Great interest in Iraqi-German cooperation
4th Iraqi-German Business Forum 13.-14. September 2017 in Berlin
The fourth Iraqi-German economic forum showed that the economic consolidation of the country is gaining momentum. German companies are ready to get involved in the country. High-ranking government representatives spoke about current projects and reform projects.
"We do not need to overlook the fact that Iraq is having a hard time and still faces many challenges." This statement by Brigitte Zypries , Federal Minister for Economic Affairs and Energy, was approved by all speakers of the 4th Iraqi-German Business Forum. At the same time, the forum showed that not only the security situation in the country has improved, but also the economic situation. German companies thus offer great potential.
It was reaffirmed on all sides that the good Iraqi-German economic relations should quickly be restored to the formerly high level. Brigitte Zypries pledged Germany's support for reconstruction: "The future of the Iraqi people also affects us here in Europe. The Federal Government therefore supports Iraq in the necessary reconstruction process ".
In cooperation with the Iraqi Embassy, Ghorfa organized the forum. Cooperation partners were the National Investment Commission (NIC) and the Federation of Iraqi Chambers of Commerce (FICC). Dr. Peter Ramsauer , as well as the Iraqi Ambassador in Berlin, Dhia Al-Dabbass, welcomed the approximately 200 participants to the forum and encouraged them to take advantage of the great potential for reconstruction of the country. With a population of more than 36 million inhabitants and an ever better security situation, the possibilities are enormous.
A high-ranking Iraqi delegation had arrived. In addition to Brigitte Zypries, the Iraqi Minister of Planning, Salman Al-Jumayli , as well as the Minister of Electricity, Qasim Muhammad Al-Fahdawi , as well as the President of the NIC, Dr. Sami Al-Araji , on the forum. All speakers made clear that countless projects are currently being planned and that German know-how is in great demand.
Salman Al-Jumayli referred to the extensive development plans that were last created by the government. In a first five-year plan to be implemented from 2018, the phase of stabilization is about to begin. This means that roads must be opened and public services resumed in all areas. A second five-year plan, taking into account the time from 2022, has already been developed. However, these comprehensive plans can only be implemented in close cooperation with local and international companies and with foreign support. "Here we want to give the private sector the opportunity to participate intensively," said the Minister, pointing to numerous economic reforms that should reduce bureaucracy and legal certainty on the one hand. Dr. Al-Araji then gave an overview of existing projects in Iraq. Thus, in all provinces, 700 projects with a total value of 63.03 billion US dollars are currently being implemented or planned.
One of the most important areas is the energy sector, as the Iraqi energy minister Qasim Al-Fahdawi explained in his presentations. The government concentrates on three different areas: production, transport and distribution of energy. In particular, as far as production is concerned, the private sector should increasingly be involved in the future, said the Minister, stressing that recent successes have already been achieved. So just recently a new power plant near Baghdad went online. Up to 3,000 megawatts (MW) of energy can be produced here. The plant operates independently as part of a build-own-operate contract, while the state purchases electricity for the first time. Other such projects are currently under construction in Basra, as the minister explained.
The fact that companies investing in Iraq can count on the support of the German Federal Government was clarified by Federal Minister Brigitte Zypries. "The Iraqi people deserve all support," the minister said. Already at the beginning of this year, loans worth EUR 500 million were pledged for reconstruction. So far, around 50 million euros have been paid; another 100 million euros are to follow this year. However, Zypries also made it clear that the legal framework should be improved and that the currently planned reform projects should be implemented as quickly as possible. This concerns in particular the privatization of state-owned enterprises, as well as the banking industry.
The German ambassador in Baghdad, dr. Cyrill Nunn , added that the German embassy is available as a contact person. He pointed out that also at the working level a lot had happened. That had also become clear at a working meeting the day before. Significant progress had been made in discussions with the high-level Iraqi delegation that had traveled to the Forum, in particular on financing models.
The possibilities offered by both Iraqi and German companies in project financing were shown in the first session. After the welcome by the Secretary General of Ghorfa, Abdulaziz Al-Mikhlafi, the participants in the panel discussion discussed Financing and Investment. Demand for credit is high, said Faisal Al-Haimus, Chairman and Acting CEO of Trade Bank Iraq. Last year alone, 2,700 letters of credit were registered. This year, there were already 1,400 such trade loans. Demand will continue to increase, added Dawood Abd Zayer Al-Jumayli, chair of the Iraqi National Business Council, pointing to high consumption in the country. $ 150 million is said to be spent daily on consumer goods, Which 90 percent of the country must be imported. Many international banks are ready to support investment in the country with export credits. The German Euler and Hermes is a good example of this.
In their lectures, Joern Grabowski, Head of the Middle East at Euler Hermes, Bahador Ghezelbash of Commerzbank AG, and Ralph Eckle, Director of UniCredit Bank AG, Germany, explained which financing models are currently available. Although the possibilities are numerous, reforms of the legal framework are still necessary to carry out financial transactions according to international standards. However, the prerequisites for reforms are good. In the meantime, all rating agencies have changed the country's status to stable, as Ralph Eckle emphasized.
Under the title "Doing Business in Iraq - Legal Frameworks", the participants of the second session exchanged detailed information about the legal framework in the country. The high-ranking panel was commissioned by Dr. Ing. Kilian Baelz, Partner at Amereller Rechtsanwälte mbB, moderated. Dr. Sami Al-Araji initially stated that the government is particularly working to improve the framework conditions for small and medium-sized enterprises (SMEs). "The big companies, like Siemens, are there. But we are also looking for partnerships for SMEs, "said Dr. Al-Araji.
Dr. Rudolf Gridl, head of department at the Federal Ministry for Economic Affairs and Energy added that the German government supports such initiatives. He referred to the commitment of the federal government to provide loans worth EUR 500 million for the reconstruction. Jaafar Al-Hamadani, President of the Federation of Iraqi Chambers of Commerce and the Baghdad Chamber, also acknowledged that the German-Iraqi cooperation is already good. He asserted that the 18 Chambers of Commerce in the individual governorates actively support partnerships with German companies.
With Uwe Stupperich, General Manager, MG International Transports GmbH, and Peter Mayr, General Manager terramar GmbH, two company representatives took part in the discussion, whose companies have been active in Iraq for many years. Both reported on their experiences in the country and confirmed that conditions had recently improved significantly. Especially through the Investment Protection Law, the improved security situation and a strengthened industry.
An important area for the German-Iraqi cooperation is the health sector, as was clear in Session Three. Dr. Hazem Al-Jumayli, Secretary of State at the Iraqi Ministry of Health, gave an introduction to the current state of the sector. Overall, the country has 44,821 beds in 260 public hospitals. There is also pent-up demand in the pharmaceutical industry. Only 15 percent of the drugs are currently covered by domestic production. This offers investment opportunities to foreign companies in particular, which also applies to the training of healthcare professionals. This was confirmed by Professor Dr. med. Intihar Ahmed Al Shmmari, Al Mustansiriyah University's Head of Business Administration: "The institutions need more cooperation," said Al-Shmmari. A model here is the cooperation with the University of Er-long-Nuremberg. He referred to Prof. Dr. med. Dr. Sefik Alp Bahadir, Director of the Economic Institute of the University of Erlangen-Nuremberg, who in turn emphasized the good cooperation with the Iraqi partners. That large-scale partnership projects in the health sector are also being realized in the private sector Michael Fraenzel, Managing Director at Karl Kolb Gmbh & Co. KG. The company has three offices, department stores and its own infrastructure in Iraq. Numerous university laboratories and other institutions have already been equipped. which in turn emphasized the good cooperation with the Iraqi partners. That large-scale partnership projects in the health sector are also being realized in the private sector Michael Fraenzel, Managing Director at Karl Kolb Gmbh & Co. KG. The company has three offices, department stores and its own infrastructure in Iraq. Numerous university laboratories and other institutions have already been equipped. which in turn emphasized the good cooperation with the Iraqi partners. That large-scale partnership projects in the health sector are also being realized in the private sector Michael Fraenzel, Managing Director at Karl Kolb Gmbh & Co. KG. The company has three offices, department stores and its own infrastructure in Iraq. Numerous university laboratories and other institutions have already been equipped.
Infrastructure & Construction was finally discussed in session four. Moderated by Saeb Nahas, Dr. Dirk Jankowski, Managing Director, AJG Ingenieure GmbH, Amar Shubar, Partner at Management Partners UAE, and Wamidh Al Mousawi, CEO of Aliedad General Construction, with Dr. Ing. Al-Araji on potential in the construction sector. In particular, housing was one of the first priorities, Dr. Al-Araji, but also roads and bridges have to be restored and expanded, as well as schools and sanitary infrastructure.
In total, about 25,000 additional housing units would be needed in each province. The government will provide the land for that, Al-Araji. Overall, the reconstruction investment required by the Reconstruction Fund for Areas Affected by Terroristic Operations (REFAATO) is estimated at $ 100 billion, Amar Shubar said. According to estimates, 22 percent of the money went to education, 17 percent to the reconstruction of roads and bridges and 16 percent to the energy sector.
Given the great need, the fifth session was about energy supply. The discussion was moderated by Uwe Hoermann, Partner at Roland Berger Holding GmbH. Energy Minister Qasim Al-Fahdawi described the seriousness of the situation: a stable energy supply is not only essential for the reconstruction of the economy, but also for the people in the country. Although a large part of those displaced within Iraq have returned to their homes. However, it is to be feared that these would depend on tents without sufficient infrastructure and without electricity. With the new power plant in Baghdad and the planned plant in Basra, one can already see a relaxation in production capacity. But in the liberated regions, it would also be about restoring the distribution networks.
Renewable energies will also play a role in the future, said the Minister, citing an electrical output of 730 to 1,000 MW. The government is currently planning solar installations. Wind energy is not an issue. Asked by Raad Alharis, Energy Advisor at the office of the Iraqi Prime Minister, which is the most important step in the coming years, the Minister referred to the numerous contracts that were last signed, including with Siemens. Musab Alkateeb, CEO of Siemens in Iraq, confirmed that the company will increase the efficiency of various power plants in various partnership projects with the government. For example, recently a contract was signed for the installation of gas turbines in Khormala.
Bjoern Luthardt, Managing Partner of Luthardt GmbH, added that there are also investment opportunities for SMEs, especially with regard to the renewable energy sector and the distribution of energy. The Minister assured that there would be further tenders for new power plants.
The Secretary General of Ghorfa, Abdulaziz Al-Mikhlafi, ended the forum with thanks to the participants. The presence of so many high-ranking government officials, as well as entrepreneurs from Germany and Iraq into the late afternoon is a sign that German-Iraqi relations will continue to be close in the future.
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