By Murtada Taleb.
It was designed to attract investors to Iraq and although things are getting better in Basra’s duty-free zone, there are still many obstacles for foreign investors there – some of which come straight from the Prime Minister’s office.
The free zone near the southern Iraqi city of Basra has been around for some time now – it was first created in 1999 when former Iraqi leader Saddam Hussein was still in power. But it is only recently that it seems to finally be attracting the right kind of attention.
The zone, around one million square meters or one square kilometre large, offers tax exemptions on imports, dedicated transportation – it is right by the Khor Al Zubair port area – and flexible legislation. It’s attractions for foreign and Arab investors are evident.
But due to the security and economic situation in Iraq over the past decade, it hasn’t had much success at drawing new investors to the country.
The free zone has had three phases of development, explains Mohammed Radi, general manager of the free zone. Before 2003, small local investors came to the area. After 2003, and the US-led invasion that toppled Saddam Hussein’s government, security conditions deteriorated and the free zone wasn’t particularly attractive to any investors until as late as 2008. However after 2009, things started to look up again as Basra became one of Iraq’s safer and more prosperous areas, due, partially, to the amount of oil being produced in the region; over half of Iraq’s oil comes from this area.
“The free zone has started to attract a lot of good investments,” Radi noted. “Especially after the recent oil licensing rounds.”