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Iraq has recently participated in an Arab workshop on combating financial and administrative corruption in governmental and private institutions, according to a report from Aswat al-Iraq.

The Jordanian al-Arab daily said that Iraq, Saudi Arabia, Oman and Jordan are participating in the workshop in Amman, Jordan, that tackles combating corruption with new technologies and the role of governmental institutions in such moves.

The 4-day workshop is organized by Ro'yah International for Human Resources Development in cooperation with anti-corruption Authority.

Corruption is one of the main obstacles that are facing the reconstruction of Iraq, where there are hundreds of cases at the Integrity Commission waiting to be investigated.

(Source: Aswat al-Iraq)

The industrialized world continues to struggle through a prolonged economic crisis. An Iraqi commentator in Berlin considers the impact of this on Iraq and how the country might avoid negative effects of a global recession. in this article from Niqash.

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

The Euro zone’s debt crisis, the US recession, a slowdown in growth and sharp fluctuations on global markets for stocks, currencies and raw materials: all of these indicate that the world may be facing the worst prolonged economic contraction since that which swept the world’s industrialized countries after World War I.

The question is: what impact will all of this have on Iraq?

At first glance, the answer seems easy. Iraq shouldn’t suffer too much. Iraqi banks don’t hold Greek bonds and don’t much care whether Greece is bankrupt. And as long as they are preoccupied with trying to find solutions to pressing intractable domestic problems, such as power shortages and corruption, Iraqi decision makers are not thinking a lot about what is happening inside the US or European economies.

But such disconnectedness is hardly a good sign. It is an indication that much of the Iraqi economy is not linked to the global one. And this disconnectedness is also seen in Iraq’s financial markets – more specifically in the banking sector and on the Iraqi stock market – which haven’t been able to attract much foreign investment.

Additionally because Iraq is so dependent on oil exports for its national income, the country is exposed to global market fluctuations. Any changes in oil price have an impact on the federal budget. And because, in light of a weak private sector, the Iraqi government is the main driver of the local economy – among other things, the government is the biggest employer in the country – any impact on the federal budget will have an impact on the local economy.

In light of this dependence on oil, the Iraqi government should be thinking about how to build up some financial reserves in case of unexpected developments.

By Tavish Scott, Member of the Scottish Parliament.

This article was originally published by The Scotsman, and is re-published here with the author’s permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

A familiar face walked across the hotel lobby. Former BP boss Tony Hayward was deep in conversation as Erbil’s Rotana Hotel hosted Kurdistan’s first international oil and gas conference.

The capital of the northern semi-autonomous region of Iraq was buzzing with activity. Kurdistan is the new Saudi Arabia with the fourth-largest oil reserves on the planet and Erbil could be like Aberdeen in the 1970s, albeit without the sea and the harbour and with sand storms replacing easterly wind and sea harr.

The Erbil conference was party to a massive exploration deal signed between the American giant Exxon Mobil and the Kurdistan regional government. But the Baghdad federal government is not happy as they would rather control all the oil and gas developments across Iraq. The Kurds are safe, attractive to do business with and do not want to be held back by the stultifying bureaucracy and delay of Baghdad’s green zone.

Erbil and wider Kurdistan have been mercifully free of kidnappings, road-side bombs and killings since 2007. It feels safe to walk and drive around despite the obvious security, bag checks and police who are present at all major buildings. Drilling for oil in Kurdistan is therefore easier than across the regional border so Exxon Mobil will be followed by other multi-national oil and gas exploration companies. UK interest is considerable, with £3 billion of investment in the past six months alone. Aberdeen headquartered Wood Group have a presence and other export-orientated Scottish service companies will assuredly follow.

I visited the Kurdistan parliament, met the Speaker and discussed where the industry would take politics. The devolved government’s budget has grown from $100 million to $11bn in nine years. Oil and gas revenues operate under a precise formula laid down in the federal constitution and will add a further $2bn to the Kurdistan budget in the next year.

"The biggest opportunity coming up is Iraq. The stability and security is still an issue but that is a growth market, especially as hopefully the situation improves and they have great plans to increase oil output. It'll be a long-term opportunity, but it's out there. We see it as a big opportunity longer term," said Larry Prein, managing director of Ford Middle East.

Ford currently has one dealership in the country and is working with them to make a mark in Iraq, according to Gulf News.

Prein said that the company also plans to expand in Saudi Arabia next year. "We've seen stability in most markets in the Middle East and growth in some markets like Saudi Arabia," he said.

(Source: Gulf News)

Reuters reports that the United Arab Shipping Company (UASC), which is jointly owned by a group of Gulf Arab states and Iraq, has picked banks for investor meetings in advance of a possible bond issue.

Deutsche Bank, Mitsubishi UFJ and UBS will arrange meetings for the company.

Roadshows will begin in Singapore on Thursday, and continue in Hong Kong on Friday, Abu Dhabi and Dubai on Nov. 28 and London on Nov. 29, before concluding in Switzerland on Nov. 30.

A dollar-denominated bond from the company will be the first time it has issued public debt in any currency, a source at one of the lead arrangers told Reuters.

UASC is unrated and will not be seeking a credit rating ahead of any potential issue given its ownership structure -- it is owned by the governments of Saudi Arabia, Qatar, Kuwait, United Arab Emirates, Bahrain, as well as Iraq.

The firm signed a $302 million term loan facility in February to back the acquisition of three A13 vessels ordered from Samsung Heavy Industries.

(Source: Reuters)

Speech by British Ambassador, Michael Aron at the Kurdistan-Iraq: Oil & Gas Conference

Mr Chairman, Prime Minister, Ladies and Gentlemen. Thank you for inviting me to speak at Kurdistan-Iraq Oil & Gas 2011. The timing could hardly be better.. as the country with greatest potential for increasing conventional oil production in the medium term, the trajectory of Iraq’s future oil and gas production is of considerable importance to global energy markets. British Companies are actively involved in Iraq and I look forward to hearing their perspective, and the views of Ministers and others, on doing business here and their expectations for the future.

Oil is of course central domestically to Iraq. It currently accounts for around 65% of GDP and 95% of federal budget revenue. Oil will be the single largest source of government revenue for years to come. But Iraq’s oil production – currently around 2.8mbd - is still only a fraction of its potential. Of this, around 2.2mbd is currently being exported. On IEA figures – that is without April’s increase in audited reserves to 143 billion barrels - Iraq has the fourth largest proven reserves of oil in the world. While the government’s declared aim to increase production to 12mbd by 2017 will be challenging, it demonstrates the level of ambition and scale of opportunity for companies and investors.

Oil grabs the headlines, but development of Iraq’s gas fields is also crucial and time sensitive. Once domestic demand is satisfied, the huge gas resources in Iraq give Baghdad and Erbil the opportunity to set a long-term strategic energy relationship with Turkey and Europe through the Nabucco pipeline and other southern corridor routes. European energy demand for gas is growing and Nabucco and others can make a significant contribution to European energy security.

Development of the oil and gas sector will drive the wider reconstruction of physical and human capital that Iraq needs. This is important for domestic stability. A combination of stability, economic development and the creation of a competitive private sector offer huge opportunities for international and Iraqi business. And it puts Iraq right back at the centre of the global economy it left 20 years ago.

Bloomberg reports that the United Transformers Electric Company of Saudi Arabia, and the Turkish unit of Siemens AG, have signed contracts to supply transformers to Iraq.

United Transformers (UTEC) will provide 1,250 units with a total capacity of 400 kilovolts for $11.6 million, while Siemens Turkey will provide another 1,250 with a total capacity of 31.5 kilovolts for $1.7 million, Electricity Ministry spokesman Masaab Serri told reporters on Wednesday in Baghdad.

(Source: Bloomberg)

The following article was published by Reidar Visser, an historian of Iraq educated at the University of Oxford and currently based at the Norwegian Institute of International Affairs. It is reproduced here with the author’s permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

In a recent opinion piece for CNN, Christopher Hill, the former US ambassador to Iraq who served there from April 2009 to August 2010, discusses the legacy of the Iraq War in light of the recent US decision to not seek a continued military presence beyond 2011. Among his key points is that it would be wrong to plunge into a discussion about “who lost Iraq”.

In defence of his position, Hill makes several arguments.

At times, Hill is telling us that the Iraq War was not truly winnable – in the sense that establishing a stable democracy there could be inherently problematic. The reason, according to Hill, is Iraq’s deep-rooted sectarian conflict. In Hill’s words, “the Shiite-Sunni divide in Iraq has been a fact in Iraq that has never gone away. Facts, so the expression goes, are stubborn things. Thirteen-hundred-year-old facts are especially stubborn things.”

At other times, Hill tells us that nonetheless, the United States did in fact win the war, since they installed Nuri al-Maliki as prime minister. In Hill’s view, Maliki will form some kind of anti-Iranian bulwark based on widespread anti-Iranian sentiment among the masses of Iraq’s Arab Shiites. Again, according to Hill, “Maliki is, to be sure, tough-minded and not easy to convince of things. But the notion that he is an Iranian sympathizer - as opposed to a highly nationalistic Iraqi - is based on no evidence at all…”

According to The Saudi Gazette, the Iraqi government has earmarked an estimated $50 billion for airport development projects in Iraq over the next few years.

Iraqi Airways is scheduled to add new 55 Boeing and Bombardier aircraft to its fleet soon.

The emerging markets of China, Russia, India, the Middle East, and Africa are forecast to be among the growth leaders in airport infrastructure development spending over the next few years.

Abdulmunaim M. Ismail and Ghaml Darweesh Al Isuozah, special advisors to Benkin Regane, Iraq's Deputy Minister for Technical Affairs with Ministry of Transport , will make a presentation on Iraqi government's plan to spend $150 billion for the infrastructure program related to airports, sea ports and railways. Special focus will be on ongoing and new transportation projects in Baghdad, Basra, Dohuk, Karbala, Salhaddin province etc. The Umm Qasr seaport expansion and country-wide railway network projects will also be highlighted.

"The presentations by Iraqi authorities will provide an overview of business opportunities available at the airports in Iraq, assesses challenges and obstacles with a view to mitigating them, leading to business opportunities for all," said Raj Menon, General Manager of Arabian Reach, the organizers of the conference. "We were happy to have them as our featured speakers and are even happier to note that EMASC 2011 is on the road to becoming one of the largest airport suppliers event ever held in the Middle East."

(Source: The Saudi Gazette)

A railway connecting Syria and Iraq will begin operations next year, according to a report from Kuwait’s KUNA news agency.

In addition, a direct line connecting Syria’s eastern Deir Al-Zor-Al-Bukamal station to Iraq has been completed, the director general of the Syrian rail company has said.

“The rail link is a direct line that will guarantee smooth transport of commodities from Syria toward Iraq,” he said, adding that continuing work in building the Deir Al-Zor-Al-Bukamal station is a part of the project.

Iraq and Syria began the railway project to link both countries and transfer freight from southern Europe to the Gulf region.

The Iraq-Syria project came after confirmation of a Jordanian plan to resurrect a $6 billion railway project linking the port hub of Aqaba in Jordan to Syria, via Amman and Zarqa, including links to Saudi Arabia.

In May 2011 Iraq and Jordan also signed a preliminary agreement to build a railway connecting Baghdad and Aqaba with the aim to strengthening commercial ties.

The railway is expected to be 150 kilometers long, and the trains will travel at speeds of up to 140 kilometers per hour.

(Source: Al Arabiya, KUNA)