ERBIL (Kurdistan 24) – Investment in the semi-autonomous Kurdistan Region has considerably increased over the past few months, reaching $3.67 billion, local officials from the investment board said on Thursday.
The Kurdistan Region, which has witnessed ongoing prosperity and security over the past decades compared to other parts of Iraq, suffered a critical economic crisis from 2014 until 2017.
The crisis emerged in 2014 after the Federal Government of Iraq cut the Kurdistan Regional Government’s (KRG) share of the national budget. According to senior Kurdish officials, other factors had an effect as well, including the fight against the Islamic State (IS), an international drop in oil prices, and the influx of 1.8 million refugees and Internally Displaced Persons (IDPs) from Syria and other parts of Iraq to the Kurdistan Region.
In 2017, many foreign investors and companies began to leave after the KRG’s unilateral independence referendum on Sept. 25, which saw a landslide majority favor statehood, followed by Baghdad’s collective punitive measures, including embargoes and an international flight ban on the Kurdistan Region’s airports.
Relations between Erbil and Baghdad started to ease in the first few months of 2018 with airports being re-opened for international flights and the economy on the rise again.
“From the start of 2018 until now, we have 48 licensed investors investing in the region whose ventures altogether are above $3.67 billion. This shows investment considerably rising compared to 2017,” Sarbast Khidr, the director of the Data and Investigation Department at the Investment Board, told Kurdistan 24 on Thursday.
“In 2017, investment in the Kurdistan Region was $712 million. We expect the [private] investment to grow more in the coming months.”
In 2018, the Investment Board received 300 proposals for investment in the Kurdistan Region where 210 of them were approved, and 90 rejected, Khidr added.
Most of the investment in 2018 has been done by local investors who urge the KRG to pay more attention to them, the Kurdish official noted.
Local businessmen believe they can contribute more to the growth and prosperity of the Kurdish region if the KRG assists them.
“We hope that in the coming four years, the new KRG cabinet will prioritize local companies when it comes to investment in different sectors of the Kurdistan Region,” Abdulla Gardi, a local businessman, told Kurdistan 24 on Thursday.
The government should not rely on foreign investors as they might pull out from the Kurdistan Region at any time, he noted.
“We all know that when there is a little crisis in the region, foreign companies start to evacuate and leave the country. It is the local investors and companies who stay in the Kurdistan Region even during difficult times,” Gardi added.
Over the past 12 years, local and foreign investors have contributed more than $44.4 billion in different sectors of the Kurdistan Region, according to data Kurdistan 24 obtained from the Investment Board.
Within that data, $38.5 billion belonged to local companies, and $5.9 billion to foreign investors from 23 different countries.
Among the foreign investors, the United Arab Emirates was top with $3.1 billion, followed by Turkey with $1.2 billion, Lebanon’s $1 billion, Egypt at $150 million, the United States at $116 million, New Zealand with $98 million, Germany’s $24 million, Iran at $14 million, Sweden with $13 million, and the United Kingdom’s $12 million.
Over the past 12 years, 2013 was the most prosperous year for the Kurdistan Region where investment reached $10.6 billion.
Editing by Karzan Sulaivany
(Additional reporting by Diyari Shekha)