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By Dr Amer K. Hirmis.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Private sector investment in Iraq -  

What strategy for the next Prime Minister?

Iraq is in turmoil.  The protests of the Iraqi youth, which started on October 1st 2019, are calling for the end of corruption, inequality in income distribution, high unemployment and the current (ethno-sectarian) political system and outside interference. They are also calling for a better life and, metaphorically, for their ‘own country’ (watan).

The protests have so far claimed the resignation of Adel Abdul-Mahdi, the outgoing prime minister. The appointment of a new prime minister is imminent. However, it is not certain whether president, Barham Salih, or, indeed, the current parliament itself will remain in place for a long time. The system they are part of has failed.

Politics aside, this situation compounds an already unfavourable environment for doing business in Iraq, as strongly indicated in a recent World Bank report (Oct. 2019). Political instability, uncertainty and indecision provide no comfort for the private investor.

There are, however, a number of reasons why the next prime minister should be bold and determined to make fundamental changes to encourage private sector investment. There is a need to ameliorate the severe structural problems in Iraqi economy to lessen its dependence on oil exports.  The enormous challenges they face include high youth unemployment (at ca.  25 percent), young population (60 percent under 30 years of age) and growing at around 3 percent pa., over 700,000 people entering the labour market each year, hundreds of thousands of senior schools and university graduates, to mention a few. They must act fast, deep and wide. None of these challenges is easy! The new prime minister must be willing to make economic development in the face of adversities. New strategies are a must, reversing old ways of doing things.

This brief note provides a few suggestions relating to what the next prime should do to induce (domestic and foreign) private investment in the economy.

First though history. The graph below shows the dominance of public sector investment (gross fixed capital formation) over the last 50 years. The decline in private investment intensified following the 1964 nationalisation of major private sector concerns, in industry, banking and commerce.

Private sector's share of non-oil GDP declined from 87.3 percent in 1950 to 62.5 percent in 2010 (Hirmis, A.K. 2018a: 57). It was 61.8 percent in 2017 (cosit.gov.iq/n. accounts/2018, p.10).

Structure and ownership

The private sector’s role in the economy has been relegated for nearly 60 years now. Its previously wide-ranging economic activities have now been confined to mainly in retail and trade, construction, transport and ICT (http://cosit.gov.iq/AAS2017...). Crafts and light industry are the province of the private sector.

The majority of businesses are owned by sole proprietors, with the rest being largely family partnerships: the country has few large, multi-industry conglomerates. However, large private businesses are emerging in ICT, particularly mobile communications, in technical services for the oil and gas sector, and in manufacturing. Productivity in the private sector varies: Iraqi private firms perform better in this regard than others in the MENA region in textiles and garments, chemicals, pharmaceuticals, non-metals and equipment; by contrast, food processing and electronics have a relatively low level of productivity (WB 2017; WB 2019; and RoI, 2014: 41, apud Idris, I. 2018).

Skills and education  

As Christine van den Toornhas (2019) has remarked a key first step “will be education reform to prepare young Iraqis for private sector employment…It is clear that the issue is not a lack of demand...a lack of training in basic business skills such as finance and accounting, and a lack of core professional abilities, from critical thinking, research and report writing to being able to work with common software programs...This points to the urgent need to completely overhaul the public education system, including modernizing the curriculum…(short-term solutions include)… a nationwide series of accredited, specialized, one- or two-year programs that focus on developing language, business and professional competencies” Back in 2003, Nancy Birdsall (2003: 61) had observed that “Development and democracy require a fast uptake of Iraqis, including girls and women, into secondary school. They require replacing a school system focused on doctrinal propaganda with a system responsive to new demands for marketable skills.”

The wider issues

Second, the wider issues facing any future Iraqi prime minister in relation to inducing private sector investment go beyond industry structure, ownership, skills and education, noted above. The next prime minister should have a robust and realistic vision for Iraq’s economy, and its characterisation. They should decide for example whether they wish to build a capitalist, market, economy, where the private sector plays a key role whilst government plays an enabling role for wealth and jobs creation, especially in the productive sectors, like manufacturing and agriculture? On this point government has dithered since 2003. Now there is an opportunity to decide on the character of the Iraqi economy going forward.    

The prime minister and his advisors should, critically, have clear views of the dynamics of private sector performance; the business environment needed for investment to take place, and for firms to operate successfully. Private investment takes place on a very simple and familiar premise: the anticipated reward is worth taking the risk – i.e. reward vs. risk.

On the investment side, the World Bank’s October 2019 report on ‘Doing Business 2020 – Iraq’ clearly shows why both the domestic and foreign private investors are weary and reticent. Iraq fails on all the measured indicators used to assess the business environment – the ease of doing business. Iraq currently does not provide a favourable business environment. These indicators include ‘getting electricity’, registering property, obtaining credit, enforcing contracts and, inter alia, resolving insolvency. Iraq came 172nd out of 190 countries, very close to the bottom. In short, the next prime minister, and his advisors, must rise to an enormous challenge. And, this is one of the yardsticks for judging the success or failure of the next prime minister’s administration.

On the side of operation and performance, the latter, typically, depends essentially on eight factors both internal and external to the firm, as shown in the Figure below.

Economic history of market economies shows that growth is generated mainly by the private sector; the government plays an enabling role, through its economic policies, regulation, support for innovation and trade, and ensuring political stability within a democratic framework. Government also subsidies and regulates education, health services and physical infrastructure. However, regardless of the stage of economic development, a number of factors come together to influence both private investment level/structure and the performance of the firms, as indicated above.

Firms also need to consider in detail their profit and loss accounts – in the process of making profits (if they do), firms typically make allowances for wages, interest-bearing loans, or equity raised privately or from commercial/state banks. In addition, taxation, dividends, retained earnings, are also considered. Decisions on these matters constitute part of the firm’s behaviour, and could affect its future direction – e.g. expansion, diversification, or even closure. In the case of Iraq, there is also a consensus amongst observers that tackling corruption, bureaucracy and doing without an ethno-sectarian system of government is critical for economic development. Corruption, bureaucracy and cronyism deny many qualified potential employees access to jobs they deserve to have. Security and political stability are also a must for sustained private investment.

In other words, a large number of factors need to be taken into account in balancing the rewards versus the risks at the firm level. The new Iraqi government must account for this.

Finally, at the strategic (macro) level, the new prime minister has at least three options to stimulate private sector investment, accounting for the eight factors noted in the Figure above.

Option one is to introduce a radical and swift reform concerning doing business in Iraq, creating a conducive environment to induce private investment, by removing constraints facing it. The new prime minister would be well-advised to take a leaf from the World Bank’s recommendations for doing business in Iraq. They should also take a leaf from the government’s own ‘Private Sector Development Strategy 2014-2030’ which recommends amending current laws and regulations governing the private sector which impede the sector’s growth. These include Investment Law 13 of 2006; Company Law 21of 1997; Industrial Development Law 164 of 1964; Implementation of large projects Law 157 of 1973 and the Economic Establishment Law 98 of 1964). On the other hand, the private sector investors should observe the rule of law, especially the Labour Law (37) 2015.

The new prime minister should also seriously consult with Iraqi ‘Chambers of Commerce’ and ‘Confederations of Industry’ to develop an awareness of their concerns, aspirations and the dynamics of their performance.

Option two is to start with restructuring and rejuvenating the ‘State-owned enterprises’ (SOEs), to improve their productivity, keeping in mind the socio-political impacts this option might have. The SOEs, most of which are dysfunctional and inefficient assume a drain on government’s budget due to underemployment, redundancy and maladministration. The SOEs have also assumed control over the sectors concerned and in effect crowded-out most non-oil private firms (WB, 2017). The new prime minister could introduce a form of partnership with the (domestic or foreign) private sector to rejuvenate the SOEs, based on, say, 30-40 years lease, profit-sharing, joint operation, ensuring continuous professional development for Iraqi workers and continuous research and development(R&D). When in operation, major ventures should be linked with Iraqi/foreign universities, to encourage innovation. Such partnership arrangements do not have to take the form of BOT (Build-Operate-Transfer) or BOOT (Build-Own-Operate-Transfer) business models. A new model could be struck, having the advantages of minimizing public cost for investment, reducing public debt, allowing for innovation, improving productivity (especially via FDI – Foreign Direct Investment), and, improve good governance, transparency etc. These arrangements could be applied to the manufacturing, agriculture and physical infrastructure of the economy, to start with.

Option three is to widen the remit of the proposed ‘Construction Council’ which the current/new parliament will consider in the form of a ‘Construction Council Bill.’ This was forwarded by cabinet to parliament on September 17, 2019 (https://gds.gov.iq/ar/cabinet-approves-the-draft-construction-council-bill/). For the Bill to induce private investment its current objectives and mechanisms need fundamental review and amendments to widen its remit so that SMEs could, for example, gain access to finance. Also, the Bill must not become another mechanism to further corruption and money laundering. It must ensure that Council works on strictly professional basis, avoiding the politicisation of its remit/work. Critically, the new ‘Construction Council’ must be regulated by, say, a new independent ‘Office for Economic Development Responsibility’ (OEDR) ensuring that Council performs and delivers major/SME projects efficiently and effectively. This means that the operator must not be the regulator, which is the case in many Iraqi institutions at present. Otherwise, the seeds of corruption will be easily sown (http://iraqieconomists.net/en/2019/10/10/the-construction-council-bill-2019-a-critique-by-dr-amer-k-hirmis/). On this basis, the new prime minister could make a real difference and amend the current broken system of doing business in Iraq.

Of course the above three options are inextricably linked, indeed they could be implemented in parallel.

In all these options, education and economic development must be strongly linked, as noted above. University and vocational training graduates need to end up in jobs created by expanding productive and service sectors, taking advantage of the ‘digital revolution.’ In short, there must be close link between education (curricula) and the skills needs in the labour market. All girls and boys should have access to education to advanced level (up 16-18 of age), so that they would make informed decisions for themselves, in life and in participating in the labour market (Hirmis, A.K. 2018b). This is especially important at the micro-firm-level, ensuring the skills required are provided.

In summary

The new prime minister will be faced with many challenges, noted above, and none is easy!

Stimulating private sector investment is one area where they can turn these challenges into opportunities. The new prime minister will need to muster great wisdom and determination to rise to these challenges, and assist in wealth and jobs creation. Learning from Iraq’s own history and also from foreign experience in economic growth, is always rewarding. The new prime minister should seek well-reasoned, workable advice and apply it in the Iraqi context. This is one way of enhancing state craft. Iraqis will be watching the new prime minister very closely, and will demand results!

END

Key References

Birdsall, N. (2003) The Real Challenge for Iraqi Development (in The International Economy, Fall 2003: 58-61)

Christine van den Toornhas (2019) The Answer To Iraq’s Problems Is (Still) Education ((https://www.niqash.org/en/articles/society/6013/The-Answer-To-Iraq’s-Problems-Is-(Still)-Education.htm – October 31, 2019, accessed, Nov.15, 2019)

Hirmis, Amer K. (2018a) The Economics of Iraq – ancient past to distant future (Grosvenor House Publishing)

Hirmis, Amer K. (2018b) Iraqi Women’s Contribution to the Iraqi Economy – An impressionistic view (http://iraqieconomists.net/en/2019/04/08/iraqi-womens-contribution-iraqi-economy-impressionistic-view-amer-k-hirmis-phd/).

Idris, I. (2018) Inclusive and sustained growth in Iraq (K4D Helpdesk Report. Brighton, UK: Institute of Development Studies (posted at: https://assets.publishing.service.gov.uk/media/5b6d747440f0b640b095e76f/Inclusive_and_sustained_growth_in_Iraq.pdf , accessed on Dec. 4, 2019).

RoI (2014) Private Sector Development Strategy 2014-2030 Republic of Iraq (http://iraqieconomists.net/en/wp-content/uploads/sites/7/2014/09/Private-Sector-DevelopmentStrategy-2014-2030.pdf

World Bank (WB) (2012). Private Sector Development in Iraq: An Investment Climate Reform Agenda (MENA Quick Notes Series. Washington, D.C.: World Bank Group. https://openknowledge.worldbank.org/bitstream/handle/10986/20577/NonAsciiFileName0.pdf?sequence=1&isAllowed=y)

WB (2017) Iraq - Systematic Country Diagnostic (English). Washington, D.C.: World Bank Group. http://documents.worldbank.org/curated/en/542811487277729890/Iraq-Systematic-Country-Diagnostic

WB (2019) Doing Business 2020 – Iraq (https://www.iraq-businessnews.com/2019/11/25/doing-business-2020-iraq-report-a-critique/).

Please click here to download Dr Hirmis’ full report in pdf format.

Dr Amer K. Hirmis is Principal at UK-based consultancy CBS Ltd. (2008-present). In October 2009, Amer began a 20-months assignment as Senior Development Planning Advisor to the Ministry of Planning in Iraq (funded under the DANIDA programme for ‘peace and reconstruction’ in Iraq). The posts Amer has assumed include Chief Economist and Head of Policy at the London Chamber of Commerce and Industry (1992-5), Economic Advisor to UK South West Regional Development Agency (1996-8) and Associate Director and then Head of Consulting and Research (Middle East) at the global firm DTZ (1998 to 2007).

Dr Amer K Hirmis is the author of ‘The Economics of Iraq – ancient past to distant future’

[https://www.amazon.com/Economics-Iraq-Ancient-distant-future/dp/1999824105]

By John Lee.

Mr. Mohammad Jaafar Al-Sadr, the Ambassador of the Republic of Iraq in London, has participated in a round-table meeting hosted by the Iraq Britain Business Council (IBBC) .

The Ambassador said Iraq welcomes the contribution of British companies to the reconstruction of the country, reviving the Iraqi economy, and providing job opportunities, because "British companies enjoy high experience in various fields, especially in the infrastructure sector, electricity, water, health, and education".

The meeting was attended by Baroness Emma Nicholson, and board members representing sixteen British companies.

According to a statement from the Iraqi Ministry of Foreign Affairs, Baroness Nicholson "expressed the aspiration of the IBBC and its member companies to work in Iraq in the coming period".

(Source: Iraqi Ministry of Foreign Affairs)

Cabinet approves measures to expedite completion of investment projects

(Source: Iraqi Govt)

By John Lee.

Al Qubba Water Treatment Plant has been inaugurated in east Mosul, in cooperation with the local government and the United Nations Development Programme (UNDP).

According to the state-owned Emirates News Agency, the inauguration was attended by Mansour Marid, Governor of Mosul, and UNDP Officer of Northern Iraq Governorates Projects, who thanked the UAE for supporting the project.

The station is one of the largest in Nineveh Governorate, east Mosul, and will cover the needs of 75 percent of the region’s people, benefitting 750,000 individuals.

The station is one of 23 projects implemented by the UNDP in Iraq costing AED220 million (US$60 million), which are funded by the UAE.

These projects, which are estimated to benefit 1.2 million people, aim to restore local infrastructure and social facilities in the areas of health, electricity, water and housing, as well as provide job opportunities, build national capacities, empower women, develop local markets, and encourage refugees to return to their homes.

The UAE has provided humanitarian and development aid to Iraq worth AED2.63 billion ($716 million) between 2014 and October 2019.

(Source: Emirates News Agency)

Dana Gas PJSC, the Middle East's largest regional private sector natural gas company, announced that in the first nine months of 2019 collections in Egypt, the UAE and from its share of Pearl Petroleum Company Limited's sales in the Kurdistan Region of Iraq (KRI), increased 16.7% year on year to $230 million (AED 844m).

Dana Gas, which owns a 35% stake in Pearl Petroleum, saw its share of sales of condensate, LPG and gas in the KRI jump 52% to $118 million in the nine-month period from $77 million in the same period the previous year.  Dana Gas received cash dividends of $68.3 million from Pearl Petroleum over this period.

Meanwhile, the collections from Dana Gas Egypt were $105 million during the period, in line with the $111 million received in the same period of 2018 whilst collections from the Company's Zora gas field in the UAE stood at $7.3 million.

Dr Patrick Allman-Ward (pictured), CEO of Dana Gas, said:

"We are pleased to record higher collections over the first nine-months of the year in the Kurdistan Region of Iraq, due primarily to an increase in production and regular payments from the government. Our overall collections are higher at $230 million, and our strong in-country relationships have continued to benefit our overall business performance. We are committed to operating all our assets to maximise production and value for all our stakeholders."

Pearl Petroleum is boosting production in the KRI, where 25% of the region's power needs remain unmet and the demand for power is expected to outstrip supply in the medium and long-term. The consortium operates world-class gas fields in the KRI and currently enables the power generation of three quarters of the area's official electricity production.

It signed a 20-year gas sale agreement with the KRG earlier this year that will facilitate the production and sale of an additional 250 MMscf/d of gas. Pearl Petroleum's expansion plan will see output increase to 650 MMscf/d in 2022, and then to 900 MMscf/d by 2023 from the current 400 MMscf/d.

Dana Gas's share of the proved plus probable (2P) hydrocarbon reserves at Pearl Petroleum Khor Mor and Chemchemal Fields in the KRI increased by 10% following the recent certification of reserves by its independent external reserves auditor, Gaffney Cline Associates. Dana Gas's total share is equivalent to 1,087 million barrels of oil equivalent, up from 990 million barrels of oil equivalent when Gaffney Cline first certified the fields in April 2016.

By 2040, natural gas demand in the Middle East and North Africa region is expected to grow 40% and oil demand will increase by 10 million barrels a day, according to industry estimates. To help meet that increase in energy demand, projects valued at $238 billion are being executed in the next 20 years.

(Source: Dana Gas)

The Iraq Britain Business Council (IBBC) took a significant group of members on a trade mission to KRI this week. Paramount was the need to review business opportunities and investment in the region and to learn directly from the Prime Minister Barzani his plans for business and industry.

The group, led by Baroness Nicholson, UK Trade Envoy to Iraq, Christophe Michels MD of IBBC and Eng Rasmi Al Jabri, Deputy Chairman of IBBC included representatives from Jaguar LandRover, Crescent Petroleum, EY, Siemens, Sardar Trading Agency, Garda World, Stirling Education, KPMG, G4S, OilServ Kuwait, and from the DIT Mr Rawand Askary, and James Thornton of UK FCO.

The Prime Minister introduced a number of Ministers for discussion with the group, including KRI Minister of Electricity Mr Kamal Mohammad Saleh discussing project finance and other related matters. The DG of the KRIs MoI joint crisis coordination centre Mr Hoshang Mohamed discussed the clearance of IEDs & mines and the handling of the overall IDP and refugee crisis (that G4S have been heavily engaged with).

In conversation, Mr Barzani stated that ‘the KRI government will bring in reforms to cut down on red tape for the private sector to develop. It will pursue a policy of registering companies through a 'one window' online portal which should allow company registrations to be done in the same time it takes in western countries to do so. He also said that the new administration is streamlining overall bureaucracy for private businesses to limit unnecessary Government interference.

The Government is also planning to draft a new bribery law to fight corruption and is looking at reviewing its financial framework to encourage PPPs throughout the economy including education and health. Diversification of the economy is big on the agenda with agriculture, tourism and the manufacturing of goods being a priority. KRI should import less and produce more and eventually find markets outside its borders for its products. Foreign partners for all of this are sought after.’

A permanent revenue sharing agreement with Baghdad is top of the agenda among other things to allow credit export agencies to work directly in the KRIG.’

On Sunday the Planning Minister and Mr Amanj Raheem, Cabinet Secretary, Kurdistan Regional Government spoke, and the Ministers for Construction and Electricity attended the British Consulate Reception taking place at the JLR show room kindly sponsored by Sadar Trading Agencies – thanks to Mr Sardar Al-Bebany Chairman and CEO. Dr Dara Al Khayat, Chairman of KRI federation of Chamber of Commerce and Industry in Erbil, hosted a Monday evening event and on Tuesday the mission visited Crescent Petroleum offices.

The trip continued to Baghdad

(Source: IBBC)

From Peace to prosperity:

The Conference to find out what’s happening for Iraq business.

The Iraq Britain Business Council (IBBC) Autumn Conference in Dubai on December 8^th is set against a backdrop of relative peace and security in Iraq, and the prospect of oil revenues surging through the economy is driving a wider range of business opportunities and a prospective 8% increase in GDP.

Peace is enabling the economy to diversify through the revenues that pay for a range of infrastructure projects. So this Autumn we are focusing on a range of sectors set to benefit from a stable Iraq: namely, Water, Transport and Logistics, Energy and Tech.

The recent protests have also spurred on Government reforms and incentives to drive employment, entrepreneurship and service diversity, and increase the volume of opportunity that lies ahead and the prospects for not just business-to-business but also a burgeoning consumer market.

The Iraqi Electricity Minister will likely be speaking about his reforms to open up the market to SME’s, training and new players. Other ministers including those from Construction and Transport are attending.

The recent announcement of a 10year tax-free period for SMEs in Iraq will also stimulate the Tech entrepreneur market and drive the uptake of engineering skills.

At this conference, we will discuss big-picture economics with Professor Frank Gunter (Lehigh University), Ahmed Tabaqchali (AFC Iraq Fund), and Simon Penny (UK Trade & Investment), who will address the economic backdrop in the Middle East, and the context for Iraq in particular.

The World Bank and Wood Plc will cover the water sector, while Rolls Royce, Basra Gateway Terminal (BGT), and Menzies will look at transport and logistics, and Iraq’s Electricity Minister, GE, Siemens and Enka will focus on energy.

Alongside the conference our Tech Forum brings experts on HealthTech and Educational Tech, including speakers from GE, Siemens Healthcare, KPMG, EY, Google and the British Council, among others.

While key opportunities will be outlined, the real opportunity for business is to meet the people directly involved in contracts and supply-chain opportunities. This is the place to do business, to network and to find out what’s happening in the Middle East’s most potentially dynamic market that is Iraq.

For further information and to find the latest updates on speakers – more are expected – please contact  [email protected] or visit the website to register for tickets.

https://iraqbritainbusiness.org/event/autumn-conference-at-the-address-hotel-dubai

The year it’s all on the up…

Power Grids of Iran, Syria to Be Connected via Iraq: Minister

Iranian Energy Minister Reza Ardakanian said his ministry plans to connect the country’s national grid to Syria through Iraq as Tehran and Damascus signed a preliminary agreement in this regard.

Speaking on the sidelines of a ceremony to sign a memorandum of understanding (MoU) between the Iranian Energy Ministry and the Syrian Electricity Ministry in Tehran on Saturday, Ardakanian pointed to the synchronization of the power grids of Iran and Iraq on Friday and said, “We intend to use the existing infrastructure to connect the Iranian and Syrian power grids via Iraq.”

The Iranian minister added that in the near future, the electricity transmission between Iran and Syria would become possible via Iraq.

“We plan to create the necessary infrastructure for the implementation of this program within the next three years so that we witness the synchronization of the power grids of Iran and Syria,” he added.

The power grids of Iran and Iraq were synchronized in a ceremony held on Friday attended by Ardakanian and the Iraqi deputy minister of electricity.

Earlier this year, the two countries had reached an agreement to connect their power grids by the end of 2019.

Speaking to Tasnim, Iranian Deputy Energy Minister Homayoun Ha’eri said with the synchronization of the national grids, the two countries would witness the increase of electricity exchanges.

According to Ardakanian, Iran’s exports of electricity to neighboring states, particularly to Iraq, reached a record high last year.

Ardakanian and his Iraqi counterpart Luay al-Khatteeb signed two memorandums of understanding (MoUs) and a contract in February to boost cooperation between the two countries in the electricity industry.

On October 16, a US State Department spokesman said Washington has once again exempted Iraq from its sanctions against Iran, allowing the Arab country to continue gas and electricity imports from the Islamic Republic for another four-month period.

Power cuts in Iraq have often prompted protests against the authorities. Iran supplies enough gas to power 2,500 megawatts (MW), as well as providing Iraq with 1,200 MW in direct power supplies, according to media reports.

(Source: Tasnim, under Creative Commons licence)

Iran connected its national grid to Iraq on Friday in a bid to help the Arab country reduce its power outages.

The power grids of Iran and Iraq were synchronized in a ceremony held on Friday with Iranian Energy Minister Reza Ardakanian and the Iraqi deputy minister of electricity.

Earlier this year, the two countries had reached an agreement to connect their power grids by the end of 2019.

Speaking to Tasnim, Iranian Deputy Energy Minister Homayoun Ha’eri said with the synchronization of the national grids, the two countries would witness the increase of electricity exchanges.

According to Ardakanian, Iran’s exports of electricity to neighboring states, particularly to Iraq, reached a record high last year.

Ardakanian and his Iraqi counterpart Luay al-Khatteeb signed two memorandums of understanding (MoUs) and a contract in February to boost cooperation between the two countries in the electricity industry.

On October 16, a US State Department spokesman said Washington has once again exempted Iraq from its sanctions against Iran, allowing the Arab country to continue gas and electricity imports from the Islamic Republic for another four-month period.

Power cuts in Iraq have often prompted protests against the authorities. Iran supplies enough gas to power 2,500 megawatts (MW), as well as providing Iraq with 1,200 MW in direct power supplies, according to media reports.

(Source: Tasnim, under Creative Commons licence)

The Euro-Mediterranean Human Rights Monitor said that the continuation of the European Union's implementation of the Partnership and Cooperation Agreement with Iraq in the light of the security services' continued use of lethal force against the escalating protests does not serve the goals and values of promoting human rights principles and spreading democracy in the war-torn country.

The Euro-Med had made a series of contacts and sent urgent letters to members of the European Parliament, including the European Parliamentary Relations Committee, and the Subcommittee on Human Rights in the Parliament to inform them of the suppression of demonstrations in the country, calling on the EU to suspend its partnership agreement with Iraq.

The Euro-Med questioned the feasibility of continuing the implementation of the agreement with the government of Prime Minister Adel Abdul Mahdi, which continues to launch systematic and bloody campaigns against popular protests calling for overthrowing the government for failing to address corruption and addressing electricity cuts and unemployment.

The European Commission announced earlier that the agreement focuses on common interests of the EU and Iraq such as democracy and human rights, economic, migration, security, energy, environmental affairs.

Since the start of the second wave of anti-government protests last Friday, at least 74 Iraqis have been killed and hundreds of others have been injured, raising the total death toll in October to 231.

The Euro-Med warned of the danger of targeting thousands of Iraqi protesters in Tahrir Square in central Baghdad for the fourth day in a row by the security services pointing out that the security solution will not contribute to putting down the protests, but it would only increase tension.

Despite the Iraqi Interior Ministry's announcement that its forces had faced protests with gas and rubber bullets, the protesters affirmed snipers fired live bullets to disperse the protests.

The Euro-Med documented that on the fifth of October snipers targeted protesters and caused deaths, while others were seriously injured in three locations in Baghdad and in the southern Iraqi governorates during the first wave of protests, which lasted for eight days.

The use of lethal force against protesters and the arrest of hundreds of them violates the international and Iraqi laws. The UN Code of Conduct stipulates that law enforcement officials exercising powers should protect all people from harm.

The Code of Conduct stipulates that the officials should respect and protect human dignity and preserve the human rights of all persons during the performance of their duties.

The Euro-Med stressed the need for the Iraqi government to enable citizens, media and political activists to bear their responsibilities so that people could express their opinions freely by giving them enough space to publish and share news and updates, without restriction or prosecution.

The Euro-Med called on the Iraqi government to immediately release all citizens and activists who were arrested over participating in the protests, stressing that their continued detention constitutes a serious and a clear violation of international laws and conventions, which guarantee the right to freedom of opinion, expression, and peaceful assembly.

“The failure of the Ministry of Health, hospitals and health departments in Baghdad and a number of Iraqi provinces to issue official statistics of the number of deaths and injuries is a violation of the Iraqi Human Rights Commission Law No. 53 of 2008," Omar Abdullah, a researcher at Euro-Med said.

Abdullah added that the Iraqi authorities should adhere to the UN Basic Principles on the Use of Force and Firearms by Law Enforcement Officials, which provide for the use of non-violent means by security forces as far as possible before resorting to force.

The Euro-Mediterranean Human Rights Monitor called on the Iraqi authorities to initiate an immediate and impartial investigation into the use of lethal force in dispersing the protesters, and to investigate allegations that security forces did not allow medical staff to provide services to the injured, and to ensure that all the wounded receive immediate care without obstacles.

The Euro-Med urged the EU to suspend the Partnership and Cooperation Agreement until Adel Abdul Mahdi's government brings members of the Iraqi security forces, including commanders responsible for the use of excessive lethal force to court, and to stop using any form of violence against demonstrators. The Euro-Med called on the Iraqi authorities to take concrete actions to affirm its commitment to freedom of opinion and peaceful assembly in the country.

(Source: Euro-Mediterranean Human Rights Monitor)