Tueller, Talabani acknowledge obstacles to economic reconstruction at Ninewa Investment Forum

ERBIL, Kurdistan Region – Nineveh province might be rich in diversity, but over two years after its capital Mosul was liberated from Islamic State (ISIS), Iraq's second city and the province surrounding it remain economically devastated.

Speaking on Wednesday at the USAID-funded Ninewa Investment Forum in Erbil, both US Ambassador to Iraq Matthew H. Tueller and Kurdistan Regional Government (KRG) Deputy Prime Minister Qubad Talabani acknowledged the formidable obstacles to economic reconstruction in the province.

Organized by the Iraq Governance and Performance Accountability (IGPA) project and funded by the US Agency for International Development (USAID), the forum aims to "enable investors and other stakeholders to learn about the investment potential of Ninewa and to meet with [Iraqi] businesses that are ready for growth and expansion."

Underscoring concerns about the security environment and heavily damaged infrastructure of Nineveh province, the NIF is being held in Erbil rather than Mosul.

In his keynote address to a room full of international investors and Iraqi entrepreneurs, Deputy Prime Minister Talabani noted that "Nineveh is a multi-ethnic, multi-faith and multicultural province. Its strength and potential lie in its diversity."

However, he followed up with the grave warning that "Mosul, like Kurdistan, is not detached from the rest of Iraq. Iraq today is facing a deep social and political crisis. Demonstrations have paralyzed the political system and brought the government to its knees – we are facing a period of great uncertainty."

US Ambassador Tueller spoke to more regionally specific concerns in an interview with Rudaw English later in the day. Despite stating his firm belief in the "tremendous potential" of Iraq's youth, he stressed that "it is necessary that security be provided for Mosul and other areas of Iraq by the people of Iraq and by locals in particular."

He also addressed the continued risks faced by civilians due to armed groups outside the control of the Iraqi federal government.

"The presence of groups that are not invested in the building up of a prosperous, secure and sovereign Iraq is impeding the return of displaced persons, it's imposing burdens on businesses...so we need a security structure."

Mosul remains a shell of itself in the wake of more than two years of brutal and devastating occupation by the Islamic State group (ISIS). Many of its inhabitants, particularly ethnic and religious minorities, have fled to the Kurdistan Region; over half a million have yet to return as Nineveh's provincial government battles to re-establish infrastructure, ensure the safety of its citizens, and weed out rampant corruption.

Despite the obstacles, Mosul's business community is resolute in its commitment to rebuilding the city and the province.

Qusay Hashim al-Araji is president of Al Layth Company, which sells electronics and home appliances all over Iraq. Born and raised in Mosul, he is a mechanical engineer with over twenty-five years of experience manufacturing and distributing appliances.

Araji's factory in Nineveh, the only factory for local production of air conditioners in Iraq, was completely destroyed by ISIS in 2014. Undeterred, he built new showrooms in Duhok and Najaf, and began to rebuild his factory in Mosul as soon as the city was liberated in 2017.

"The business in Mosul was completely damaged. The buildings, the materials in my warehouse, also I have a petrol station – also that was damaged and bombed. Everything. They don't leave anything for me," he said in recollection of the ISIS occupation in 2014.

"But after liberation, I started rebuilding...now we are doing our business and the place is very safe and we don't have any problems."

Rula Falih Ali al-Saleh is director general of the Iraqi Company for Bank Guarantees. In her position, she offers loan guarantees for small and medium-sized enterprises across Iraq. She agreed with the assessment that there are obstacles to economic development, but felt that the main problem was a lack of support for the private sector.

Saleh cited the average Iraqi citizens' inability to qualify for bank loans as a key issue preventing the growth of small businesses in Iraq. The number of licensed banks in Iraq has increased, she pointed out, but the banks cannot issue loans to people with no collateral.

After a panel discussion featuring Jamal Ware, a senior advisor to the United States Export-Import Bank, and Hal Ferguson, senior deputy assistant administrator for USAID's Middle East bureau, Saleh was disappointed at US agencies' focus on large public sector agreements at a time when private sector investment is needed to foster job creation and stimulate economic growth.

"No fund? We are talking about helping Nineveh people. The people of Mosul need that money. Where is the help now?" she said. "That's a kind of huge loan for the government of Iraq, and we are dumping more and more [investment capital] into debt."

Saleh went on to criticize US agencies for large public sector investments that fail to produce tangible results.

"I wonder, do you have the intention to help the youth, or the unemployed, or to help the small and medium-sized enterprises in Nineveh? I think the answer coming is, there are no funds," she said.

"They said, 'we are already putting 400 million [into Nineveh province].' OK...where is this 400 million?"

She posed a possible solution by suggesting the creation of a regulated fund that would provide Iraqi businesses with a third party guarantor when they apply for loans to start or expand their businesses, but was pessimistic about the likelihood of such a fund being established.

Araji echoed these sentiments about the need for Iraqi government support for the private sector.

"The whole government is not focused on supporting small businesses and regional businesses...Small businesses are the ones employing people. USAID is coming from outside and sponsoring this amazing conference for small businesses. Our government is not."

He juxtaposed the scarcity of private sector investment with excessive funding for the country's bloated public sector, describing it as the driving factor behind the protests raging across Baghdad and southern Iraq.

In spite of all of these issues, Araji concluded on a note of strength and optimism.

"The main thing that distinguishes Iraqis in general and in particular the people of Mosul, is that they are academic, they strive for success, and they are certain that the future will be better," he stated.

"The proof is that immediately after reconstruction, we started rebuilding, and we started working, so that people could return to their homes and their jobs."

Tueller, Talabani acknowledge obstacles to economic reconstruction at Ninewa Investment Forum

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