It also presents significant legal, planning and public financial management challenges for the government in Baghdad and in the KRG. These need to be addressed fast. First and foremost is the resolution of Erbil and Baghdad’s disagreement over revenue-sharing and hydrocarbons. Progress on this and related laws in the Council of Ministers would give a significant fillip to investors. Passing a package of laws after proper and sensible consultation would send a powerful message of readiness, unity and purpose.
The planned increase in oil and gas production would benefit from a benign trajectory in security. It is still the first topic raised by anyone who wants to do business in Iraq. The use of deadly force in attacks against civilians and the military has declined massively since 2007. But investors rightly worry whether the withdrawal of US troops at the end of this year could lead to an upsurge in violence, reversing the real and tangible gains of recent years. While no one can predict with any certainty what will happen in the short-term, there are some grounds for optimism. The Iraqi security forces have greater capacity now than for many years and will continue to get stronger, and significant sums are being invested in defence and security.
And Iraqi Kurdistan remains free of the violence that exists elsewhere in Iraq. While there has been no terrorist incident here for some time there is no room for complacency. Consequently the KRG has worked hard to provide the security and stability so important for its people, visitors and investors alike, which it prioritises as a key mission for its security forces.
Of course big regional challenges remain. We are especially concerned about the intentions of Iran – a country which is not currently a force for regional stability. Nuclear proliferation, if it takes hold in the region, as it might if Iran stays on its present course, would be enormously damaging.