UAE presence grows in Kurdistan
ERBIL, IRAQ // In a single fell swoop earlier this summer, the UAE became the biggest source of foreign investment for the northern region of Iraq known as Kurdistan.
The announcement by Damac Properties of a US$4.5bn (Dh16.52bn) property development outside the capital city of Erbil has proven to be the beginning of a wave of investment by UAE companies looking to join in the economic revival of Iraq.
In recent weeks, the Abu Dhabi-based property developer, Al Maabar International, announced a $10bn project in Baghdad and Etisalat’s chairman has said the company would take a major stake in Korek, the Kurdish telecom company.
And Bunyan Real Estate, based in Dubai, has signed a memorandum of understanding for a project in Sulimaniya worth $2bn, according to Kurdish government officials.
“The UAE is the number one country for Iraq right now,” said Mohammed Amin Baban, a senior economic adviser for strategic investment issues to Nechirvan Barzani, the Kurdistan regional government’s (KRG) prime minister. “Erbil and Kurdistan are the crossroads into the rest of Iraq. Security is very good and the investment laws are here.”
The Kurdish region has a semi-autonomous government and its own army, the peshmerga, giving it more stability than the rest of the country. But after decades of strife with Saddam Hussein and what Kurds like to describe as a double embargo – from Saddam Hussein’s Baghdad and the rest of the world – the region has a badly damaged infrastructure network. Power is available only for about eight hours a day and the sewerage system is ancient and dysfunctional.
“For investors this is a virgin land,” said Herish Muhamad, the chairman of the KRG’s Board of Investment. “We need everything.”
Attempts to draw in foreign investors thus far have been only relatively successful. Half-built structures haunt the city and residents complain of a lack of jobs and poverty. But the emergence of the UAE as a major investor has drawn attention from government officials, particularly in the agriculture sector.
“We want to renew Kurdistan to its former production capacity,” said Othman Shwani, the minister of planning. “This will provide food security for all of Iraq, but we can also begin exporting to places like the Gulf countries.”
The government’s five-year plan is to get the farms of the Kurdish region up to the point where they can provide enough food for the population and then begin exporting. Already, the government is in talks to tie up with agriculture companies from Europe to improve the yields of the farms and is working on a way to export directly to Dubai. One UAE company, the Bin Khalid Trading Company, made a $3.5 million investment into agriculture in Dohuk.
Mohammed Rauf, the minister of trade, said the government was shipping its first test samples of the agricultural projects to Dubai next month.
“We want to establish an economic integration with the UAE,” he said. “We have the potential to produce a lot of agricultural produce and they need food because they have trouble growing things there.”
The KRG was opening an Erbil Business Centre in Dubai this year and the government had bought two spaces at Global Village in Dubailand to promote trade, he said.
The UAE is taking a leading role in developing the energy sector in Kurdistan, too...
Full story: http://www.thenational.ae/article/20081021/BUSINESS/490066004/1001/OPINION
