Iraq Investment Surge: The Rise Of The Iraqi Dinar
Iraq may not have the best reputation politically. But it is one of the richest countries in terms of resources. Which makes it a little less surprising to find out that i...
Iraq may not have the best reputation politically. But it is one of the richest countries in terms of resources. Which makes it a little less surprising to find out that it attracts a lot of investors all around the world. There’s oil and reconstruction which fetches millions of Iraqi dinar yearly. And with an increasing stability in the region, foreign investments have begun to pour into the country, amounting to $45.6 billion last 2010 - $3 billion more than the figures from the previous year.
There is clearly a growing confidence in Iraq, especially among the French who currently have a 9.9% stake in Iraqi business, largely composed of oil reserves. American companies ranks next with 6.4% - a variance that was mostly attributed to the U.S. risk-averse attitude. The U.S. Chamber of Commerce, at present, recognizes the significant opportunity loss the country faces by allowing European businesses to gain more influence in Middle East oil transactions and cites it as a form of irony, in lieu of the fact that the country has been criticized for so long because of supposed “interests” in Iraqi assets.
As of 2011, there has been a small improvement in the country’s aggressiveness towards Iraqi investments with 2,251 applications for business establishment. However, Korea has made a drastic play for the market, pushing in 24% of the foreign currency introduced to the country by far. It is obvious that there is still an intensely negative and out of date perception about the country by Americans, which discourages people to exchange their dollars, buy Iraqi dinar and engage in local trade. And while all other nations are poised to take advantage of the opening, with a Turkish company winning over an $11.28 billion contract to rebuild Sadr city, America is yet to catch up to the trend and give up its position on the side lines.
Iraq is, at the moment, considering privatizing their oil refineries, with the demands rising in domestic and foreign markets. Operation expansion is a costly endeavor. And with Iraq barely on the cusps of its revitalization, it neither has the finances nor is in the condition to manage such a big industry. Deputy Oil Minister Ahmend al-Shamma acknowledges that giving all the power back to the Ministry of Trade is an obsolete way of doing business. For him, Iraq’s renovation entailed the transfer of authority to the private sector and the birth prosperous partnerships with progressive countries. With this in consideration, many speculators predict that the Iraqi dinar value will increase to 3 dinars per one US dollar in 2013. But as of the moment, the exchange rate is pegged at 1200 dinar/dollar.
Although it might not currently seem like an attractive venture as we live in the shadow of September 11 and recover from the wounds of a four year long war with Iraq, the future looks bright for business. So before you turn down having to buy Iraqi dinar and invest it in a local industry, you should do in-depth, unbiased research on the matter and decide from what you learn (maybe, even see).
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