Ma­jor­ity of 2013 in­vest­ment bud­get pledged to on­go­ing projects

The Kurdish Globe - - NATIONAL -

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.”

In short

- 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.

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