ERBIL, Kurdistan Region – Tough times lie ahead for the world economy as a result of the coronavirus pandemic, especially for oil producing nations, yet the Kurdistan Regional Government (KRG) Board of Investment has set out an ambitious plan for growth in 2020.
With a raft of infrastructure schemes designed to attract private foreign investment, the KRG appears determined to diversify the economy away from oil – an overreliance upon which has left Iraq and the Kurdistan Region extremely vulnerable to global price fluctuations.
Industry, agriculture, and tourism seem to be particular priorities in the 2020 investment plan, together with big infrastructure projects in water, electricity, housing, and mass transit. Health, education, social care, and banking are also considered high priorities.
Since it was created in 2006 under Investment Law no. 4, the KRG Board of Investment has implemented 890 projects, opened up more than 65,500 dunams of land for development, and has overseen a total capital investment of $52 billion, covering every sector of the economy except oil and gas.
The vast majority of this was state spending (81 percent), while the remainder came from foreign investors (12 percent) and through joint ventures (7 percent).
With a drop in oil revenues putting a dent in the KRG’s public investment fund, and a renewed spat with Baghdad threatening its 12.67 percent share of the federal budget, the KRG Investment Plan 2020 is a clear invitation to foreign firms to spend in Kurdistan.
Industry
In its plan, the Board of Investment identifies industry as “a pillar of development”. It highlights the availability of raw materials in the Kurdistan Region for expanding its production of metals and other materials.
Food manufacturing is also an area with promise thanks to the Kurdistan Region’s rich agriculture. The board hopes development in this field will help the Kurdistan Region “achieve food security”.
The outbreak of coronavirus has demonstrated the value of domestically manufactured medical supplies – items that can quickly fall into short supply when imports are in high demand.
The board has therefore prioritized moves to develop a pharmaceutical industry in line with current Good Manufacturing Practice (cGMP) regulations.
Land will be opened up for new industrial cities and zones where these industries can grow sustainably, according to the plan.
Agriculture
Currently, the Kurdistan Region depends on neighbouring Turkey and Iran for cheap imports of fresh produce – benefiting consumers but harming local farmers. This is despite the Kurdistan Region possessing some of the richest soil and most clement growing conditions in the Middle East.
“The Kurdistan Region is considered as one of the most suitable zones for investment in the agricultural sector and water resources, due to the weather conditions and its geography,” the board said in its plan.
It views the development of local agriculture as the springboard for its industrial strategy.
“Agricultural investment products are used as a source to provide raw materials for investment in the industrial sector, such as the food, wood, leather, and textile industries,” it said.
Boosting agricultural yields will require dependable water sources, necessitating further investment in dams and reservoirs to store rain and river water for the dry months.
Beyond increasing water storage and raising groundwater levels for crops, dam construction could also allow the Kurdistan Region to harness hydropower to bolster its defective electricity supply.
More water could also reverse labor migration from the countryside into the cities by creating jobs. The tourism sector could also benefit from manmade lakes.
“Kurdistan is returning to its position as the bread basket of Iraq,” the board said.
What’s more, rather than depending on imports, the Region could cater for domestic demand and even begin exporting.
Tourism
To escape the dry desert climate of the south, Iraqis regularly travel north to the Kurdistan Region in the summer months to vacation.
While Iraq’s visa restrictions and poor security have made it an unpopular destination for foreign travelers, the Kurdistan Region by contrast is easily accessible and relatively secure.
This offers great potential for developing the tourism industry to take advantage of the Kurdistan Region’s outstanding natural beauty and share it with the world.
“The Kurdistan Region is full of scenic areas,” the board said.
“Investment in the tourism sector enhances the culture of coexistence and attracts tourists from abroad.”
“Investment in the tourism sector leads to strengthening of the economy and reduces unemployment in the Region,” it added.
Particular features the board is keen to highlight are the Region’s rare archaeological sites, including Shanidar Cave in northern Erbil province where the remains of Neanderthals are buried.
“The presence of archeological sites such as castles, caves, and springs that attract tourists will lead to the development of tourist areas,” the report said.
Civil society groups have urged the KRG to consider the environment, habitats, and sustainability when developing the tourist sector.
Electricity
Mindful of sustainable development, the board’s priorities for developing the Kurdistan Region’s electricity sector include investment in solar and hydropower.
“Investing in the electricity sector is an essential requirement, as the region needs to strengthen energy sources to operate its projects,” the report said.
However, this development will make use of “alternative and environmentally friendly energy instead of generating energy in ways that pollute the environment,” it said.
Green renewable energy could find a huge market in the sundrenched Kurdistan Region, where many are forced to rely on dirty private generators to keep the lights on through daily power outages.
Health and social care
Iraq’s health sector was once among the best in the Middle East. But decades of war, sanctions, and neglect have left infrastructure outdated and equipment in short supply, expertise lagging behind, and quality care out of reach for many.
Those with the financial means usually travel abroad for specialist medical procedures. Now the KRG Board of Investment wants the Kurdistan Region to make up lost ground and begin providing modern, quality healthcare.
It aims to “develop health facilities in the Region by bringing modern technologies and establishing hospitals in an advanced manner and in accordance with international standards,” the board said.
And if development of the health sector is successful, health tourists could soon be flocking to the Kurdistan Region instead – offering another source of revenue.
This will “reduce the financial burden on citizens” who will receive medical treatment in the Region instead of traveling abroad – not to mention job creation for graduates of local universities and medical and scientific institutes who might otherwise search for work overseas.
These priorities also extend to social care.
“Investing in the social affairs sector is very important,” the board said. “Through it, it is possible to help people with special needs, the homeless, the disabled, and orphans by using modern technologies in care centers.”
“It reduces the financial burden for families of people with special needs seeking treatment and care in the region instead of traveling abroad,” it added.
Transport
Trade, tourism, manufacturing, and construction depend on transport infrastructure.
Better road connectivity between the Kurdistan Region’s towns and cities, more land crossings with the trading partners, and greater airport capacity will allow more cargo to pass and unlock the potential of the Region’s workers and entrepreneurs.
“Investment in transportation aims to develop this sector in parallel with other sectors,” the board said.
This will involve “connecting the region with international roads through regional border gates” and “the development of airports in the region by developing their zones in terms of tourism, trade, and cargo, and increasing the number of terminals.”
Education and youth
Attracting investment of modern infrastructure requires an educated workforce able to adapt to new advances in technology and the demands of the globalized economy.
The KRG Board of Investment is therefore prioritizing development of the higher education sector, “by establishing scientific centers for various specializations.”
Medicine and engineering appear to remain priorities, with the expectation that private sector organizations will establish and fund departments.
“The establishment of educational hospitals aims to build the capacity of medical staff in the region,” the board said.
It also aims to modernize the public transport system to help ferry students and teachers to campuses without adding more undue pressure to the road network.
“The establishment of public transportation projects via the private sector for students, professors, and university employees will reduce congestion in the city streets,” the board said.
One exciting objective briefly outlined in the plan is the development of a culture and youth sector through the private sector.
The board suggests a “technical sector” could be established, offering space for young people to develop their interest in the digital and high-tech sectors.
Comments
Rudaw moderates all comments submitted on our website. We welcome comments which are relevant to the article and encourage further discussion about the issues that matter to you. We also welcome constructive criticism about Rudaw.
To be approved for publication, however, your comments must meet our community guidelines.
We will not tolerate the following: profanity, threats, personal attacks, vulgarity, abuse (such as sexism, racism, homophobia or xenophobia), or commercial or personal promotion.
Comments that do not meet our guidelines will be rejected. Comments are not edited – they are either approved or rejected.
Post a comment