FDI and Legal Compliance in Iraq’s Oil Industry

By Shwan Rahman.

The Impact of Foreign Direct Investment on Legal Compliance in the Iraqi Oil and Gas Industry

This study seeks to ascertain the causal link between the inflow of Foreign Direct Investment (FDI) and compliance with international law standards.

The reasons why various Iraqi governments since 1958 have been very reluctant to open the economy to FDI are then examined in order to determine whether the modification of the investment laws governing the oil and gas sector by the Iraqi Governing Council or interim government under the guidance of the coalition forces was motivated by the desire to comply with international standards and attract FDI.

It concludes that FDI is not essential for the economic development of periphery countries where it is held to entail foreign investors from core countries exploiting non-renewable resources in periphery countries. Thus, the investment laws of 2003 and 2006 were not enacted by the Iraqi government to attract FDI but because it was compelled to do so by the Coalition Provincial Authority (CPA).

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