Custom Search

Kuwait's Arabian Beverage Company (ABC), which distributes water, juice and dairy products in the Gulf region, plans to boost production and also aims to penetrate the Iraqi market this year, according to Reuters.

The company, owned by Kuwaiti conglomerate Bukhamseen Holding [Bukhamsin], founders of Kuwait International Bank and Abu Dhabi listed First Gulf Bank, wants to creatae a strong base in the region as it competes with rivals such as Kuwaiti Danish Dairy Company and Saudi's Al Marai Company.

ABC will double its water production capacity to 240 million units per year to feed demand in the Gulf market and also increase its fleet to about 800 trucks in three years, Elie Abdo, ABC's deputy general manager for business development told Reuters.

'Currently we have around 420 distribution trucks in Kuwait, Saudi Arabia, Bahrain and Qatar... and for the next three years we will stay focused on this region,' Abdo said.

On the Iraq foray, Abdo said ABC had entered the Iraqi market shortly after the US led invasion in 2003, but through a different brand name and distributors based there.

'Now we plan to penetrate the Iraqi market in October this year through the ABC brand...and that operation alone could need up to 500 trucks for distribution,' he revealed.

(Source: Reuters)

Iraq has agreed to pay $408 million in cash to Egypt to settle old debts owed by Baghdad from more than two decades ago, a government spokesman said.

Reuters reports that the debts date back to a period when United Nations sanctions following the 1990 Iraqi invasion of Kuwait blocked the payment of salaries that were due to hundreds of thousands of Egyptian labourers who worked in Iraq in the 1980s.

"The Iraqi cabinet decided that the finance ministry should pay the $408 million in original debts to Egypt," Ali al-Dabbagh said in a statement. "This payment is a proof of Iraqi solid economic relations with the world countries," he said.

Prime Minister Nuri al-Maliki's government wants to foster better ties with Arab neighbours and foreign creditors, and the Iraqi finances have improved post-Saddam.

In 2003, the country's external debt was $130-$140 billion but that went down to about $88 billion last year. The Paris Club of 19 rich creditor nations agreed in 2004 to write off 80 percent of Iraq's roughly $40 billion debt.

Progress on debt forgiveness talks with non-Paris Club creditors remains uneven though the United Arab Emirates cancelled Iraq's debt in 2008. Estimates of Iraq's non-Paris Club debt vary but Kuwait, Turkey and Saudi Arabia are among the notable hold outs.

(Source: Reuters, Aswat al-Iraq)

Iraq and Jordan have signed a Memorandum of Understanding for a rail line linking the Jordanian Red Sea port of Aqaba with the Iraqi capital of Baghdad,

The Jordanian news agency Petra reports that the MoU was signed in Amman on Sunday by Jordanian Transport Minister Muhannad Qudah and his Iraqi counterpart Hadi al Ameri.

Jordan has plans for a $3.1 billion rail network running 950 kilometers (590 miles) to connect the kingdom with Syria, Iraq and Saudi Arabia. The kingdom is due to start the first bids for the project by the end of June, according to Bloomberg.

(Sources: Bloomberg, Petra)

Teh Arab Times reports that Kuwait is ready to sign an agreement with Iraq to guarantee that the Mubarak Al-Kabeer port project will not hinder the construction of Iraq's Grand Faw port.

According to the Director of Information at the Iraqi Ministry of Foreign Affairs, Aous Al-Tamimi, the Iraqi Minister of State for Foreign Affairs Ali Al-Sajri held a meeting with the Kuwaiti Ambassador to Iraq Ali Al-Momen to discuss issues of mutual interest, during which they deliberated the construction of Mubarak Al-Kabeer port and its effects, where Al-Momen assured that the project will not affect Iraq's port project, or its regional waters.

Meanwhile, Al-Momen had indicated readiness to sign an agreement to allay their fears, and went ahead to present some maps and aerial photographs of the location which showed the two projects are 20 kilometers apart. The two countries stand to gain economically, so they agreed to set up a joint technical committee to resolve the issue, whereas a high-powered delegation from Iraq, involving ministers, lawmakers and experts will soon visit Kuwait for further talks on the project.

In the wake of campaign by Iraq against the construction of Mubarak Al-Kabeer port, and statements issued by Iraqi MPs, the Director of Consultative Studies at Kuwait's Ministry of Public Works, Sorour Al-Otaibi, has stated that almost 48 percent of the work in the first phase of the project has been completed, reports Al-Anba daily.

By Tariq Abdell, Iraq’s political risk analyst, Founder & CEO of  Mesopotamia Insight.

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

 The recent upsurge in violence across Iraq ( sticky bombs, car bombs, roadside bombs, targeted  assassinations, suicide bombers, prison breaks, etc...) underscores, irrefutably, the ubiquitous vulnerabilities of Iraq's national security forces that is exacerbated by a host of daunting and intricate constraints: politicized security apparatus, lingering ethno-sectarian loyalties,  political sectarianism, and the region’s geopolitical tensions, namely, Saudi Arabia and Iran's regional ambitions.

In the absence, thus far, of a US-Iraq postwar strategic partnership, the impending complete withdrawal of the U.S. combat troops from Iraq by the end of 2011  and the protracted political horse-trading over the security posts (defense, interior, and national security) will,  ultimately, undermine Iraqi Security Forces’ operational capabilities (air sovereignty and border security, for instance) and, subsequently,  jeopardizing Iraq's national security. Moreover, given the high levels of interoperability of the two militaries, the foreseeable security vacuum could pose a serious threat to Iraq's national security, namely:

• Reemergence of the quasi-defeated extremist groups, namely, AQI, Jaysh al-Islami, the Promised Day Brigade, Kata’ib Hizbollah, and Asaeb Ahl al-Haq.
• Rekindling of sectarian violence and lawlessness that engulfed Iraq before (05-07).
• Precipitating the war between Baghdad and Erbil over the disputed oil-rich Kirkuk.
• Disruption of Iraq's oil production and supply and, subsequently, Iraq’s petrodollars.
• Invigorating Iran’s centuries-old expansionist and religious ambitions in Iraq – turning Iraq into a satellite Shiite theocracy.

Moreover, the cumulative effects of the ruling class’ ineptitude and schism are protracting decades of erroneous policies and, subsequently, the people’s tribulations. Thus, impelling the majority of the Iraqi people to distrust the legitimacy of their government and the effectiveness of its institutions as evidenced by the latest protests, which accentuated the Iraqi people frustration with their elected officials' ineptitude and their epic failure to curb corruption and end ethno-sectarian quota-sharing system.

The deep-seated political sectarianism and its inherent symptoms, namely, impoverished and disenfranchised population, lack of basic services, higher unemployment, severely languished infrastructure, ineffectual institutions, and rampant corruption are most likely to linger for years to come if the political class continue to pursue self-serving and sectarian-based agendas and political marginalization.

Thus, given the aforementioned challenges, the ruling class (executive and legislative branches) ought to outline clearly its postwar policy objectives and priorities, in accordance with the country’s laws and strategic interests, and heed to the aspirations of its people, regardless of their political and religious believes.

Drawing on past experiences (Eastern European Countries, for instance), Iraqi government ought to craft a comprehensive strategy encompassing socio-economic development, a genuine national reconciliation, and a modern security architecture as an imperative prerequisite for attaining  political stability and, subsequently, building a modern and prosperous Iraq.

Conversely, in the absence of a strategic foresight and a strong leadership capable of implementing the aforementioned  strategy, Iraq may revert to its darkest years of lawlessness, religious extremism, political instability, foreign interventions,  and ethno-sectarian strife. Simply put, Lebanization of Iraq’s nascent democracy.

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

The author, Tariq Abdell, is an Iraq's political risk analyst, and Founder & CEO of Mesopotamia Insight

He can be contacted at: [email protected]

or

Followed on twitter: Mesopotamia_iq

Just this week, we have seen a United Arab Emirates firm invest in a new Iraqi oil refinery, a German company discussing investing in Basram, and a Korean company building 25 power stations.

On top of that, there have been Iranian gas deals amd Saudi Arabian interest in Iraqi telecoms, plus both British and Turkish firms have been mentioned in the topic of new investment in Iraq.

It is not surprising, then, that the Iraqi Department of Trade is expecting even bigger things for the next Baghdad International Fair.

30 countries and 1,500 companies are expected to attend from around the world, the Ministry for Trade said. Learning its lessons from last year, the preparations for this year are to begin earlier.

(Sources: Iraq Ministry of Trade; Aswat Al-Iraq)

By T. Keyzom Ngodup, co-founder and Executive Director at Ideas sYnergy, an Iraq based private sector development consulting company.

For a long time now, the discussion continues within different circles and corridors in Iraq, on whether microfinance institutions (MFIs) can operate as NGOs and continue providing micro-loans to low-income entrepreneurs who lack access to finance for their ideas and enterprises.  The NGO Directorate and the Central Bank of Iraq, both of whom recognize the importance of financial intermediation for micro, small and medium enterprises (MSMEs) applaud the work of MFIs with a few reservations on ownership of the fast growing assets of the lending NGOs, on interest rates (which is the lowest among MENA microfinance industries and globally), and on the transformation of NGO-MFIs to Non Bank Financial Institutions.

There are 12 microfinance institutions, operating as NGOs, providing access to finance for those living in poverty and those without access to banks, namely the un-banked.  As of December 2010, these MFIs, operating in all 18 governorates of Iraq, boosted an outstanding loan portfolio of $106.4 million and 75,182 active clients, growing by 28.4% and 27.7% respectively since 2009.  The support of USAID has been instrumental in the sustainability of these NGO-MFIs, and USAID-Tijara continues to provide technical assistance and lead the sector’s development.  However, in order for NGO-MFIs to scale-up, institutional transformation to NBFIs is recognized as one of the most effective strategies for achieving a significant scale by offering a wider range of services, accessing commercial sources of capital and improving operational efficiency through enhanced systems, controls and transparency in reporting that would result from links to the Central Bank and other banking expertise.

The banking system, comprising of state, private and foreign banks, is highly liquid with total deposits amounting to $33 billion in 2009. Bank liquid reserves to bank asset ratio increased from 98% in 2004 to 156.6% in 2009, compared to 14% for Saudi Arabia and 12.32% for UAE in 2009.  According to CBI, total bank loans amounted to $5.8 billion as of June 2010. This compares to around $22.4 billion for Syria and approximately $250 billion for Saudi Arabia.  While there is a steady rise in credit to private sector as a percentage of GDP, at 6% in 2009, Saudi Arabia and UAE record above 50%, and even  low success economies such as Libya and Syria record 16% and 21% respectively. Although the banking sector is the main component of the Iraqi financial system, the banks offers few credit facilities, and the credit culture is poor.  USAID, through the recently incepted Iraq Financial Development Project (IFDP), in partnership with CBI, is working to address the infrastructure of the financial sector through targeted reforms, credit information systems such as credit bureau, and enhancement to the national payment systems to enable cost-effective financial intermediation.

Success achieved by the NGO-MFIs need to be accordingly considered within the Central Bank’s reform priorities, and clear guidelines need to be issued for NGO-MFIs that are considering transformation in order to access mainstream commercial capital for their target clients: the poor and the un-banked.  NGO-MFIs CHF and Amalkom have demonstrated not just commitment, but also the capability to ‘mainstream’ towards a regulation institution and access the $90 million line of credit from OPIC, however unclear guidance from CBI and correspondence with the NGO Directorate has stalled the process, or in other words, delayed the deployment of enterprise financing that the young entrepreneurs in Iraq need.

Read www.microfinancegateway.org, www.sanabelnetwork.org for more information on microfinance and MSME financing.

T. Keyzom Ngodup is co-founder and Executive Director at Ideas sYnergy, an Iraq based development consulting company committed to economic and social development through market-based solutions that help build and scale innovative businesses for sustainable and inclusive private sector development.

Baker Hughes, the world's third largest oilfield services firm, expects drilling activity to pick up in Opec-members Saudi Arabia and Iraq from the second half of this year as delayed projects restart, Reuters reported on Wednesday.

"For the second half of 2011, we expect activity to increase, especially if you look at Saudi and Iraq," Hans-Christian Freitag, Baker Hughes' vice president of marketing in the Middle East told th news agency in an interview.

"Together those two countries will see an increase in activity, with projects that were on hold for some time in Iraq now starting up and rigs are being deployed."

In Iraq, work in oilfields being developed by foreign oil companies is going ahead "normally" and faster than contracted, the country's deputy prime minister for energy Hussain Al-Shahristani said.

Alasdair Shiach, vice president and managing director of Baker Hughes in Kuwait, Saudi Arabia and Bahrain told Reuters in the same interview he did not expect oil prices to go below the $80 per barrel level.

(Source: Reuters)

Clyde & Co has been appointed by Lukoil Mid-East Ltd to support them in their development of the West Qurna-2 field in Iraq. With recoverable reserves of 43 billion barrels West Qurna is the second largest oil field in the world.

This is a landmark project for Lukoil, representing as it does a planned production capacity of 1.8 mbd by 2017. This equates to more daily production than Libya currently achieves as an order of magnitude indicator. With planned investment levels of US$4.5bn over the next 3 to 5 years, and a total investment projection of US$30bn, the scale of this project for Lukoil is clear.

Commenting on the selection of Clyde & Co, Director of Legal Affairs for Lukoil Mid-East, Nikolay Isaakov said: "We are pleased to have selected Clyde & Co for a place on our panel of outside law firms for work in connection with Lukoil's operation of the West Qurna-2 field in Iraq. Clyde's major presence in the Middle East and their experience in Iraq, together with their oil and gas expertise, made them an obvious choice for us. We look forward to working with the Clyde's team on this important project."

With first oil projected for 2013 Lukoil and its IOC partner Statoil have an aggressive time table in place. As one of the world’s largest untapped oil fields, the second phase of West Qurna has known reserves of 12.9 billion barrels, and was awarded to Lukoil by Iraqi Ministry of Oil following a lengthy and keenly contested bidding process. The continuing development of this vital national asset, is indicative of the continued improvement in the national oil industry of Iraq.

If Iranian President Mahmoud Ahmadinejad doesn't choose a minister for the ministry to replace the Iranian Ministries of Oil and Energy, then Iraq will chair the 159th meeting of the Organization of Petroleum Exporting Countries (OPEC) in the Austrian capital Vienna next June, an oil expert has said.

Jawad Barjani, speaking to Iranian news agency, Mehr, said that OPEC names the head of the organization in alphabetical order, and therefore if Iran failed to name its new minister the responsibility would pass to Iraq.

Iran and Iraq were founding members of the organization in 1960, along with Saudi Arabia, Kuwait and Venezuela.

(Source: AKnews)