Sunday, March 11, 2007
Spiralling economy as Iraqi entrepreneurs invest elsewhere
Economy
(Azzaman) Wealthy Iraqis are fleeing with their capital to neighboring states, dealing a heavy blow to the country’s war-torn economy. According to Mohammed Majeed, a private entrepreneur, the last few months saw “massive flight” of capital from the country. There are no statistics on the money leaving the country, but it is estimated that at least two million Iraqis have fled the violence that struck Iraq in the aftermath of the 2003 U.S. invasion.
The majority of Iraqis leaving the country are poor and can hardly make ends meet as refugees abroad. But among them are Iraqis with money, who are buying property and setting up businesses particularly in Jordan, Syria and other Arab states. Majeed said Iraqis with money were no longer willing to invest in the country due to the political uncertainty and mounting violence. “This is having a negative impact on the economy as most private entrepreneurs are selling businesses and fleeing with the money,” he said.
In a move to halt the flight, the Planning Ministry has upgraded the status of Iraqi contractors to enable them win deals which previously fell in the domain of foreign firms. Alaa al-Hilali, a businessman, praised the ministry’s move, but said more incentives were needed to lure Iraqi businessmen, industrialists and traders to stay.
Despite insecurity, the government has earmarked billions of dollars for development this year as part of its $41 billion budget. No foreign contractors can now venture into Iraq and the government almost wholly relies on domestic entrepreneurs to implement its projects. Fawzi Mohammed, who owns a contracting firm in Baghdad, said, the flight of Iraqi industrialists has resulted in a sluggish economy and higher unemployment. He said most private businesses were idle either because they could no longer compete with the influx of cheap foreign goods or their owners had fled the country.
The majority of Iraqis leaving the country are poor and can hardly make ends meet as refugees abroad. But among them are Iraqis with money, who are buying property and setting up businesses particularly in Jordan, Syria and other Arab states. Majeed said Iraqis with money were no longer willing to invest in the country due to the political uncertainty and mounting violence. “This is having a negative impact on the economy as most private entrepreneurs are selling businesses and fleeing with the money,” he said.
In a move to halt the flight, the Planning Ministry has upgraded the status of Iraqi contractors to enable them win deals which previously fell in the domain of foreign firms. Alaa al-Hilali, a businessman, praised the ministry’s move, but said more incentives were needed to lure Iraqi businessmen, industrialists and traders to stay.
Despite insecurity, the government has earmarked billions of dollars for development this year as part of its $41 billion budget. No foreign contractors can now venture into Iraq and the government almost wholly relies on domestic entrepreneurs to implement its projects. Fawzi Mohammed, who owns a contracting firm in Baghdad, said, the flight of Iraqi industrialists has resulted in a sluggish economy and higher unemployment. He said most private businesses were idle either because they could no longer compete with the influx of cheap foreign goods or their owners had fled the country.
Labels: contracts, economy, investments, Planning Ministry
