Companies 'eye Iraq opportunities'

Iraq's investment climate was still very difficult, but companies are looking for opportunities as the country prepares for a permanent government, US Treasury Deputy Secretary Robert Kimmitt said.

'I don't think (investors) feel that the time is necessarily right right now, but no one wants to miss the opportunity that is there,' Kimmitt told the Washington-based Council of Foreign Relations.

'You're seeing a good bit of development in the north, a growing amount of development in the south, but it's just not uniform across the country. That will come over time,' he added.

An insurgency in parts of Iraq, with almost daily bombings in and around Baghdad, have hindered rebuilding efforts since the US invasion in 2003.

Iraq held a largely peaceful vote on December 15 to elect the country's first full-time government since the fall of Saddam Hussein. The government is currently being formed.

Kimmitt said the next few months would be critical for the new Iraqi government to put in place laws and a financial system in which businesses could operate without worrying about their investments.

He said Iraqi ministers were already considering ways to give foreign investors a first-hand look at investor opportunities in Iraq, especially in the petroleum sector.

'I think that certainly the government officials are very open to foreign investment, certainly discussing foreign investment, but they just don't have long-term legal authority to be making decisions particularly the laws that will be needed,' Kimmitt said.

'There has been foreign investment coming in, but not yet at a level they'll need for that to become an important part of their economy,' he added.

Kimmitt said transforming the economy into a functioning system was a high priority for the new government, including privatizing state-owned banks and other enterprises.

The International Monetary Authority last month awarded Iraq a $685 million standby credit facility -- the fund's first credit arrangement with Iraq -- designed to support the new government's economic program over the next 15 months.

The agreement is critical for Iraq's ability to borrow money overseas and to trigger a full debt reduction agreement with the Paris Club of creditor nations.

Separate government-to-government, or bilateral, debt arrangements between Iraq and GCC states have still to be ironed out and Kimmitt said he expected that to happen after the new government was in place.

'I think again (Gulf Cooperation Council states) are not going to move precipitously, but I would expect them to move after the new government is in place,' Kimmitt said.

'I talked with the Iraqis about it today ... the key thing would be to have a good information exchange between technical experts in Iraq and in the Gulf Arab States to make sure they know details of the (IMF) standby agreement and the Paris Club negotiations,' he added.-Reuters
http://www.tradearabia.com/tanews/ne...icle99061.html

Progress that you would rarely hear about in the main stream! :thumbsup: