FDI & The Iraqi Private Sector

MENA-OECD Investment Programme

Khalid Mahdi

Baghdad, 2 February 2014

A joint private sector body in Iraq focused on economic reform. Its mission is to contribute to:

◦ Business Development

◦ Investment

◦ Economic Growth

◦ Entrepreneurship

The Center will achieve the above by:

◦ Identifying barriers to reform

◦ Working with the Government to implement tangible solutions and encouraging PPD

Working Groups

Secretariat

Steering

Committee The Center is led by the Steering Committee.

The Secretariat provides support to the steering committee and the working groups.

Regular discussions on reform issues will take place through Working Groups.

Working with: Zaha Hadid . Global Banking Alliance for Women . Chamber Trade Sweden . Risk Reward . Finance Interns . Middle East Association . Accenture (via Time to volunteer programme . Microsoft*. Iraq Business News. + Individual journalists from international media groups including New York Times. *(in discussion with Microsoft around their new Aspire Woman portal)

Nina is a new magazine and web portal for Iraqi women everywhere. Published initially in English and Arabic, distributed in country (and globally via the internet. Nina targets the special needs and interests of working women, reaching women executives and managers, as well as female entrepreneurs and thought leaders with an aspirational focus. The magazine is age inclusive however, it is expected that the main market will be aged 22 - 55. Nina recognises the importance of women as consumers and so creates a powerful forum for companies wishing to advertise their services to women with purchasing power.

50% of GDP (for 2012, constant prices)

> 90% of INCOME

<2% of LABOR FORCE

This reliance of economy on oil comes at the expense of local producers and service

providers. i.e. THE PRIVATE SECTOR

Accounted for 5% of 2010 GoI expenditures

Receive 87% of the total budget for economic subsidies

Take additional forms of hidden and off-budget subsidies (e.g., loans from state-owned banks; preferential access to electricity)

Source: World Bank

In order for Iraq to realize its potential and resume its position as a regional

economic power we will have to vitalize the private sector

Article 25 of Iraq’s Constitution stipulates that

"the State shall guarantee the reform of the Iraqi economy in accordance with modern economic principles to ensure the full investment of its resources, diversification of its sources, and the encouragement and development of the private sector".

Business ownership Source: CIPE

Business Size Source: CIPE

Financing Business Activities Source: CIPE

The Private Sector Development Strategy (2014-2030)

i. Understanding the Private Sector ii. Improving the Business Environment iii. The SME Programme iv. Implementation

The main success indicators for Pillar one is: a. The Government understands its role as a

facilitator and enabler for private sector, and views the private sector as a partner and associate.

b. The private sector understands its role and responsibility as a socio-economic actor and is working collectively to contribute to national economic growth and development

Some of the success Indicators expected for the PSDS Phase Three (2023-2030): a. Employment in the private sector increases to 50% or more of total employment; b. Private sector contribution increased moderately to provide 50% of GDP by 2030;

The NIC is faced with a colossal task of attracting investors and facilitating the investment process Engaging the Iraqi privet sector in investment activities as a 3rd party will aid in building its capacity, facilitate transferring knowledge and reduce the burden on the NIC and PICs

For example:

The development of properly managed economic zones where there is a clear legal framework

PPPs to include Iraqi private sector as well as international companies

Establishing a ‘Business Link’ department within the NIC and PICs

info@psdc-Iraq.org

www.psdc-Iraq.org

Questions?