Promising indicators for the horizon of business in the Kurdistan Region

SULAIMANI, Kurdistan Region — Yasin Rashid, the spokesperson of Kurdistan Investment Union, expects big investment projects to resume in the Kurdistan Region, and so the government and investors are gearing up for a new phase.

“From now on, the government will implement the reward and punishment system for investors. Maximum attention will be given to agriculture, industry and tourism,” he said.

In 2014, the Iraqi government cut the budget share allocated to the Kurdistan Region, including salaries of employees who had nothing to do with politics. This, in part, led to an economic crisis in the Kurdistan Region.

However, the economic conditions of the Kurdistan Region have been improving recently due to rising oil prices, reduced government expenses and cleaning the bloated public sector’s payroll. So, investors feel safer to do business in the region.

Rashid is also owner of a residential housing project in Sulaimani province. He spoke about a decree issued by KRG Prime Minister Nechirvan Barzani to arrest a number of investors in the province of Erbil.

“Five of them have been arrested, and two have left Kurdistan. The court will summon some investors in the coming days,” he said.

Rashid went on saying: “These investors had recently poorly managed their projects. They were careless.”

By punishing bad and careless investors, investors will from now on are expected to pay more attention to their projects and hence will not think about making money alone.

“Investors will then know that they will be investigated and fined for poor performance. Bad investors had tarnished the reputation of investment in the Kurdistan Region in the eyes of the outside world. Nowadays, KRG Prime Minister Nechirvan Barzani is communicating a message to international investors that mistakes of the past have been rectified and there currently are good chances for investment,” he said.

Barzani has also said investors who have played a role in building the local economic infrastructure will be awarded and recognized in a ceremony to be attended by foreign diplomats.

During the past three years, officials in Baghdad capitalized on the situation in the Kurdistan Region by drawing investors from the Kurdistan Region to southern Iraq to do business there.

But the situation has now reversed with widespread unrest and protests sweeping through southern Iraq.

“One of the big Kurdish investors in Baghdad has taken a big project. He wants to build a 5-star hotel. He contacted us, saying the situation is bad for them and they regret. Some of these investors have returned to Kurdistan,” Rashid said.

Yasin Rashid went on saying: “There is a Kurdish investor who has taken on a $1billion electricity project there. Some have taken on big industry and construction projects.”

Some investors in the Kurdistan Region suffered big financial losses because of the decreasing values of the Iranian and Turkish currencies. That is why the prime minister and his deputy are working to bring Kurdish investors from Georgia, Iran, Turkey, Iraq and other countries back to invest in the Kurdistan Region.

He spoke about the big tourism project in Dukan which is done by Faruq Company

“It costs $1 billion and will be one of the biggest tourism projects of the Middle East. Kurdistan will step into a big tourism stage after this project is done,” said Rashid.

If the unrest in southern Iraq continues, another wave of IDPs will turn to the Kurdistan Region and this will put pressure on the housing sector. Over the past two years, Turkey exploited the opportunity and allowed Iraqis to buy properties in Turkey.

According to data compiled by the investors’ union, in 2017, 125000 people from the Kurdistan Region and Iraq bought properties in Turkey.

“Buying 125,000 houses in Turkey means $18 billion from Kurdistan and Iraq went out to Turkey,” he said.

According to the spokesperson of Kurdistan Investors’ Union, investors from Erbil have bought out some big projects in Sulaimani, namely Mas Cement Plant which produces 50,000 tons of cement daily, a steel factory, and the biggest shopping malls — Family Mall and Majdi Mall.

He added: “Some investors from Sulaimani have gone to Erbil and are busy with big projects there, notably the biggest guesthouse across Iraq which will be built in Erbil.”