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UAE presence grows in Kurdistan
22.10.2008
By Bradley Hope
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October 22, 2008
Erbil-Hewler, Kurdistan region "Iraq", —
In a single fell swoop earlier this summer, the UAE
became the biggest source of foreign investment for
the northern region of Iraq known as Kurdistan.
The announcement by Damac Properties of a US$4.5bn
(Dh16.52bn) property development outside the capital
city of Erbil has proven to be the beginning of a
wave of investment by UAE companies looking to join
in the economic revival of Iraq.
In recent weeks, the Abu Dhabi-based property
developer, Al Maabar International, announced a
$10bn project in Baghdad and Etisalat’s chairman has
said the company would take a major stake in Korek,www.ekurd.net
the Kurdish telecom
company.
And Bunyan Real Estate, based in Dubai, has signed a
memorandum of understanding for a project in
Sulaimaniyah worth $2bn, according to Kurdish
government officials.
“The UAE is the number one country for Iraq right
now,” said Mohammed Amin Baban, a senior economic
adviser for strategic investment issues to Nechirvan
Barzani, the Kurdistan regional government’s (KRG)
prime minister. “Erbil and Kurdistan are the
crossroads into the rest of Iraq. Security is very
good and the investment laws are here.”
The Kurdish region has a semi-autonomous government
and its own army, the peshmerga, giving it more
stability than the rest of the country. But after
decades of strife with Saddam Hussein and what Kurds
like to describe as a double embargo – from Saddam
Hussein’s Baghdad and the rest of the world – the
region has a badly damaged infrastructure network.
Power is available only for about eight hours a day
and the sewerage system is ancient and
dysfunctional.
“For investors this is a virgin land,” said Herish
Muhamad, the chairman of the KRG’s Board of
Investment. “We need everything.”
Attempts to draw in foreign investors thus far have
been only relatively successful. Half-built
structures haunt the city and residents complain of
a lack of jobs and poverty. But the emergence of the
UAE as a major investor has drawn attention from
government officials,www.ekurd.net
particularly in the
agriculture sector.
“We want to renew Kurdistan to its former production
capacity,” said Othman Shwani, the minister of
planning. “This will provide food security for all
of Iraq, but we can also begin exporting to places
like the Gulf countries.”
The government’s five-year plan is to get the farms
of the Kurdish region up to the point where they can
provide enough food for the population and then
begin exporting. Already, the government is in talks
to tie up with agriculture companies from Europe to
improve the yields of the farms and is working on a
way to export directly to Dubai. One UAE company,
the Bin Khalid Trading Company, made a $3.5 million
investment into agriculture in Duhok.
Mohammed Rauf, the minister of trade, said the
government was shipping its first test samples of
the agricultural projects to Dubai next month.
“We want to establish an economic integration with
the UAE,” he said. “We have the potential to produce
a lot of agricultural produce and they need food
because they have trouble growing things there.”
The KRG was opening an Erbil Business Centre in
Dubai this year and the government had bought two
spaces at Global Village in Dubailand to promote
trade, he said.
The UAE is taking a leading role in developing the
energy sector in Kurdistan, too.
The Sharjah-based energy affiliates, Crescent
Petroleum and Dana Gas, are spending $650 million to
develop two Kurdistan gas fields, a pipeline and a
gas-processing plant in an integrated gas and
electricity development project. Late last month,www.ekurd.net
the companies started
producing gas from the Khor Mor field, located
midway between Erbil and Sulaimaniyah, at an initial
rate of 75 million cubic feet per day. They expect
to quadruple production from the field in the first
half of next year. The gas will supply two new power
stations that are in the final stages of
construction and will provide the region’s first new
electrical generating capacity to be built in 50
years.
Crescent and Dana also plan soon to inaugurate a
“Gas City” project in Kurdistan to attract
investment in gas-intensive industries such as
petrochemicals and ceramics to the region.
The government is planning greater investments in
tourism and industry with the selling point to
international companies that they can set up their
businesses in Erbil and work in the whole of Iraq.
“When we talk to people, we tell them that maybe
there are four million or five million people in
Kurdistan, but this is the gateway to the 30 million
people of Iraq,” said Mr Muhamad.
As violence slows down, more businesses are looking
at doing work in the country and making investments,
according to analysts.
Copyright, respective author or news agency,
thenational ae
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