Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Ahead of Iraq polls, oil still fuelling economic hopes  Join our daily free Newsletter

MENAFN - AFP - 28/04/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - AFP) With a budget languishing in parliament, crucial reforms on the back burner and a hamstrung private sector, prospects for Iraq's economy after Wednesday's election hinge heavily on the oil factor.

Iraq has some of the world's largest deposits of oil and gas and aims to boost energy production dramatically, but a slow-moving bureaucracy and poor infrastructure are holding it back.

Complicating things further is Baghdad's long-running dispute with the energy-rich autonomous northern Kurdish region, which has sought to sign deals with foreign firms and export without the express permission of the central government.

Any new government formed after Wednesday's parliamentary election will have its hands full with these and other challenges.

Crude oil accounts for more than 90 percent of exports and government revenues, and 70 percent of gross domestic product, according to the International Monetary Fund.

Despite calls for Iraq to do more to diversify its economy, oil still fuels the country's attempts to rebuild after decades of conflict.

"What Iraq should be focusing on is actually developing something more diverse as an economy that's less dependent on oil production," said Ayham Kamel, Middle East and North Africa Director for Eurasia Group consultancy.

"The challenge here is, given the security environment, it's very difficult to achieve that."

Only one percent of Iraq's workforce is employed in the oil sector but the industry indirectly supports countless others, with revenues in particular helping to pay salaries in the public sector.

Meanwhile private firms, outside the oil sector, often complain they are hamstrung by an ageing banking system, with few loans available and outdated laws that make it hard to set up or maintain a business.

Rampant corruption and soaring costs due to electricity shortages and deteriorating security also complicate running a business in Iraq, which is mired in its worst period of bloodshed in years.

"Iraq's economy suffers from structural weaknesses," said a World Bank report.

It noted that although the oil sector was delivering strong growth, overall economic expansion "has not been broad-based enough to make major inroads on poverty and exclusion."

"Poor governance, an inefficient and easily co-opted judiciary system, inconsistent regulations, and security issues keep Iraq at the bottom of global rankings for doing business," the report said.

- 'Ambitious' oil goals -

That leaves oil at the centre of any discussion about Iraq's economic challenges.

"The priorities (for a new government) would be dealing with the same problems that are holding the oil sector back," said Ruba Husari, editor of the website www.iraqoilforum.com.

Husari cited "the bureaucracy, the bottlenecks in infrastructure, the shortages in gas that are forcing the current government to import natural gas from neighbours" as well as disputes with the Kurdish region over energy exports.

She said Iraq's political parties had few differences on energy policy.

"But it would make a difference if they were to propose technocrats among their candidates to fill the next government's portfolios."

Most of Iraq's oil fields are concentrated in the predominantly-Shiite south of the country, though significant deposits can also be found in the northern Kurdish region as well.

Exports hit 2.8 million barrels per day in February, the highest figure in decades, with production above 3.5 million bpd.

The authorities, however, aim to expand production capacity to nine million bpd by 2017, a target the IMF and International Energy Agency have warned is ambitious.

That would increase the energy sector's share of the economy even further and, some fear, delay reforms to the broader economy.

"We have not reaped any benefits, or attracted investment, or established industry and there is no real agriculture," said Issam al-Faili, professor of politics at Baghdad's Mustansiriyah University.

"Unfortunately, over the years, the political elite were either lazy or did not find solutions, or did not have the ability."


 


AFP




  MENA News Headlines
 Mar 3 2015 - Cruise liner traffic bound for Abu Dhabi to grow 25 percentMENAFN
(MENAFN) An increase of 25 percent in cruise liners calling at Zayed Port will help to lift the number of cruise tourists by 50 percent this season, The National reported.This season above 94 vessels ...

 Mar 3 2015 - UAE non-oil business growth declines in FebruaryMENAFN
(MENAFN) Business activity growth in the UAE non-oil private sector decreased to a five-month low in February but remained strong and above the average for 2014, a corporate survey showed, The ...

 Mar 3 2015 - Kuwait Fund grants USD23.8m to irrigation project in Lao RepublicMENAFN
(MENAFN) Kuwait Fund for Arab Economic Development (KFAED) has signed a loan agreement in the city of Vientiane with the Democratic Republic of Lao, whereby the Kuwait Fund will offer the government ...

 Mar 3 2015 - Bahrain to launch USD22b development projectsMENAFN
(MENAFN) The government of Bahrain will be carrying out giant development projects with a value exceeding USD22 billion, Minister of Information said, KUNA reported.Bahrain is continuing with its ...

 Mar 3 2015 - KFAED finances USD13.47m loan to BelizeMENAFN
(MENAFN) Kuwait Fund for Arab Economic Development (KFAED) provided a USD 13.47 million loan to Belize to help in a road restoration project, a statement by the fund showed, KUNA reported.The ...

 Mar 3 2015 - FDI in Qatar posts USD30.65bMENAFN
(MENAFN) Foreign direct investments (FDI) inflow to Qatar registered USD30.65 billion at the end of 2012, a 1.2 percent growth from a year ago. Though the FDI has targeted various economic activities ...

 Mar 3 2015 - Oman's Raeco to invest USD395.75m for power expansionsMENAFN
(MENAFN) A total of USD395.75 million will be invested by Rural Areas Electricity Company (Raeco) in the next three years to raise the power generation capacity, transmission lines and distribution ...

 Mar 3 2015 - Kuwait Investment to cut US investmentMENAFN
(MENAFN) The Kuwait Investment Office (KIO), the London branch office of sovereign wealth fund Kuwait Investment Authority, is gradually reducing its overweight stance on US assets after keeping that ...

 Mar 3 2015 - Oman's NDC hits sales revenue of USD60.47m in 2014MENAFN
(MENAFN) National Detergent Co. (NDC), one of the leading FMCG companies in the sultanate, has posted total sales revenue of USD60.47 million for full-year 2014, compared with USD56.13 million a year ...

 Mar 3 2015 - 100 per cent rise in FDI expected this yearKhaleej Times
(MENAFN - Khaleej Times) Egypt expects 100 per cent increase in foreign direct investment, or FDI, during the current fiscal year compared to last year, Investment Minister Ashraf Salman said on ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help