIQASH. “At the moment southern and central Iraq are the best places to put my money.”
“The last few years we have dealt with a financial crisis, a slowdown and a significant decline in investment,” Yassin Mahmoud Rashid, the spokesperson for the Kurdistan Investors' Union, told NIQASH. “About 20 percent of investors have now left this market thanks to a decline in demand and the losses being incurred by some projects.”
In the past the Iraqi Kurdish government had guaranteed investment projects a steady supply of electricity and tax cuts for certain time periods, Rashid pointed out.
“But now the local government has started to violate its own rules,” he continued. “And investors are more inclined to invest outside of the Kurdish region or in southern Iraq because of those obstacles.”
Rashid has figures that indicate that investors have put about US$2 billion into other Iraqi provinces recently. “If those amounts were invested in Iraqi Kurdistan they would have provided job opportunities for more than 80,000 locals,” Rashid notes.
The local authorities have increased taxes and fees, complains another local businessman, Omar Ismail, who lives in Sulaymaniyah. Recently Ismail has been moving a lot of his financial investments to other parts of Iraq and he says that, besides the less positive outlook on taxes, there is also the issue of power and fuel supplies.
Then again, as Ali says, no matter where the money is invested, if the investor is based in Iraqi Kurdistan, some of it must come back to the region. “Kurdish investors have made very good use of investment opportunities in other provinces and that is a good thing,” he justifies his decision. “It doesn’t matter where Kurdish investors put their money because ultimately the Kurdish region will benefit,” he argues.