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R DISCUSSION KEY REQUIREMENTS TO ATTRACT FOREIGN INVESTMENTS1. Build a constitutional state – Implement the key building blocks for an constitutional state with an independent judicial system 2. Establish an accountable civil service– Build the foundation for an efficient, effective and accountable administration Source: Press clippings“[Iraq] will be an example of a new Arab Charter that champions internal reform, greater political participation, economic openness and free trade” – Gee BushSELECTED COUTES “Iraq is a test case of the US ability to engender democracy and market economics in the middle east” – Senior US Official“The US is hoping to establish a free market economy in Iraq: … privatisation of the stateowned businesses … forming a stock market … and fundamental tax reform” – WSJIraq is likely to have an economic framework that is influenced by the US modelFOR DISCUSSION Source: Press clippings? How do the changes in Iraq affect the economic governance structures in the region and will other countries in the region be ‘forced’ to open up their economies to stay petitive?? What is the economic and political impact of a potential drop in oil prices caused by an increased in Iraq’s production and what will be the future of OPEC?? How can regional panies benefit from expected large investment requirements to rebuild Iraq and how will position themselves to capture the opportunity (., consolidation, alliances) ?KEY ISSUES FOR THE REGION FOLLOWING THE REBUILDING OF IRAQ ……which will have impact on other economies of the region FOR DISCUSSION THANK YOU 靜夜四無 鄰 ,荒居舊 業(yè)貧 。 EIU country risk report on Iraq 20232023506025351980DEVELOPMENT OF IRAQ’S REAL GDP* 1980 TO 2023Over the past decade, Iraq’s real GDP fell by 50%…USD billionESTIMATE50%GDP estimates for 2023 subject to wide variation (USD 2460 billion)*Purchasing power parity method, current pricesSource:CIA World Factbook。OVERVIEW OF THE IRAQ OPPORTUNITYDoing Business in IraqAmman, 5th June 2023Achmed AlShahrabaniMcKinsey Company, Inc.AGENDA? Overview Iraq? Economic scenarios for Iraq? Required investments AGENDA? Overview Iraq? Economic scenarios for Iraq? Required investments Total area: 437,000 m2Limited arable land? Arable land: 11%? Permanent crops: 1%? Desert: 88%Largest governates? Baghdad ()? Nineveh ()? Basra ()Varying climate (Baghdad)? Summer temp: 3550186。 Country Watch。 Institute for international Economics 25181310Saudi ArabiaGulf States excl. KuwaitKuwaitParis Club excl Russia, France8Russia8France2USA3Commercial Bank Creditors2Bulgaria2Poland, Czech, Romania1Multilateral Institutions1Yugoslavia2Trade Claims24OthersTotal external debt 119*1425Kuwait reparation payments 133 – 144Total claims? Iraq regarded the loans from Saudi Arabia and Kuwait as grant payments for its 1980 war against Iran CommentsCreditor Amount – principal and overdue interestESTIMATEBREAKDOWN OF IRAQI LIABILITIES – 2023Iraq’s liabilities are mainly ‘loans’ from the Gulf states granted to Iraq in the 80ties during the war with Iran(USD bn)? The IMF and World Bank are owed less than $200mSource:EIU Country profile Iraq 2023FranceAustraliaChinaJordanTop 5 import sources Top 5 exp