The Kurdish Globe
Without government guidance, foreign investors have "rarely found their way into the region."
Although the world's financial crisis--especially among European countries--has created great opportunity for Kurdistan to attract foreign investment, statistics show that the largest share of investment in Kurdistan comes from surrounding countries while Western technology and expertise have rarely found their way into the region.
According to the KRG's Board of Investment statistics, Lebanon, claiming 29 percent of the total foreign investment in Kurdistan, is at the top of the list, while Egypt and Turkey are second and third respectively. Turkey has invested in Kurdistan 7.5 times more than the U.S. and 10 times as much Germany.
Dr. Salahaddin Hussein, an economist, argues that while it is important for Kurdistan to maintain good relations with other countries in the region, it should take larger steps to reach the West and try to attract European countries' capital, technology and expertise. "The source of Turkey's technology is the West," Dr. Hussein told the Globe. "So why shouldn't we take it directly from the West?"
Although European countries have gradually started to open consulates, diplomatic, and commercial missions, and joint chambers of commerce over the past few years, these do not seem to have solved the puzzle.
Blind Aziz, head of the German-Iraqi Chamber of Commerce, continuously tries to bridge relations between German and Iraqi businesses. He says that lack of an international banking system in the region prevents German investors from transferring their capital back and forth. 'Private banks charge huge amounts for money transfers, which is not convenient for German investors. This, according to Aziz is the largest obstacle to German investment in Kurdistan.
"Another issue is the weakness of investment guides in the region," argued Aziz. "Investment opportunities are not identified clearly, and foreign investors do not exactly know what the plan of this country is."
Aziz says that despite the fact that Germany is a developed country, Kurdistan provides attractive incentives to investors including paying 20 percent of project costs and awarding free plots of land; besides, they can get loans from banks easily.
Although it is claimed that investors are given land in one month, Aziz argues that this process sometimes takes one year.
Dr. Hussein thinks that Kurdistan should not use its relations only for import purposes, but rather "we should bring in Western experience and expertise and improve manufacturing here as well."
Adding that Germany is known as the world's first country in management and administration, Hussein suggests that since this is a major problem they face in Kurdistan, "we can make use of them."
He added that KRG should have its plans and agendas to make use of its relations with foreign countries, and should know how to make use of the health care, education, agriculture and industry of those countries.
Although investors are usually respected because they invest their capital to develop a country or region and create jobs for the locals, Aziz says that in Kurdistan investors are somehow hated because they have money and make profits.
Critics argue that the kinds of projects implemented in the region are not always good and beneficial. While admitting this reality, Aziz said, "So what is the job of the monitoring committee?"