The oil will have to pay for this infrastrucutre - dams, railways, bridges, airports, hotels, and millions of homes (200,000 units each year for a decade), plus roads, sewers and services to support them. It amounts to a lot of work that should last for years.
Even if an arbitration award is obtained, there remains the question of enforcement
The risks?
Security is an obvious risk, as we are constantly reminded by the press headlines. Corruption is another. Iraq was ranked 169 out of 176 countries in the Transparency International 2012 Corruption Perceptions Index.
And Iraq was ranked 165 out of 185 in the World Bank 2013 ease of doing business tables. Time, energy and patience are required to make progress through the bureaucracy.
And the legal framework?
Investment is governed by Investment Law 13 of 2006 as amended by law No. 2 of 2010 and foreigners can take a 100% stake in an Iraq company.
For those used to doing business in the Middle East, the law in Iraq will look familiar. The Iraq Civil Code, influenced, like other Arab codes, by the Egyptian Civil Code, takes precedence over, for instance, Shari’a. Iraq cannot compete, however, with the more advanced approach of Dubai and its International Financial Centre, to dispute resolution.
Foreign arbitration is the usual contract dispute resolution route that sidesteps any concerns about the speed, expertise or impartiality of local courts and the Iraqi courts have recently adopted a welcome hands-off approach to foreign arbitrations.
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