By David Rosenberg, for The Media Line. Reproduced with permission by Iraq Business News.
It was just another day in Iraq on July 15.
In the city of Kerbaba; two car bombs killed a total of seven people and wounded 19. An American solider was killed in Baghdad while in another part of the capital an Iraqi policeman was injured by a sticky bomb placed under a vehicle. More bombs wounded soldiers in Samarra and in Mosul.
But July 15 also saw the grand re-opening Baghdad’s renowned Al-Rasheed Hotel after a $65 million renovation. Britain’s Harlow International undertook the construction work while Holland’s Kempinski Hotel group will manage it.
“The rebuilding of infrastructure, including palaces and airports, is evidence of the ability of Iraqis to achieve what they want,” Foreign Minister Hoshyar Zebari said at the ribbon-cutting ceremony.
Even as Iraq suffers an upsurge of violence – June alone saw 155 civilians killed in attacks, the most since January – foreign investors are flocking to the country. Dunia Frontier Consultants, a Washington DC-based consulting firm, estimates that foreigners were responsible for $45.6 billion in investments, service contracts and other business in Iraq in the first half of the year. That was double the amount the same time in 2010.
Where others see carnage, chaos and corruption, investors see a potentially oil-rich economy whose population of some 30 million is desperate for housing, roads, consumer products and services.
“What you have is a country that produces oil, which makes it very attractive for the hydrocarbon industry to invest there. It’s a country with a very large population,” Daniel Broby, chief investment officer at London’s Silk Invest, told The Media Line. “The middle class suffered a lot of problems but they are educated and there is a lot of home ownership, so banking and telecommunications industries are very attractive for foreign investment.”
Driven by high energy prices, Iraq’s economy will grow 12.5% this year, according to the International Monetary Fund. Iraq’s Oil Ministry said in June alone petroleum brought in $7.17 billion as exports averaged 2.273 million barrels a day at an average price of more than $105 a barrel.
With the government’s coffers swelling, Planning Minister Ali Al-Shukri told Reuters on Monday Iraq is looking to raise its 2012 investment budget by 50% to as much as 60 trillion Iraqi dinars ($51 billion).