First Published: 2003-09-23

 
Iraq's economic reform plan raises nationalist fears
 

Iraqis fear hasty package of reforms will lead to foreign domination over economic decision-making in Iraq.

 

Middle East Online

By Rouba Kabbara - BAGHDAD

The economy is being Americanised, said one Iraqi expert

A sweeping package of reforms to open Iraq to foreign investment announced by the new government has raised fears in Baghdad of foreign domination of the national economy, including the coveted oil industry.

"The measures which have been announced will lead to foreign domination over economic decision-making and largely sign away the independence" of Iraq, said Ridha al-Qoreishi, a financial and monetary expert and academic.

The package, which aims to rebuild an economy devastated by years of sanctions, wars and tyranny, was unveiled by interim finance minister Kamel al-Kilani on Sunday in Dubai.

It covers Iraq's foreign direct investment code, the banking sector and tax regime and would enable 100-percent foreign ownership in all fields, except oil.

"Measures of such scope should come from an elected national government," Qoreishi said, urging the new US-installed authorities "not to accept the foreign diktat and to act in the national interest."

He was sceptical that Iraq's vast oil wealth - the second biggest proven reserves in the world after Saudi Arabia - could be kept out of the equation for long.

"This is a prelude to including oil ... the cornerstone of the national economy," Qoreishi charged.

"The United States will have control of all the Arab oil in the Gulf, or 60 percent of the crude in the world, which reinforces their hold over the world economy."

Qoreishi agreed that "the Iraqi economy needs to be reformed" after decades of dirigisme under the Baath party of former president Saddam Hussein.

However he alleged the US administration in Iraq was seeking to make structural changes which would be in its own interests "and not those of the country."

"The economy is being Americanised," said another Iraqi expert, who asked not to be named.

Under the reforms, foreign companies will be able to buy Iraqi firms outright, forge joint ventures with Iraqi partners and open branches in the country.

Foreign banks will be allowed to enter Iraq, with a total of six foreign banks allowed to buy up to 100 percent of local banks within the next five years.

The first two foreign banks in Iraq will benefit from a fast-track entry process, while after five years there will be no limits on foreign bank entry into the country, the minister's statement said.

The reforms also hand the Iraqi Central Bank full legal and operational autonomy.

"These are wild measures and they will destroy Iraqi operators," warned businessman Ali al-Dabbagh.

"The Iraqi businessman will be at the mercy of big (foreign) companies," said Dabbagh, co-owner of a family firm called Tigris Building Contractors.

"Foreign investment should be limited to a maximum 49 percent stake in any project," he said, voicing opposition to those who advocate quick rebuilding in the aftermath of the fall of Saddam Hussein in Aprim.

"Following the removal of the regime of Saddam Hussein, what use is such haste?" he asked. "Let rebuilding take five years rather than two so long as we don't sell our country."

Dabbagh said such wide-ranging reforms "should be worked out in line with the constitution and not a decision by a minister."

However, Ali al-Obeidi, dean of the economy faculty at Baghdad's Al-Mustansariyah university, defended the reform plan.

"The situation must change whatever the cost," he said. "Opening up is always in our interest."

He stressed nonetheless "the need to keep oil in the hands of the public sector".

Economists believe that Iraq, for all its unexploited oil riches, still faces a daunting task in rebuilding its industrial and transportation infrastructure ruined by decades of war, neglect and UN sanctions.

Kilani said his government hoped to win financial commitments of around 70 billion dollars for reconstruction from donors at a key aid conference in Madrid next month.

 

UN Security Council warns against holding Iraqi Kurd vote

Barzani delays Kurdish independence vote announcement

Iran defies US, tests missile

Yemen leader promises UN to open entire country to aid

Saudi Arabia marks national day with fireworks, concerts

Turkey warns of 'security' steps in response to Iraqi Kurd vote

Syria's war off the radar at UN assembly

For many Iraqis, tradition trumps police

Darfur clashes kill 3 as Bashir urges reconciliation

Saudi cleric banned for saying women have ‘quarter’ brain

Veteran Syrian activist, daughter assassinated in Istanbul

Tunisia drops forced anal exams for homosexuality

Bomb used in Saudi-led strike on Yemen children US-made

Syria Kurds vote to cement federal push

Police charge teenager over London Underground attack

Nigerian official to meet Turkish counterpart over illegal guns

Thousands feared trapped in Raqa as IS mounts last stand

Iraqi forces achieve first step in new offensive on IS

Migrant boat sinks off Turkish Black Sea coast leaving four dead, 20 missing

Trump praises 'friend' Erdogan

Rouhani vows Iran will boost missiles despite US criticism

Russia clashes with EU over Syria

UN sets up probe of IS war crimes in Iraq

US, Iranian top diplomats confront each other for first time

Air strikes kill 22 civilians in northwest Syria in 48 hours

Iranian supreme leader lashes out at Trump UN speech

Thousands of Huthi supporters mark 3 years since Sanaa takeover

Iraq attacks all remaining IS territory at once

Moscow accuses US of hitting Syrian regime forces

Turkey jails lawyers representing hunger striking teachers

Turkey, Iran and Iraq make joint threat against Kurd vote

Syrian Kurds to hold first local elections in federal push

Qatari expats lauded as statesmen by Arab critics

Shipwreck off Libyan coast leaves over 100 migrants missing

Will Turkey’s opposition to Kurdish state translate into action?

US ups the ante on Iraq Kurds

Macron: Iran nuclear deal no longer enough

Trump’s mind made up on Iran but refuses to divulge

Scores of Iraqis missing during war against ISIS

Netanyahu rejects calls for mixed gender worship at Western Wall

Russia accuses US of missile treaty breach

Iran TV translator mocked for watering down Trump speech

Saudi Arabia hopes Kurdish referendum will not take place

Saudi invites women to sports stadium for first time

Saudi set to create $2.7 billion investment company