2015 autumn conference report
TRANSCRIPT
10th London Conference
Church House and Eversheds Headquarters
9-10 November 2015
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AGENDA—DAY ONE
08.15 Arrival and registration, coffee
08.50 Move to Assembly Hall
09.00 WELCOME ADDRESSES:
The Baroness Nicholson of Winterbourne
Tobias Ellwood MP, Parliamentary Under-Secretary, FCO
Dr Salih Husain Ali, Iraq Ambassador to UK
Jaafar Al Hamdani, Chairman Iraqi Federation of Chambers of Commerce
09.45 SESSION 1: Iraq – Presentations by Iraqi Chambers of Commerce.
Chairman: Baroness Nicholson of Winterbourne
10.45 Coffee Break
11.15 SESSION 2: Establishment of PM’s Delivery Unit
Chairman: Amar Shubar, Management Partners
Panellists: Dr Mahdi Al Alak, PM Haider Al Abadi’s Chief of Staff, Richard Page Jones,
Delivery Associates, John Curtin, EY
12.15 SESSION 3: Attracting International Investment
Chairman: Dr Anne Kerr, Mott MacDonald
Panellists: Andreas Meletiou, Standard Chartered, Mike Douglas, SKA International, Jim Bowden,
KBR, Charles Walker, Zaha Hadid Architects
13.15 Lunch sponsored by SKA International
14.30 SESSION 4: Oil & Gas – Competing Globally
Chairman: Stephen Culshaw, Amec Foster Wheeler
Panellists: Kate Dourian, International Energy Agency, Mike Wenham, BP, Colin Findlay, Severn
Glocon,
15.45 SESSION 5: Women in Business in Iraq
Chairman: Angelique Lecorps, G4S
Panellists: Samah Jassam, PhD student Portsmouth University, Christina Slade, Bath Spa University,
Zainab Al Ribhawi, EAME Country Manager for Iraq
16.45 Baroness Nicholson of Winterbourne, closing remarks
17.00 Tea
18.00 Close of the conference
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AGENDA—DAY TWO
08.45 Arrival and registration, coffee
09.30 All delegates to be seated
09.35 Welcome and opening remarks by Baroness Nicholson of Winterbourne
09.45 Iraq Investment Environment by Tawfiq Tabbaa, Eversheds
10.05 Presentation on Due Diligence Processes for Companies Entering Iraq by Toby Chinn, Control
Risks
10.25 Financing of SMEs in Iraq by Jorge Vila, Iraq Middle Market Development Foundation
(IMMDF)
10.50 Coffee
11.15 Delegates seated
11.20 SESSION 1
Chairman: Rasmi Al Jabri
Panel Discussion by Ali Chasib, Basrah Investment Commission, Zuhair Sherba, Najaf
Chamber of Commerce, Muhammed Dhia Hussein Imran, Al Khut Chamber of Commerce, Eng
Sadeq Hashim Fadhil, Babylon Chamber of Commerce
12.20 SESSION 2
Chairman: Richard Cotton
Presentations by Suren Thiru, British Chambers of Commerce, Peter Bishop, London Chamber
of Commerce and Industry, Clive Wray, Business West
13.20 Final remarks by Christophe Michels, IBBC Chief Operating Officer
13.30 Lunch
15.00 End of conference
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WELCOME FROM IBBC EXECUTIVE CHAIRMAN BARONESS
NICHOLSON OF WINTERBOURNE
I welcome you most warmly to the Iraq Britain Business Council’s (IBBC) Autumn Conference held
at Church House and the Eversheds Headquarters. This conference will take on the topic ‘Iraq in the
Global Marketplace’. This event marks our tenth conference in London and comes at a time when the
IBBC’s membership continues to grow steadily despite the challenges that have faced the Iraqi
economy over the past year.
I would like to thank the new Iraqi Ambassador in London, HE Dr Salih Husain Ali, for joining us
today. His presence, and that of so many other distinguished guests from throughout Iraq, is most
welcome. I must also thank the wonderful line-up of speakers who will be addressing us over the next
two days, especially Tobias Ellwood MP, Parliamentary Under Secretary of State at the FCO. We are
grateful to all the experts from across the IBBC membership who will be speaking.
Special thanks of course go to our conference sponsors SKA International and Severn Glocon. We are
indebted to them for their continued support. I thank Eversheds for generously hosting the second day
of the conference in their headquarters in London.
I must also thank Kingston University, who are hosting our Iraqi delegates on a third day site visit,
which promises to be a most interesting and rewarding occasion.
Finally we are grateful to those who have promoted this event on our behalf, The Oil and Gas Year,
Business West, British Water, The Al Kindi Society for Engineers, The Institute of Supply Chain
Management, The British Chambers of Commerce and The London Chamber of Commerce.
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WELCOME ADDRESSES
DAN CHUGG (ON BEHALF OF TOBIAS ELLWOOD MP)
Mr. Chugg began his address, made on behalf of the Parliamentary Under Secretary of State at the
FCO, by thanking the Baroness Nicholson for hosting the conference. He acknowledged that Iraq is a
great country of promise and potential and recognised that the Iraqi people have a strong desire to
build a better future for themselves.
“The recent decrease in oil prices coupled with the cost of conflict has placed great pressure on Iraq,”
Mr. Chugg stated. He expressed his gratitude of the United Kingdom for the approximately 800
personnel fighting against ISIS for our security in the region.
With respect to trade and industry, Mr. Chugg affirmed that British companies are willing to help
increase oil production and build infrastructure with aspirations to triple oil production by 2022.
Furthermore, the IEA estimates Iraq could by the second largest oil producer by 2024.
Mr. Chugg stressed that it is important to remember that the support of the Iraqi economy should not
solely be focused on the oil and gas sector. British exports to Iraq have remained healthy throughout
the past year, particularly in the fields of machinery, scientific instruments, pharmaceuticals and
vehicles.
To conclude, Mr. Chugg affirmed that the continued building of the import/export industry between
the two states, leads to economic resilience in the long term. Diversification in the Iraqi market is
essential and will lead to the strengthening of the private sector.
DR. SALIH HUSAIN ALI – IRAQI AMBASSADOR TO THE UNITED KINGDOM
Dr. Husain Ali thanked Baroness Nicholson for hosting the IBBC’s London Conference, and for her
efforts to bring together businesses, friends, and the members of many of Iraq’s chambers of
commerce.
The Ambassador began through acknowledging the plethora of opportunities that exist in Iraq,
particularly with respect to the oil and gas industry. However, he stressed the need for investment in
many new industries as well. The British public and private sector want to invest in farming, which
serves multiple purposes. In addition to its agricultural use, this industry can be utilised for medical
and industrial purposes. He cited the Tigris and Euphrates rivers as two examples of natural resources,
which serve as phenomenal irrigative tools, to assist in crop cultivation.
Dr. Husian Ali also addressed a call for investment in engineering and construction opportunities. He
stated, “Iraq has the largest reserve of sulphur in the world” in addition to the second largest reserves
of phosphate, and large reserves of aluminium and several other minerals.
As a way of conclusion, Dr. Husain Ali stressed that both nations should embrace the IBBC motto
“together we build Iraq,” and that together common objectives can be achieved.
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JAFFAR AL HAMDANI
Mr. Hamdani, the Chairman of the Iraqi Federation of Chambers of Commerce, commenced his
address through expressing his desire to continue the building of a productive relationship.
The Federation of Chambers of Commerce represents the goals of strengthening international
relations and enhancing the private sector. In order to achieve the latter, Mr. Hamdani stressed the
need to increase training, in which the greatest number of people were to participate.
Mr. Hamdani also acknowledged the need for platforms to settle international differences.
Conferences, like the IBBC Conferences, are the best places to do so. Additionally, the recent
openings of international arbitration courts in Iraq are equally important platforms to do more of the
same.
It was emphasised that the Iraqi government needs to assemble a strategy that is vital to reformulate
and revitalize Iraq, including the re-establishing of old factories and the opening of new ones. Mr.
Hamdani highlighted the necessity for an international shared vision in order to fully develop the Iraqi
private sector.
In conclusion, Mr. Hamdani stated that there are hundreds of thousands of Iraqi merchants who need
much help in financing, a vital part in the rebuilding of Iraq. More than financial support, Mr.
Hamdani also called for moral support in order to maximize the effectiveness of Iraqi investment.
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Session 1 — Presentations by Iraqi Chambers of Commerce
To commence the first session, Baroness Nicholson invited various heads of Iraqi Chambers of
Commerce to illustrate the current political and economic in their respective regions and communicate
the challenges that they face as well as the positive developments.
The delegate from Dohuk shared the security challenges his region faces, as a result of ISIS however,
noted the positive influence of British business through the newly opened Jaguar / Land Rover
dealership in the city of Dohuk.
In Basra, Mr. Maki Al Sudani spoke to the influence of the approximately one hundred oil and gas
companies that have a presence in the region. He expressed that his Chamber of Commerce strives to
give all those companies the assistance they require and welcomed any British delegation that would
like to visit Basra for future investment opportunities. In addition, Mr. Al Sudani communicated the
potential for investment into the energy and waterworks sectors.
The delegates from Karbala and Najaf both reinforced the important role that tourism plays in the two
regions. Particularly with regards to the latter, the delegate spoke for the need of economic
diversification. He noted companies’ willingness to go forward with British businesses in a
cooperative partnership that will require a bit of investment and management from the British
partners.
The delegate from Babylon noted his region’s eminent position as the cultural centre of Iraq. He
noted the regions significant tourism appeal, prosperous date production industry and strong
agricultural sector. He acknowledged the issue of visas as a substantial obstacle for the people of his
region but expressed great interest in working with British companies.
Kirkuk and Saladin noted the need for housing units, and believed this would be a very attractive
opportunity for foreign investment. Additionally, the delegate from the latter promoted his region’s
numerous factories that could be revitalised and that Saladin is home to the second largest medical
factory in the Arab world.
The delegate from Muthanna cited the numerous investment opportunities his region offers,
particularly in cement production and that three more plants are currently being constructed.
Baroness Nicholson then called upon Dr. Hybaskova to speak to the European stance on Iraqi
development. Dr. Hybaskova affirmed that there is clear evidence there is one Iraq, and that a unified
stance is vital to develop politically and economically. She stressed the need for the business
community to support the Iraqi Prime Minister and his government directly and indirectly to assist the
Prime Minister’s Office in moving the nation forward. Also, Dr. Hybaskova promoted European
investment and re-stabilisation with Iran as vital factors to increase additional foreign investment.
Finally, she noted that education and vocational training are vital to build up the Iraqi labour market.
The Baroness then posed the question to Mr. Chugg, “why do the Foreign Ministries inhibit the
issuing of visas, whereas the Schengen visa can be obtained in a much shorter time? Why is it so
difficult for Britain to issue a similar visa?”
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Mr. Chugg acknowledged that the home office is responsible for the issuing of visas but, at the same
time, he accepted that it is a problem, “we want business to be promoted and this requires people to
travel in both directions.” He noted that the immigration system is much more modernized and
sophisticated than it used to be and stressed that it is vital that all required paperwork is presented.
Otherwise, the application, which is sent to the UK for processing, must be sent back to Iraq and
deemed incomplete. He concluded his point through stating that the FCO will try its hardest to get
visas processed but it is a two-way process.
Finally, the Baroness invited Mr. Uusitalo to comment on regional Iraqi economic development. He
commented that when he left Iraq, in 2009, there was a sense of optimism fuelled by high oil prices,
economic development and abundant job opportunities. Unfortunately, political instability led to
significant missed opportunity. Mr. Uusitalo emphasised that economic development cannot be done
in isolation and that business cannot thrive without security. This Conference is an example of the
business community coming together and he hoped that the political community would do the same to
maximise Iraq’s success.
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Session 2 — Establishment of PM’s Delivery Unit
Amar Shubar (Chairman, Management Partners), Richard Jones (Delivery Associates), John Curtin
(Ernst & Young)
Mr. Shubar began the second session by outlining the intense pressure for reform of the Iraqi
government. The government has undertaken several substantial changes, such as the privatisation of
the electricity sector and government decentralisation. These activities have prompted the need for
project specific ministerial communities and he proceeded to open the panel to discuss the concept of
Delivery Units.
Mr. Jones explained the origins of delivery units. Under the former Blair government, a PM’s delivery
unit was formed in the early 2000’s and drew together a group of roughly twenty people from a
breadth of careers. The job was to provide support to government and various ministries in
implementing key policies. The Prime Minister chose fifteen priorities and the delivery unit provided
excellent platforms for cross-ministerial work and routines in order to monitor and drive progress.
Through the use of the delivery unit, key policy goals were accomplished, such as higher standards of
education and a decrease in crime rates. Mr. Jones’ main point was that delivery units have become a
very attractive proposition to other governments and could be used effectively in Iraq. He cited Brunei
as an example, where a delivery unit is currently being utilised to get the government to diversify
from focusing solely on the oil industry and into other industries.
A PM delivery unit for Iraq would bring government ministers together and help drive a unified force.
Mr. Jones believed that businesses would be more willing to invest with a delivery unit in place. The
unit would require a solid connection to political leadership and really be comprised of talented
people with sound judgment and strong influence. Mr. Jones supported the notion of delivery units
throughout the various levels of government, including the federal, provincial and municipal levels.
He concluded by stating that delivery units would increase transparency and the improvement of
public sectors is an effective way to indirectly fight corruption.
Mr. Curtin communicated that the two key words he associates with doing business in Iraq are
perseverance and patience. He stressed the need for knowledge and relationships with the government
are the key to success. Furthermore, Mr. Curtin emphasised the importance of understanding Iraqi
culture and that the fly-in / fly-out business model means that visa issues need to be addressed.
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Session 3 — Attracting International Investment Dr. Anne Kerr (Chairwoman, Mott MacDonald), Charles Walker (Zaha Hadid Architects), Andreas
Meletiou (Standard Chartered), Jim Brown (KBR), Pete Turner (SKA)
Dr. Kerr commenced the session and addressed some of the general problems international investors
face when looking to invest in Iraq. Firstly, she noted that investors are mainly concerned with return
on investment and the ability to transfer funds in and out of the country. Inconsistent law and lack of
security of property titles are two main concerns for foreign investors. An example she provided in
this regard was that farmers have difficulty ensuring that payments are made on time. Dr. Kerr
stressed the need for the creation of a stable and secure banking system that would minimise the risk
of money laundering activities.
Mr. Walker, an architect working in Iraq since 2009, addressed three main challenges Iraq faces
regarding international investment: access, capacity and standards. With respect to access, Mr. Walker
had comments specific to the Iraqi markets and mentioned a lack of communication. He stated, “it is
not easy travelling to Baghdad, a lot of advance planning for security purposes results in staff who are
hesitant to travel.” Mr. Walker believed a wider use of the English language would help to solve the
latter problem. Capacity is another issue as a lack of international capacity makes it increasingly
difficult to develop complex construction projects. He acknowledged that most talented Iraqis that
could assist with such projects have chosen to leave Iraq and live and work elsewhere. Lastly,
standards have posed a problem. Mr. Walker believed that local standards are considered to be the
norm but projects should be held accountable to a higher, international standard.
Following this address, Mr. Meletiou discussed the banking structure of Iraq. He spoke to the need for
an acceleration in the public service sector, as it would allow banks to perform they best way possible.
An increase in the use of formal banking processes would lessen the use of cash. It was argued that an
increase in transparency through these methods would result in a decrease in corruption. Mr. Meletiou
also encouraged the increase in the use of local currency, as opposed to reliance on United States
Dollars.
State owned banks play a vital role in Iraq’s banking system. Mr. Meletiou argued that the
development of the private banking sector would be hugely beneficial to the government as well as
corporations and citizens. He strongly encouraged the Iraqi government to move from a single
banking relationship to a multi-banking relationship, as it would increase competition and healthy
diversification.
Mobile banking was a central point to Mr. Meletiou’s address and a platform he strongly believed
would benefit the Iraqi people. Mr. Meletiou cited an example of mobile banking use in rural Kenya,
where telecom and banking sectors worked together to develop an infrastructure that could be
accessed by individuals in remote areas that otherwise would not have access to basic retail banking
services. Upon application to Iraq, Mr. Meletiou argued that the large Iraqi “unbanked” population
would hugely benefit from a similar project.
A question from the audience was posed to Mr. Meletiou regarding relevance of Islamic finance to
Iraq. He suggested that while Islamic finance is a growing banking market and one that is obviously
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pertinent to the Arab world, present Iraqi banking needs are so basic that more focus should be on the
retail sector. Islamic finance is an industry more relevant to corporate banking.
Mr. Bowden then shared his views on the problems with attracting international investment. He
believed that the problems faced delivering complex programs and essential services are as consistent
now as they were ten years ago. Security, economic stability, and governance were all issues cited.
Mr. Bowden stressed the importance of a unity of command and that one individual must be in
charge. He shared that in his experience, management by committee rarely delivers effective
outcomes when the pressure is on. Additionally, he emphasised that one should be realistic and focus
on what projects would have the most impact and benefit, not necessarily what is the most attractive
or interesting to a corporation. Finally, he acknowledged that it is essential that international investors
know that things move slightly slower than they would like.
The last point discussed on the panel focused around the fuel industry and ground logistics. Mr.
Turner cited that SKA has made a significant investment in human capital. Specifically, 80% of
employees are Iraqi and hold positions up to and including senior management. He emphasised the
importance of good relationships and SKA’s successful use of relationships and trust in the
workplace. The main challenge faced by SKA is the security situation, as the various checkpoints
around the nation make transportation difficult. He concluded through stating that Iraq is more
complex than it has been but SKA will continue to invest because it finds opportunity in difficulty.
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Session 4 — Oil and Gas Stephen Culshaw (Chairman, Amec Foster Wheeler), Kate Dourian (International Energy Agency),
Mark Wharton (Shell) Mike Wenham (BP), Colin Findlay (Severn Glocon), and David Conneely (SNC
Lavalin)
A substantial decline in crude oil prices over the past year has dried up state revenues and made it
very challenging for the government to meet its targets. The main question posed to the panel was
“why are companies still investing in Iraq?”
Ms. Dourian began by noting that energy efficiency and climate change policies will have an impact
on Iraq, in addition to falling oil prices. Upstream investment is set to fall 20% this year from 2014,
the largest drop in the industry’s history, with the possibility of further declines in 2016. This will
hinder Iraq’s recovery and put worldwide energy markets down. Ms. Dourain acknowledged that the
potential lift of Iranian sanctions would allow Iran to enter the oil market and, if so, it would
overpopulate an already overpopulated market.
The fall in oil prices has provided relief to consumers in importing countries but upstream investment
cuts may lead to market imbalances beyond the current decade. Lower oil prices have slowed the
growth of unconventional oil and further investment curbs may yet impact projects with longer lead
times. This will rebalance the oil market but the adjustment mechanism is rarely a smooth one.
Mr. Weham then addressed how the company is investing in Iraq through the rehabilitation of the
country’s largest oil field. Looking back over the past year, the company has had remarkable
achievements in Iraq. Specifically, producing 1.35 million barrels of oil per day. Additionally, it has
produced 1 billion cubic metres of gas in the past year, its highest production since 1989. Lastly, it
was stated that the low oil price does provide an opportunity to drive deflation into the market for the
benefit of the state.
Mr. Wharton proceeded to praise the Iraqi industry, as it is one of the few areas in the world,
geographically, where upstream, midstream and downstream businesses coincide well. The company
currently employs 5000 people plus several hundred more in the corporate sector. On the whole, the
company believes in a motto of the “three C’s: collaboration, coherence, and consistency. Firstly,
Shell supports a collaborative spirit across the workplace in order to achieve success. Secondly, the
level of coherence, particularly on the government level, needs to be confident to push ahead. Finally,
once that level of coherence is obtained, consistency is key through sticking to principles and enabling
business principles. Shell believes that the Iraqi government and corporations should work together to
accomplish the three C’s in order to maximise Iraq’s success.
Following these presentations, Mr. Findlay explained his organisation’s reasons for investing over
$10 million in southern Iraq. “Severn Glocon is typically risk adverse,” Mr. Findlay stated, “but this
decision was based on long term economic potential.” Also, he stressed the importance of technical
service agreements. Concurrently, SNC Lavalin agreed with the long-term investment approach. Mr.
Conneely said SNC continues to explore the Iraqi market but in the short term must acknowledge the
infrastructure and the need to improve it in order to encourage further development.
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Session 5 — Women in Business in Iraq
Angelique Lecorps (Chairwoman, G4S), Samah Jassam (PhD Student – Portsmouth University),
Christina Slade (Bath Spa University), Zainab Al Ribhawi (EAME Country Manager for Iraq)
For the final session of the first day of the conference, the role of women in Iraqi business was
discussed. Ms. Lecorps led the session and affirmed that the goal is to promote women in business in
Iraq but also, to offer a platform for women to support each other and see how other women have
been successful. It is important to remember that this should be achieved within the large cities in
addition to the more rural areas as well. Along with the more traditional sectors of women in business,
Ms. Lecorps encouraged the involvement of women in less-traditional sectors, such as the energy
industry.
Ms. Jassam is a very strong supporter of women in Iraqi business. She affirmed that women are
legally equal to men and that there is great hope for women in Iraq. Adding to Ms. Lecorp’s earlier
point, the female role in the public and private sectors should be diversified and not limited to just a
few areas of industry. She praised the training programs currently available for women in the areas of
education, healthcare, pharmaceuticals, oil, and tourism.
A significant moment of the day’s events came when Professor Slade of Bath Spa University offered
a PhD Scholarship to an Iraqi female on the topic of “Women in Higher Education.” Professor Slade
noted the importance of female role models for women across the globe, citing Benazir Bhutto as one
of her most influential role models. She strongly encouraged creativity, culture and enterprise in
addition to a sense of global citizenship. Notably, Professor Slade promoted the female role in the
creative industry, praising the role of British women in the arts and technology. She strongly
encouraged the relationship between Britain and Iraq to be strengthened in this regard and witness an
increased involvement of women in this sector.
Finally, Ms. Ribbawi argued for the need to change the idea of Islamic countries and women in
business. She noted the higher proportion of women in the Iraqi population due to years of war
significantly decreasing the male population. However, this ratio is not reflected in government. As an
example, Ms. Ribbawi cited only two female ambassadors and one woman in the executive body of
government. She encouraged that women should be educated on their rights and be more involved in
the political system.
The question and answer period that followed this session was quite active. Firstly, a female delegate
from Kurdistan noted that the women in their society have always supported the men. She proceeded
to state that presently women from the region are fighting against ISIS alongside men. Furthermore,
she provided the statistic that roughly 30% of the individuals who received scholarships to study at
universities were women. In essence, it is important to be optimistic and to educate young men about
human rights and women’s rights. Another delegate commented, “support of a family, particularly
male support, is very important to help empower women.”
To conclude this session, one male delegate commented, “women’s rights must be strengthened, and
an increased presence must be seen in the fields of oil and energy. He praised the role of Iraqi women
and wished them to continue to have more success.
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Tawfik Tabbaa of Eversheds
Mr. Tabbaa began his address affirming Eversheds’ Iraqi presence despite the scourge of ISIL,
bureaucracy and corruption and lower oil prices that have plagued Iraq over the past year. In light of
these problems, “there is much to be positive about, particularly taking a medium to long-term view,”
Mr. Tabbaa added.
It is about more than oil and gas, there is a wealth of opportunity spanning multiple industries. The
key issue for the private sector is obtaining finance. One of the main responsibilities for Eversheds is
to explain where foreign investors have issues and how, hopefully, things can be made better.
Mr. Tabbaa outlined details of the 2015 Iraqi government budget compared to the 2016 budget. The
former, built around $105 billion, input the price of oil at $56 per barrel. He noted that it is currently
trading at roughly $50 per barrel. Therefore, the deficit will be an expected $20-25 billion. Examining
the 2016 budget, Mr. Tabbaa expressed his delight that the government budgeted the price of oil at
$45 per barrel, which he believed to be realistic.
Looking to the legislature, Mr. Tabbaa observed several attractive laws that have been passed since
2004, to aid foreign investors. These laws include banking, company, intellectual property, and
investment. With regards to the latter, Mr. Tabbaa pointed out that there is a continuous effort to make
the Investment Law better. At present, it still has various incentives and guarantees protection for
foreign investors.
The ease of doing business in Iraq is not an ideal scenario. In the 2015 World Bank “Ease of Doing
Business” Report, Iraq was ranked 156 / 189 countries to do business. To increase the ranking, Mr.
Tabbaa believed the investment laws could use more improvement, as he said, “they are generally
good but lack details. They are distorted by complex procedures and administrative requirements.”
Mr. Tabbaa proceeded to outline some of the challenges his firm faces. For example, laws, which
were thought to have been out-dated, are still being used vigorously. Furthermore, there is a large
bureaucracy that is not used to dealing with the private sector and several laws, regulations and
instructions have been introduced without having any regulatory impact assessment.
These legal challenges are coupled with commercial challenges from the clients’ perspective. Some of
the commercial challenges include government procurement, company registration, and bilateral
treaty creation. Firstly, government procurement presents a problem through the issuing of
performance bonds, one-sided contracts that lack expertise, and inconsistent use of new and old law.
Secondly, the registration of companies poses another challenge, as 100% foreign ownership is
allowed but company registration remains a lengthy and arduous process. Lastly, Mr. Tabbaa
suggested that Iraq has few bilateral treaties regarding investment protection and should attempt to
create valuable agreements with countries such as Germany, France and the UK.
Mr. Tabbaa concluded through stating that “Eversheds, as a firm, is very much interest in any
initiative that could be undertaken by the private sector, including the writing of a report to the
government that would outline the issues.”
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Toby Chinn of Control Risks
The security market was the central focus of Mr. Chinn’s address and it was acknowledged that it is
one of the most important bilateral sectors in the British-Iraqi scope. Mr. Chinn stated, “security has
an important role regarding our clients but also in investment itself… companies will only invest once
they have trained the Iraqi counterparts.” Therefore, the central role of Control Risks is to do precisely
that, control risks.
Mr. Chinn affirmed that the current security situation in Iraq is one of the most substantial obstacles
for corporate investment. Investment companies undergo so many security steps in order to comply
with British laws and regulations, especially regarding health and safety. For example, oil companies
have been known to use armored cars and security. “These companies are committed to the conditions
within their contracts and must plan their engagements, accordingly,” Mr. Chinn reiterated.
Additionally, Mr. Chinn acknowledged that corruption is a deterrent like “a malignant cancer present
throughout the world.” Companies welcome the present government’s fighting of corruption in order
to increase transparency. He finished by praising Eversheds for looking at political and economic
situations in order to increase the flow of international business.
Jorge Villa of Iraq Middle Market Development Foundation (IMMDF)
Mr. Villa’s address concerned the small and middle enterprise (SME) lending in Iraq. His Foundation
has dispersed close to $80 million in the past four to five years to fifty-two Iraqi SMEs. As a result,
1627 jobs have been created. The Foundation’s investments have helped to finance the purchase of
local and foreign equipment. For example, a vertical corn dryer was purchased with a $1 million
IMMDF loan in May 2013.
IMMDF requires nothing different from an international bank, in terms of securing a loan. One of the
unique processes used by the IMMDF is loan monitoring. The Foundation monitors the loans on a
monthly basis and a variance analysis of the borrower’s actual financials and objectives is used in the
Credit Proposal including income statements.
An example of a success story is a soft-drink company that received a $5 million loan in 2007 that has
become very successful and quite popular. In the same year, a poultry farm received a loan of the
same amount and has also become quite successful, despite requiring a restructuring of the loan.
The Foundation also supports social activities, such as a kindergarten and two refugee camps. The
IMMDF believes that the solution to the refugee crisis lies in Iraq, not a reliance on other parts of the
world.
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To conclude, Mr. Villa stated that close, strict loan monitoring is essential coupled with sound legal
advice to monitor and enforce the loans.
Panel Session One - Iraqi Chambers of Commerce
This panel session reiterated a number of concerns that the leaders of various Chambers of Commerce
expressed in the Iraqi Chambers session from the previous day. A central focus among the
representatives from Wasit, Najaf, Babylon, and Basrah was diversification. The oil industry should
not be the sole focus for international investors, since there are so many other sectors that require
investment including agriculture, poultry, textiles and tourism. Specifically, the delegate from
Babylon proposed automobile manufacturing, as the region has recently seen success with GMC,
although currently closed, and Volvo. The central message among delegates from all regions was to
diversify foreign investment in order to build infrastructure that will encourage and assist long-term
foreign investment in multiple sectors.
Panel Session Two – The BCC Explained
Mr. Richard Cotton chaired the final panel session, which aimed to provide a further explanation of
the British Chambers of Commerce (BCC). The goal of the BCC is to promote small and intermediate
size businesses in the UK. Previous Iraqi delegates expressed interest in learning more about British
businesses on this scale, and the purpose of this session was to provide more information about how
the BCC can encourage British-Iraqi business.
Also, Business West presented its services to members of the Iraqi delegation. The organisation
represents businesses across the southwest of England. Specifically, 90% of the businesses that
Business West represents have less than ten employees. It sees Iraq as a nation with good potential but
highly risky.
Business West offers a consultancy service that seeks opportunities and then finds companies in the
UK and ensures the deal is executed as smoothly as possible. The organisation also works using a
representation model. This has proved extremely effective in supermarket product packaging in the
Nordic countries, where using in-market experts will do the deal and act as an intermediary.
Mr. Cotton concluded the session delivering the news that the IBBC is currently in the process of
becoming an affiliated chamber of commerce in Iraq, as another resource that will enhance British-
Iraqi economic relations.
IBBC Hope House, 45 Great Peter Street, London, SW1P 3LT [email protected]
Iraq Britain Business Council, a company registered in England and Wales with company number 06929280
Registered as an NGO in Iraq with registration number 2D76104