Majority of 2013 investment budget pledged to ongoing projects
As per a report by the Ministry of Planning of the Kurdistan Regional Government (KRG) concerning the region’s budget of 2013, a total budget of IQD 65.5 billion (approximately US$ 54.5 million) has been allocated for completing more than 100 ongoing investment projects left from previous years.
This comes at a time when only 60 new projects have been proposed for this year and the entire budget for all these projects is only IQD 21.45 billion (approximately US$ 18 million).
According to a comparative study of the 2013 budget of the region, a total of 40 investment projects with a collective budget of approximately US$ 3.5 billion are implemented by foreign companies, i.e. counted purely as direct foreign investment, which accounts for a 14% of the total investment in the year. The top contributing foreign countries are Lebanon, Turkey, Egypt, United Kingdom (UK), United Arab Emirates (UAE), United States of America (USA), New Zealand, Germany, Sweden, France and Russia respectively.
Joint local-foreign investment ventures, however, contribute as little as 4% of the total direct investment of 2013 in the Kurdistan Region with a total investment capital of less than US$ 1.4 billion. Shwan Ahmed, member of the Kurdistan Region’s Parliament on the majority Kurdistani Bloc, argues that the inflow of all this direct investment into the region has contributed to the strengthening of the region’s political and economic foothold in the international arena. MP Ahmed believes that direct foreign investment is the starting point for the formation of foreign trust in the Kurdistan Region and the inflow of foreign interests into the new, yet fast growing economy.
The Kurdistani Blob par- liament member criticized the investment law for granting excessive facilitations in favor of foreign investors, which although was vital for attracting direct foreign investment at the beginning, should now be amended to benefit local investors instead.
However, figures seem to prove the opposite and indicate that despite MP Ahmed’s comments, the law has attracted more locals as compared to foreigners.
Local investors have invested roughly US$ 20 billion in more than 400 projects all over the region. This accounts for 82% of the total investment activities in Kurdistan.
Investment and housing
The housing sector alone has 166 investment projects with a total investment of more than US$ 13.6 billion.
The entire number of residential units covered under these 166 projects is more than 150 thousand units, approximately 21 thousand of which benefit from the Investment Board’s Housing Fund.
According to statistics available at the Council of Ministers of the KRG and the Board of Investment, only 31 projects of the housing projects have been completed.
The total investment amount of the completed projects is US$1.5 billion. This investment has resulted in a total number of 27,570 completed residential units.
Investment and employment
Parliament Member Qadir Hassan, member of the Reconstruction and Housing Committee of the Parliament, stated that in- vestment activities in the region have created approximately 90 thousand job opportunities.
The Ministerial Council report on the 2013 budget estimated this number based on a number of assumptions. One assumption is that for the construction of 1000 residential unit over the period of 500 days, a total of 600 workers are required. This is based on the assumption that the total working hours per day is 8 hours. Based on these, all the housing projects would create 90 thousand job opportunities.
This is only for the housing projects, while the other investment projects create tens of thousands of other permanent jobs throughout the region.
Investment and industrial sector
The same report of the ministerial council concerning this year’s budget states that there are 105 industrial projects within the list of investment projects. The total investment in this sector is approximately US$ 3.8 billion, amounting to 15% of all the investment activities in Kurdistan. MP Ahmed explained to the Kurdish Globe that 94% of all the investment in the industrial sector is performed by locals. “The 2013’s budget draft emphasizes on the continuation of such projects,” MP Ahmed told the Globe. “The types of these projects are based on the current demands and requirements of the Region’s market.”
- Investment capital in 2013 has reached US$ 6.3 billion, accounting for 26% of the entire investment in the region
- Investment capital of the completed projects is US$ 4.6 billion, accounting for 17% of the entire investment in the region
- Board of Investment has canceled 37 investment projects with a capital of more than US$ 10 billion during its 7-year lifetime.
- Most of the investment capital is in Erbil with a share of 61%, while Suleimaniya and Duhok have 24% and 14% share respectively.
- Most of investment capital has gone to the housing sector with a share of 56%, while other sectors such as industrial, tourism, agriculture and health have shares equal to 16%, 8%, 1.1% and 1.55% respectively.
- Investment has created some 100 thousand job opportunities all over the region.
Members of Kurdistan Parliament attend a session in this file photo of December 7, 2011.