Panel Discussion on investing in Iraq and Kurdistan at Milken Institute

Panel Detail:
Tuesday, April 28, 2009
2:30 PM - 3:45 PM

Investing in Iraq

Speakers:

Zeki Fattah, Senior Economic Advisor to the Prime Minister, Kurdistan Regional Government

Charles Ries, Senior Fellow, Rand Corporation; former U.S. Ambassador to Iraq for Economic Transition Initiatives

John Sullivan, Partner, Gibson, Dunn & Crutcher; former Deputy Secretary, U.S. Department of Commerce

Moderator:

Stephen DeAngelis, Founder, President and CEO, Enterra Solutions LLC

A window of opportunity is open for doing business in Iraq.

Iraq is a leading source of human capital in the region and is motivated to re-establish its presence after years of war and unrest, and the international business community is interested in getting a stake in a country that will be a leader in the region, panelists said. But a dramatic increase in foreign capital will only occur upon stabilization of the overall security in the region, they said.

As security in the region increased dramatically from 2006 to 2008, so has U.S. interest in direct investments, John Sullivan said. Much of Iraq's potential lies in the young, urban, literate Iraqis who make up three-quarters of the population, he said. Nevertheless, panelists said investors need of real commitment from Iraq to accept foreign investments.

While 90 percent of the Iraqi government's revenue comes from oil and gas sales, Charles Ries said opportunity exists in other economic sectors, including agricultural development and human capital. He said the Iraqi government has become more open recently to infrastructure and development investments from foreign companies. For a full deployment of international investments, Ries said, the Iraqis need to establish a legal structure to regulate competition, liability protection, land ownership, intellectual property and, ultimately, compliance with World Trade Organization rules and regulation.

According to Zeki Fattah, Kurdistan is a model for the economic development in Iraq. The region, near Syria, Turkey and Iran, has a population of 5 million – 18 percent of Iraqis. After the destruction of war, the region has undergone major changes. Infrastructure has been rebuilt, and urbanization has taken place. The region is open to the private sector, and except for South Korea and the United States, all major economies have set up trade offices there. To give investors confidence, new laws have been passed guaranteeing repatriation of profits and protecting foreign investors from nationalization and expropriation.

Fattah said Kurdistan has capital but lacks technology, management and human resources. Highly educated individuals have emigrated from the region and have failed to return.

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