The development of the energy sector will require huge investment in infrastructure – power generation, pipelines, pumping stations, storage, terminals, refineries, roads – as well as in people, to equip them with new skills. The IOCs can help with this. They are increasing production levels fast. They have a major interest in reinvesting in Iraq and are doing so. They are creating jobs for Iraqis. But the government has a huge role too. The revenues it receives will enable it through public investment and competitive and transparent tendering to spread prosperity across the whole of Iraq, not just in Baghdad, Basra or Erbil, though all of these cities will be key economic and social hubs of the future.
Ultimately, business will go where conditions are best. So I hope the Government in Baghdad and the KRG will continue to encourage foreign investment. The private sector plays a vital role driving innovation and dynamic and beneficial social change, in creating productive jobs and broadening prosperity.
Economic growth, if shared equitably, should lead to greater political stability as all Iraqis see their stake in the new Iraq becoming more significant. I am struck by how many Iraqis of all creeds, ethnicities and orientation feel that being Iraqi rather than Syrian, or Jordanian or Iranian is an integral part of their sense of themselves. This country belongs to them all. The more it rewards them for this loyalty, the more dynamic and productive will be their response and the more stable the country.
Much depends on decisions that will be taken by the government over the next four years, some sooner. Increasing stability and confidence will bring changing relations with Iraq’s neighbours. Through access to the Gulf, Iraq has distinctive access to India, China and beyond. Energy politics suggest that Iraq’s economic and political importance will grow faster than any other Middle Eastern state in the next decade. This means that Iraq will need to choose how it interacts with that wider world. A stable, well governed Iraq prepared to engage through the Gulf with South Asia and beyond and through Turkey with Central Asia and Europe could be a key part of a new global economic architecture. That is in all our interests.
(Source: UK Foreign and Commonwealth Office)