Investment in Erbil increases by eight times in one year
More than 4 billion allocated for investment in 2012
Over the course of last year, a total of 56 investment projects were implemented in Erbil on the government budget, totaling US$ 4.25 billion. This data is available at the Governorate of Erbil.
The budget for investment projects was as small as half a billion dollars just a year before in 2011.
However, according economist Abdulwahid Taha, this drastic boost in the amount of investment in the province is not an indication of a real improvement. Taha is more interested in the way the capital is invested and the quality of the projects.
“If investment is aimed at creating job opportunities and improving industry and production, it would leave significant impact on the economic growth of the country,” explained Taha.
Although investment has been made across many sectors in 2012, including housing, arts, education, transportation, tourism, industrial, health and trade, the former had the lion share.
A sum of 20 residential housing projects with a budget of US$ 3.6 billion covers the overwhelming majority of investment activities in the province during the last year. Second place is taken by the industrial sector with a total of more than USD 500 million spent on 11 projects. This is followed by the tourism industry with its 12 projects constituting a quarter of billion dollar investment.
The local economist believes that each sector has its significance and priority; however, those focusing on production are more effective in promoting economic development.
Despite the fact that the housing sector has created a significant number of jobs, Taha argues these projects only have temporary developmental impact on the province.
The agriculture sector, that according to many economists is the key to the economic development of the region, has a minor share in this huge investment budget with a US$ 375 thousand project during the whole year.
Statistics of the governorate show that local companies had 40% share in the investment activities in 2011, while this rate reached 85% the following year. In 2011, another 40% of investment was shared by joint ventures between local and foreign companies, while in 2012 this rate was zero and the remaining 15% was purely foreign companies.
This is a positive move according to economists, due to the argument that the more locals that are involved with economic activities, the more capital and profits are retained locally and the less money will filter out of the country.
The total area of lands allocated for all the investment projects in Erbil in 2012 was 1250 hectares, 1000 of which has been occupied by housing projects, while the smallest area belongs to educational projects with only 0.375 hectares.