Speakers at London Conference Highlight Iraq Potentials, Challenges

By Ben Finch

LONDON – For Kurdistan and Iraq to continue economic growth and encourage foreign investment, wide-ranging reforms of financial and legal systems are needed, according to distinguished speakers at an important conference in London on Wednesday.

Infrastructure and housing across Iraq also need to be modernized, according to speakers at the conference at London’s Mansion House, who agreed on Iraq’s great potential and talent.

Lord Paul Deighton, Commercial Secretary to the UK Treasury and one of the men behind the success of the 2012 Olympics, said: “All parts of the population must see investment in the right conditions for prosperity. Iraq is an ambitious country; it should be.”

He noted that, “The economic growth of 10 per cent for several years is extraordinarily impressive. The people, both in Iraq and throughout the diaspora, have extraordinary skills and talent.”

But he contrasted that against the challenges.

“Over 70 per cent of Iraqis think corruption may have got worse. Most Iraqis still do not have a bank account. A strong, sustainable, real economy cannot be a cash economy,” Deighton said, referring to an absence of solid links between Iraq and international banking.

“And the rule of law is the key to creating a stable environment in which institutions and companies are happy to invest for the long term. There must be a level playing field and absolute fairness and regulation so investors feel secure.”

The conference, held in the City of London’s Mansion House, the home and office of the City’s Lord Mayor, was organized by Baroness Emma Nicholson, trade envoy to Iraq and founder of AMAR International Charitable Foundation. It is the seventh time the conference has been held in London.

“The Iraq Britain Business Council (IBBC) is delighted with the success of our recent London conference,” the Baroness said. “More than 80 business leaders from across Iraq joined leaders of the region’s Chambers of Commerce to make the long journey from their home cities to the UK. They met more than 100 British businessmen and women and also some senior politicians from both the UK and Iraq.

“Over the two days we heard of the huge opportunities on offer for trade and investment in Iraq and also from many of the people who want UK companies to take up those incredible offers. These are plans that will transform Iraq from the Kurdish region in the north to Basra in the south, and it is wonderful, as both the executive chairman of the IBBC and British prime minister’s official trade envoy to be playing a part in this.”

Iraq’s deputy prime minister, Dr Rowsch Shaways, flew in especially to speak at the meeting, underscoring its importance. Dr Safaaldeen Al-Safi, minister of finance, and Dr Fareed Yasseen, Iraq’s ambassador to France, also attended.

Currently, state-owned banks hold 90 per cent of the assets but do not hold enough capital, according to Bishr Baker of Ernst and Young. “The state banks are under-capitalized, they only have 20 per cent of the capital. People deposit in the state banks because of the deposit guarantee they provide. Should this guarantee be extended to the private banks as well?” he asked.

Laws such as a deposit insurance scheme have been mothballed, and while banks in Kurdistan cry out for credit they cannot receive this because there is a lack of capacity in the system. Baker continued: “We need to upgrade the whole education system so it produces accountants and bankers, lower management, middle management and upper management.”

Ahmed Muallah, managing director of Standard Chartered in Iraq, said: “International investors are incredibly bullish on Iraq. But there is a need for a distinct plan on banking. Where do we want to be in five, 10, 20 years time?”

While Kurdistan is more advanced than the rest of Iraq, mainly due to the autonomy it has converted into a peaceful have in violent-ridden Iraq, it has many of the same needs as other parts of country, Simon Collins, the British Ambassador to Iraq said.

“They need help to define and deliver projects and sector strategies to cover everything from project definition to delivery,” he said. “The reality is that the young people need jobs and they’re good. With the right training they’re world class. Military officers who go to Sandhurst come out top of their class, better than the Americans.”