However after 2003, the interim US-led government of Iraq, the Coalition Provisional Authority which was headed by American diplomat Paul Bremer, made some fairly radical changes to Iraqi economic laws. Bremer made changes to the existing companies’ law in Iraq - specifically Company Law No. 21 of 1997 – because, as he wrote at the time, his role involved “recognizing that some of the rules concerning company formation and investment under the prior regime no longer serve a relevant social or economic purpose, and that such rules hinder economic growth.”
Bremers’ amendments were supposed to liberalize the economy but, like some of the other fairly ill advised laws the American diplomat instituted, they had unintended consequences. Within a fairly short period, there were 925 construction companies registered in Basra and another 5,000 waiting for registration. The amendments allowed for the creation of companies that only existed on paper as well as increased the number of speculators.
The amendments allowed any Iraqi with a minimum of IQD1 million (around US$850) to register a company at federal level. The state of a firm’s financial assets is not among the conditions of registration and according to local legal experts, this is the aspect that is being regularly exploited.
“It is true that the law does not allow a company to implement projects with costs three times more than its capital. However, any company can temporarily increase its capital by utilising a temporary deposit from one of the local banks,” al-Aberseem told NIQASH. “Using the latter, the bank deposits the needed amount, charges a commission and then withdraws it from the company’s account later.”
“It’s trick that doesn’t cost much,” al-Aberseem explained. “And the company can do business even if it doesn’t have the needed capital or assets.”
Shafaq News / The municipality of Basra revealed on Monday, signing investment contracts between the municipality and investment companies to build apartments and residential units in Basra, indicating that the contracts oblige the conducting parties to plant a green belt of trees around those complexes.
The director of Basra municipality, Abdul Zahra Mohammed Sewede said in an interview with "Shafaq News", that “two investment contracts have been signed between al-Saqer al-Jareh company for real estate investments and investor , Retha Saleh where the first contract includes building 1822 housing units that include 1468 apartments distributed on 84 different residential building. "
He pointed out that " adding a clause to the contract and that the investor must plant green belt separating the two pieces in a duration of implementation of the two projects up to 5 years from the date of delivering the property."
Basra is witnessing since the mid-nineties a housing crisis that has worsened greatly in the past few years as a result of high population growth and escalating immigration from other southern provinces, most notably the repercussions of house prices crisis and residential plots dramatically.
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