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The International Finance Corporation (IFC), a member of the World Bank Group, is investing up to $18 million in Saudi dairy company Al Safi Danone’s Iraq-based subsidiary, to expand its operations in order to improve domestic food security, boost Iraq’s non-oil sector, and reduce its reliance on imported dairy products.

IFC’s long-term investment, which is structured as an Islamic Finance transaction, will help Al Safi Danone Iraq, a pioneer in the Iraqi food production industry, increase production of high-quality dairy products to meet rising demand, improve food distribution standards, and create more than 250 new jobs in the next two years.

The company’s new greenfield dairy processing facility in the Kurdistan Region has a target production capacity of around 59,000 tons per year, focusing initially on a range of spoonable and drinkable yogurt products, as well as cheese and UHT milk.

George Abi Najem, General Manager GCC, Iraq and Levant, of Al Safi Danone, said:

“This investment will help us establish a modern dairy enterprise with the latest processing and packaging equipment and train our employees to international standards.

“Thanks to this technology, the local market will enjoy higher quality dairy products at affordable prices. Al Safi Danone’s new factory in northern Iraq is just the first sign of the group’s commitment to Iraq, one of the most important markets in the region, despite its challenges.”

IFC’s investment is part of a broader World Bank Group strategy to encourage South-South investments, while supporting the diversification of Iraq’s economy and improved agricultural production to boost growth. Food production and distribution will play a key role in transitioning Iraq from an oil-based economy to a more diversified one.

Mouayed Makhlouf, IFC Director for the Middle East and North Africa, added:

“Our developmental role in Iraq is more important than ever, especially in providing funding to competitive companies in the non-oil sector and facilitating investments from other countries within the region into Iraq.

“We hope our commitment to this project will encourage other international and domestic investors to invest in Iraq.”

Over the next few years, IFC is planning to step up its investment and advisory services in Iraq, investing $100-130 million per year, depending on the security situation, in priority sectors such as infrastructure and financial markets.

Al Safi Danone Iraq is a joint venture of the Saudi dairy company Al Safi Danone, Saudi conglomerate Al Faisaliah Group, French-based multinational Danone Group, and Iraq based retailing, sales, and distribution company Al Yasra. Its mission is to provide healthy products to support the well-being of Iraqi families based on a balanced diet that includes dairy products. Al Safi Danone Iraq is working to serve the Iraqi market with a range of products of the highest international quality standards, such as Activia.

(Source: IFC)

From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

In its fight against the Islamic State in Iraq and the Levant (ISIL, ISIS, IS), Iraq is now desperate for advanced weapons and help from the United States.

A delegation led by Iraq's Prime Minister Haider al-Abbadi is at the White House trying to convince US President Barack Obama to provide substantial financial and military aid.

For Iraqi Foreign Minister Ibrahim al-Jaafari, however, defeating ISIL is really just a matter of time, he says.

But there are serious problems. Iraq's army has been weakened over the last few years, so instead the fight is led by predominantly Shia militias known as Popular Mobilisation Forces, and they are at the forefront of the battles in Tikrit, Ramadi and Mosul.

But even as they push back against ISIL, they now have to defend themselves against allegations that they, in turn, are committing atrocities against Sunnis; accusations that al-Jaafari denies.

Iraq of course is not the only area in the Middle East where fighting along sectarian lines is taking place.

In Yemen, a Saudi-led coalition is now waging attacks on the Houthis who are receiving assistance from the Iranians. But Iraqis have decided to stay out of the fight, saying that diplomacy should be given a chance.

Iraq's Foreign Minister Ibrahim al-Jaafari talks to Al Jazeera about the fight against ISIL, sectarianism and the ongoing confrontations in the Middle East.

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq's Canning Can't: Too Much Competition For What Was Once Karbala's Biggest Business

Once canning foods and juices was one of the biggest businesses in Karbala. Today, under pressure from imports and the security crisis, it's failing – and companies from places like Iran are taking advantage.

Shoppers patronising the centre of the Iraqi city of Karbala, on Talim Street, come out of the markets carrying all kinds of canned foods, from a variety of countries. The shelves are stacked high with canned products from Turkey, Lebanon, Jordan, Kuwait, Saudi Arabia and Iran and the cans are cleaned of dust by supermarket workers continuously during the day, so they are shiny and appealing to customers. Cans produced in Karbala are in the minority.

But shoppers here don't seem to mind; they may even prefer the imported cans of food as they leave the stores with bags of things like dairy products and date syrups that are not made locally.

Customer attitudes and a variety of other factors are leading to a decline in the manufacture of canned products from Karbala itself, a metropolis that was once renowned for it's canning businesses; a canning factory was one of the largest firms in the city once. Many Iraqis remember the advertisements that would always appear for Karbala's canned produce – the products were made even when Iraq faced economic sanctions.

And although there are still plenty of canning factories around the city, many of them look like they are badly in need of maintenance. Places that used to employ hundreds of locals and produce billions of cans stand dormant now.

It is hard to get accurate statistics but its is estimated that the canning business used to provide more than 3,200 jobs here and there's no doubt that it fuelled the local agricultural sector, especially in tomatoes, dates and certain fruits. There used to be around 14 production lines in local plants and now there are only two, employing about 80 people. A molasses factory that once boasted an output of about 7,000 tonnes per year produced just 300 tonnes in 2014.

“The reason why there's been a decline in canning is the high cost of production,” says Jafar Sadiq, the manager of a canning company in Karbala. “The materials for canning used to be produced in the country but now they are mostly imported from elsewhere. Containers of cheese, jams or molasses are imported from outside of Iraq at high prices. When you add the cost of importing to the cost of canning, then the price ends up higher than that of imported cans.”

There's also the fact that the country is open to relatively unrestricted imports. And, as Sadiq notes, “the packaging on the imported cans is elegant and attracts more customers.”

Previously his company had been producing all kinds of things, he said, including tomato paste, jam, syrup, soft drinks, juices, pickles and several kinds of sauces. Now the company only makes date syrup and a couple of juices.

“We haven't been able to renovate the plant properly and to bring in all new canning machines,” Sadiq explained. “So we're still using some of the older machines. The problem is that the new machines are expensive and, as a business, it's impossible to compete in the market properly under the unstable conditions that Iraq is currently experiencing.”

Local economist Abbas al-Haddad says that at the moment it seems that local industry can't continue without some sort of government support or market protection. “The fact that these factories have to import raw materials makes their products vulnerable to price fluctuations and forces them to have a higher price,” al-Haddad argues. He also believes that this kind of thing is a negative sign for the Iraqi economy in general.

“There's a lack of integration,” al-Haddad explains. Different industries should complement one another – as in, the raw materials should be made in Iraq and then manufacturing should follow suit.

International canning companies are taking advantage of the Iraqi businesses' problems and have also opened branches in Karbala. One Iranian company, Kala, now has a major storage depot and showroom facility in the city. The latter is very popular with local shoppers who believe the prices are better than local canned goods.

Karbala shopkeeper Ahmed Saidi says buying canned goods from the Kala warehouse saves him money because he doesn't have to go elsewhere to get all his supplies. “Almost all of the food items in my store are now from outside Iraq,” he adds. “Local products seem to slowly be disappearing from the market. If you compare them with imported foods, there are hardly any there.”

Saidi told NIQASH that people have all kinds of reasons for preferring international products.

In fact, during the interview one of his customers was standing beside him at the counter and agreed. “I trust the imported products more,” the customer, Jassim Ali, said. “I feel more comfortable with their production methods and their hygiene. The prices are better too.”

Ali said he'd heard a lot of bad stories about the conditions in which local products were made. “A lot of other people have also heard these stories and they have the same feelings as me,” Ali explained. “We don't trust the people responsible for the canning industry in Karbala any more.”

By Adnan Abu Zeed for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Operation Decisive Storm in Yemen has stirred the Iraqi sectarian divide.

While the Shiite majority opposes the campaign, the Sunnis are voicing support for it. These differing positions, expressed for the Shiites by the National Alliance and for the Sunnis by the Union of Nationalist Forces, led to a disagreement at a meeting of Iraqi political forces held at the home of parliament Speaker Salim al-Jubouri on March 29, when the Sunnis rejected a Shiite alliance proposal to issue a statement condemning the Saudi-led military operation.

Vice president Osama Najafi, a Sunni, had on March 28 announced his support for the “Arab alliance, which aims to undermine the Houthi influence in Yemen.” In an April 1 TV interview, Ammar al-Hakim, a Shiite and head of the Islamic Supreme Council, described the military intervention in Yemen as “a costly adventure with uncalculated consequences.”

Laith Shubbar, an academic researcher and presidential adviser, told Al-Monitor, “This war has effectively contributed to fueling sectarianism not only in the Iraqi conflict, but in the entire region. The ​​wars, disputes and media fuss plaguing the area clearly reflect ongoing sectarian mobilization, which distracts the people of the region with internal fighting and conflicts in a bid to weaken them.”

Operation Decisive Storm has also divided Iraq's religious institutions. The Sunni Association of Muslim Scholars announced its backing of the campaign in a statement issued March 29, referring to it as the “Arab effort aimed at supporting the Yemeni people and confronting the Iranian tide.” On the other hand, the cleric Muqtada al-Sadr, leader of the Sadrist movement, categorized the operation in a March 27 interview as “interference in the affairs of the Yemeni people.”

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The extremist Islamic State group has worked the Internet to it's advantage from the very start of its campaign in Iraq. Locals have lagged behind. But now, some say, they are coming together online to fight back.

Shortly after the extremist group known as the Islamic State took over the northern city of Mosul last June, the Iraqi government shut down various forms of online social media and Internet services. It was supposed to halt the transmission of sensitive and intimidating material being transmitted between the Islamic State, or IS, group, their supporters and potential enemies.

But it didn't really work, says Iraqi blogger and activist Tahseen al-Zarkani. “The former Iraqi government made a big mistake by blocking those sites,” he told NIQASH. “Because they basically left the IS group alone online, to occupy Facebook and Twitter, with their own propaganda.”

Ordinary Iraqis could only access these sites with difficulty and nobody else was able to put out any information about what was really happening in Iraq; so all the news people were getting was one sided and made the IS group look victorious.

“Iraqi activists were defeated before the battle for social media even began,” al-Zarkani says. “At first they were helpless and really didn't know what to do. But this has changed. Local activists have been able to get more experience and training to confront the IS group online since then.”

He now believes that Iraq's online activists have come together, many from different backgrounds, and are trying to counter the IS group's propaganda and “make up for the opportunity they missed before”.

“Most Iraqi activists tend to use Facebook and only a few of them use Twitter,” says Hisham al-Hashimi, a researcher into armed militias in Iraq who also advises the Iraqi government.

The United Nations education agency today celebrated the opening of a new school at Dawodiyah Camp in Dohouk, Iraq, as part of its efforts to provide quality secondary education to children and adolescents in internally displaced persons communities.

The opening of the new school represents another major milestone in the UN Educational, Scientific and Cultural Organization’s (UNESCO) work to improve access to quality education in Iraq following the opening of the Baharka Secondary School in March this year.

“Regardless of the circumstances you are in, remember that education is your right, demand for it and take advantage of it,” said Ali Zulfiqar, the UNESCO Project Manager, who spoke on behalf to the new students on behalf of the UNESCO Office for Iraq Director, Axel Plathe.

The Dawodiyah Secondary School, for which UNESCO received financial support from the Government of Saudi Arabia, has six classrooms and will host up to 500 students and 20 teachers in two shifts. Children will attend catch-up classes over the next three months, before sitting for exams at the end of June.

With 4,017 people and 661 families currently residing in Dawodiyah camp, the opening of the new school will allow a large number of students to continue their education and restore a sense of normality and stability to their lives and helps fulfil the aims of UNESCO’s project to continue ensuring that quality education reaches the children of displaced people.

Government and education officials from the regional capital, Erbil, attended the opening ceremony, as did students, parents and teachers along with members of the international humanitarian community and civil society organizations.

“We are thankful for UNESCO’s support in constructing the Dawodiyah Secondary School for IDPs [internally displaced persons],” said Abed Yousef, Director General of Education in Dohouk during his speech at the opening ceremony, “and for helping the Ministry of Education of the Kurdistan Regional Government in conducting teacher training workshops and providing catch up classes as well as the necessary stationery for students to continue their education.”

(Source: United Nations News Centre)

By Mustafa al-Kadhimi for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

On the evening of April 2, Iraqi Prime Minister Haider al-Abadi announced the liberation of Tikrit from the Islamic State (IS) and the raising of the Iraqi flag over the local government building.

Tikrit is the first major Iraqi city to be retaken from the extremist group. IS first occupied Fallujah in January 2014 and then took Mosul and Tikrit in June. The liberation of Tikrit is informative in a number of ways in highlighting the approach needed for success in future battles against IS.

First, the military operation in Tikrit was an example of the integration of the Iraqi army and police on the one hand and the popular mobilization forces and the tribes on the other, along with support from the international coalition assembled to launch air strikes against IS. The coalition played a pivotal role in targeting IS fortifications in Tikrit.

Second, holding ground in Tikrit, which will not be easy, will require trained forces able to completely cleanse the city of gunmen and IS members, rehabilitate it and allow inhabitants to return and restore normal life there.

Third, the battle for Tikrit has sent the message to IS that the Iraqi forces have overcome the shock of their initial defeat by the group and have shifted into fighting mode. Eliminating IS in Iraq is now only a matter of time.

Fourth, speeding the rehabilitation and reconstruction of Tikrit to permit the return of displaced residents will undermine the momentum of IS’ propaganda campaign, which has portrayed Iraqi forces simply as militias seeking revenge. Thus, a key factor is that the forces stationed in Tikrit remain disciplined and that they hand over security to the local police, as ordered April 1 by Abadi after the city is fully secured.

It will be a message of reassurance to local residents that security in the city will be the task of the police after the army and the popular mobilization forces wrap up their operations, restoring the civilian character of Tikrit. On the first day of the city's liberation, fighters in the popular mobilization forces torched and looted a number of homes.

Abadi condemned such acts and threatened to sanction anyone caught violating the rights and property of Tikrit residents. Numerous violators were arrested. The process of reconstructing infrastructure in the city has already begun.

By John Lee.

A report from Amnesty International USA says that Iraq had the world's fourth highest rate of executions in 2014.

China again carried out more executions than the rest of the world put together; Amnesty International believes thousands are executed and sentenced to death there every year, but with numbers kept a state secret the true figure is impossible to determine.

The other countries making up the world’s top five executioners in 2014 were Iran (289 officially announced and at least 454 more that were not acknowledged by the authorities), Saudi Arabia (at least 90), Iraq (at least 61) and the USA (35).

The report added that death sentences in Iraq are often handed down following grossly unfair trials.

(Source: Amnesty International USA)

By Wassim Bassem for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Qasim al-Rubaie, a teacher from Babil province, told Al-Monitor in front of a grocery store, “You will not find any Iraqi grown vegetables and fruits. Instead you'll find imported goods from Jordan, Turkey, Iran and the Gulf countries.”

In fact, Iraqi agricultural products are not found in many local grocery stores, as if Iraq is no longer producing food products. The same applies to locally manufactured products, such as tissues, luxury items and drinks, which cannot be found in the markets. Yet, markets are overflowing with all sorts of imported goods.

This phenomenon is not new, according to Alaa Najm, a merchant. He told Al-Monitor, “The presence of domestic goods in the markets began to decline in the late 1980s. The reason for that was the former regime’s military expenditures. Then agricultural and industrial production decreased, and the government’s support for these sectors vanished, factories became obsolete and agricultural land reclamation projects no longer exist.”

Najm began traveling to China in 2003, along with hundreds of Iraqi retail and wholesale traders, to import goods at a cheap price. Because of the traders’ import activities, foreign products have become abundant on the Iraqi market, in the absence of mechanisms to protect local production, obsolete production techniques and an unimplemented customs tariff law on imported goods.

In an interview with Al-Monitor, Maytham Elaibi, an economist and academic researcher at the University of Baghdad, said that the major collapse in the domestic production of goods is attributed to “the economic policies that have failed to support factories and farm owners in making their products profitable.”

Elaibi said, “The low salaries have prompted workers to move from the private to the public sector, which increased disguised unemployment, which is unproductive.”

By Ali Mamouri for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

In the book "The Shia Revival: How Conflicts within Islam Will Shape the Future," Vali Nasr, an Iranian-American researcher on the crises in the Middle East, came to the conclusion in 2006 that the religious struggle resulting from the rise of the Shiite identity in the region would reshape the Middle East. Developments in recent years have proved that this view seems accurate.

Today, Shiite forces are strongly present in Lebanon, Syria, Iraq and Yemen. They are united and firmly associated with the Iranian axis. This new situation did not happen by chance or overnight. Rather, it was preceded by many arrangements that Iran has been making for decades.

The sectarian rivalry in the region began with the Iranian Revolution in 1979, when Saudi Arabia and Iran raced to find and endorse revolutionary groups that fought different governments based on Islamic ideology and inspired by the Quranic terms of jihad in the Middle East. These groups include al-Qaeda for the Sunnis and Hezbollah and the Houthi movement for the Shiites.

While Saudi Arabia has invested in jihadist organizations in Afghanistan — such as the Afghan Arabs, or the Arab mujahedeen, during the Soviet occupation of Afghanistan — Iran has invested in the Shiite opposition forces in the Arab countries, such as Hezbollah in Lebanon, Hezbollah al-Hejaz in Bahrain and the Badr Brigade in Iraq.

The Saudi investment has lost, as it has turned against Saudi Arabia. It has evolved into al-Qaeda, the Islamic State (IS) and other Salafist organizations that have placed Saudi Arabia at the top of their enemy list. The Iranian investment has, however, greatly succeeded and was gradually expanded toward non-Shiite majority areas such as Syria and Yemen. Today, 30% of Yemen’s population is Shiite, and the most influential group there is the Houthi movement, which is close to Iran. In Syria, Iran has succeeded in protecting the Bashar al-Assad regime, which is under the control of the Alawite minority close to the Shiites.