BAGHDAD – A translation of the morning of the Iraqi economy shows signs of life remained brisk increase achieved in its oil industry and the decline in violence. Iraq has been able with the help of international oil companies to raise oil production to 3 million barrels per day after that was no more than 2.5 million barrels per day before the US-led invasion in 2003. And expects the Iraqi government to expand this capacity to reach 10 million barrels a day within six years, something that will put Iraq in the ranks of major oil producers in the world.
The streets of Baghdad are filled with cars of the latest models, restaurants and coffee shops keep their doors open until late at night , and the people they could allow income to buy what became a series of endless variety of consumer goods. Says Kevin Carey, the chief economists from the World Bank: “There is common sense that taking the money to infiltrate and spread.”
Extrapolations from the International Monetary Fund predicts that the Iraqi economy will grow by 11.1 percent this year to reach $ 144 billion. But it is not without reasons for concern.
The Iraqi government has not completed its formation until now despite the passage of two years on the elections, and political conflict continues to threaten to paralyze the work of the government, and the government itself is still trying to barely provide basic services such as electricity. Add to this that al-Qaeda remains a threat is tempted to raise the civil war through attacks directed towards selected targets for this purpose of encouraging signs that attest to that of the Iraqi economy is taking the recovery of foreign investments.
In the last year attracted Iraq foreign investment worth 55.67 billion dollars in addition to other economic activities, and this represents an increase of 40 percent from the previous year, as indicated by company “minimum Frontier Consulting,” and this means that investors have over that view, which was longer Iraq, the violence, analysts say. Says Carey, “When you can attract the attention of foreign investors, it means that you are on the right track.”
The U.S. companies hesitate to enter Iraq in the first instance, he says Shaker Zamili director of the Baghdad of the investment, but Chinese companies did not show such a frequency. He adds: “If you went to the province of Wasit will find it like in Beijing.” Referring to the conservative oil-rich southern, working Shanghai China Electric to build power station under a contract worth one billion dollars.
In the last year the value of Chinese investments and other business activities in Iraq at more than $ 3 billion, as reported by the company minimum. The South Korean investments in the first place in Iraq, with a volume of $ 12 billion, according to the report. Being a company from South Korea, specializing in the construction and development talks with the Iraqi side on a deal anticipated $ 35 billion to build 500 thousand housing units with infrastructure related and useful report minimum.
Expected that there will be a rapid expansion in the construction industry as they try to Iraqi government fill the acute shortage of housing. It is estimated that Iraq, he says Zamili, he needs to build more than 800 thousand house or apartment.
I have taken U.S. companies show more interest in Iraq recently, and the Exxon Mobil among a number of big oil companies working to develop Iraqi oil fields. As well as Iraq agreed to a contract worth $ 2.3 billion to buy 36 fighter jet F-16. The report adds company minimum that U.S. companies began to achieve other successes in the fields of construction and real estate, tourism and agriculture.
Improvement in the areas of the oil industry and security built a sense of confidence.
says Jared Levy, a Senior Analyst on the Middle East working for a company High: “I realized people to Iraq after today will not only witness the steady increase in oil imports year after year, and most of them no longer thought of the possibility of a setback or regression to the shafts of the civil war. “Although this did not achieve the Iraq only limited progress in diversifying its economy, analysts say. Is its inhabitants, who number more than thirty million people is not just a small principality can employ all its citizens within the generated oil.
The Iraqis know this, says Carey, who adds: “the dominance of oil on the economy involve risks touches all oil exporters, the concern that these proceeds will go without leaving a permanent impact on the benefits of long-term for the Iraqi people.” Iraq’s economy is still dependent on the government primarily basis, and more than 30 percent of Iraq’s budget of 100 billion dollars go to pay salaries and pensions, according to the World Bank, thus draining money that can be directed to strengthen the infrastructure.
Most Iraqis kept looking to the government for to jobs. This Zouhair and says Hammadi, who heads a program to help young Iraqis to study abroad: “It is an old system did not extend the hand of change.”
As well as slow down of economic activity rusted dysfunctional systems developed by the former dictator Saddam Hussein. Says Hammadi said his father wanted to sell the building in Nasiriyah, a city in southern Iraq, but getting approval took him two years, and the process is not complete yet.
Is that consumers are willing to buy and spend, despite this, Valmkhazn replete oven microwave oven, computers, air conditioners, TVs wide screens. Said Ali al-Rubaie, a sales clerk in one of the agencies selling big cars in Baghdad: “happens to sell 75 cars in one day through this exhibition, it is market Jabbar.”
But analysts say that consumers alone will not pay the economy forward, because this consumption It is not productive, he says Hamadi. keep many investors are eyeing a short-term investments, particularly as they look to secure government contracts rather than risk their capital in expensive investments may not bear fruit only years later. Such a heavy reliance on government contracts must raise questions about the intervention of nepotism and cronyism. Says one Iraqi contractors known to have previously worked with the Americans and the Iraqi government over the years, and that his company is currently working in the establishment of a huge project for water treatment. Says this contractor that contracts obtained was awarded on the basis of merit and efficiency, but some of his rivals had been giving preferential treatment, regardless of the issue of efficiency.
Despite all these drawbacks seen by economists and business people that the prospects that lie ahead for Iraq is enormous.
Says Subhi Khudairi, a businessman an American of Iraqi descent based company managing a series of actions, including contracts for the export of oil, that things are moving in the right direction and it can move faster and wider if there was more of Iraq’s political stability. Everyone here says Khudairi winners.