BAGHDAD/WASHINGTON: Iraq seeks around $100 billion in foreign investment in transport, energy and agriculture as part of a plan to rebuild parts of the country and revive the economy after a three-year war on Islamic State. The government’s National Investment Commission published a list of 157 projects it will seek investment for at an International Conference for Reconstruction of Iraq to be hosted by Kuwait Feb. 12 to 14.
Some of these projects are about rebuilding destroyed facilities like Mosul’s airport, while others are new investments to strengthen and diversify the economy away from oil, said an economic advisor to Prime Minister Haider Al-Abadi. “All together, they cost about $100 billion,” the advisor, Mudhar Saleh, said. Sixteen projects carry a price tag of $500 million or more, according to the list.
Rebuilding homes, hospitals, schools, roads, businesses and telecommunications is key to providing jobs to the young, to end the displacement of hundreds of thousands of people and put an end to several decades of political and sectarian violence. Iraq declared victory over Islamic State in December, having taken back all the territory captured by the militants in 2014 and 2015. A US-led coalition supported the Iraqi forces, especially in the battle to dislodge them from Mosul, their de facto capital in northern Iraq, in July.
The United States government will not contribute funds at the conference but will instead encourage investment from the private sector and Gulf Arab allies, US and Western officials said. A US official in Baghdad said 100 US companies were participating in the conference. Three rail projects top the list: a 500-kilometer (311 mile) line from Baghdad to Basra in the south estimated to cost $13.7 billion, a line from Baghdad to Mosul in the north estimated at $8.65 billion and an $8 billion metro for the capital.
Iraq reopened to foreign investment in 2003 after the US-led invasion that toppled Saddam Hussein, but the vast majority of the billions invested went to increasing its oil and gas production. It has become the second-largest crude exporter of the Organization of Petroleum Exporting Countries, after Saudi Arabia, with a daily output of 4.4 million barrels.
At the conference, Iraq will seek investment in the downstream oil industry including in storage tanks, refineries and petrochemical plants to process its crude into plastics and fertilizers. Saleh said investments in the oil industry and agriculture will probably be easier to attract than other sectors given the country’s vast crude reserves, available land and water wealth.
Total land offered for investments to grow “strategic crops” is nearly 1,500 square kilometers (580 square miles). Iraq, one of the world’s largest wheat importers, aims to achieve self-sufficiency and possibly become a net exporter of the grain. “We feel there will be support for Iraq, from the Americans, the Europeans, the Arab countries, the United Nations, and humanitarian organizations,” said Saleh.
The US does not plan to contribute any money at the conference to fund Iraq’s reconstruction drive after the war against Islamic State forces, US and Western officials said, a move critics say could deal a new blow to American standing internationally. “We are not planning to announce anything,” a US official said on Thursday regarding financial assistance at the conference, which US Secretary of State Rex Tillerson will attend. The official, however, said Tillerson could still decide closer to the time to announce a contribution.
Washington instead is encouraging private-sector investment and counting on Iraq’s Gulf neighbors, particularly Sunni regional heavyweight Saudi Arabia, to pour in money as part of a rapprochement with Baghdad meant to reduce Shi’ite rival Iran’s influence in Iraq. President Donald Trump said during the 2016 US presidential campaign that if elected, “the era of nation-building will be ended.”
Asked if the US government will be making an announcement of contributions at the conference, State Department spokeswoman Heather Nauert said, “I am not aware of any announcements that we will be making.” “About 2,300 members of the private sector will also be joining … and talk about ways that they can help facilitate the large-scale reconstruction taking place in Iraq,” Nauert added.
Jeremy Konyndyk, who served from 2013 to 2017 as head of the US Agency for International Development’s (USAID) Office of US Foreign Disaster Assistance, said that by not contributing to reconstruction, the Trump administration could help set the stage for a new insurgency. “We have seen this movie before. There is a very real risk if the US does not put money into reconstruction, that having just won the battle, you lose the peace,” said Konyndyk, now a senior policy fellow at the Center for Global Development think tank.
Another US official pointed to the billions of dollars the United States has committed to financing loans and restoring basic services to Iraqi towns and cities in the immediate aftermath of fighting. “The immediate stabilization needs remain vast, and limited US government resources alone cannot meet these current and pressing needs, let alone consider supporting long-term reconstruction,” the US official said, speaking on condition of anonymity. The official said Washington strongly supports the conference and would “continue to work with the Government of Iraq and the international community to help address the needs of the Iraqi people as they recover and rebuild their country.”
Fifteen years after
The United States, which invaded Iraq in 2003 and toppled the late President Saddam Hussein and more recently led an international coalition fighting Islamic State, has pumped billions of dollars into Iraq. In January, the United States said it planned to provide $150 million for stabilization operations in 2018 – funds that would go to restoring basic utilities and grants to small businesses – bringing Washington’s total contribution to $265.3 million since 2015.
The US government has also provided $1.7 billion in humanitarian assistance for Iraq since 2014, making it the single largest donor to address the Iraqi crisis. “Absolutely nothing,” said a Western official, who requested anonymity because of the sensitivity of the issue, when asked whether Washington would announce any financial contributions at the conference to fund long-term reconstruction projects.
‘Sinews of a strategy’
James Jeffrey, a former US ambassador to Iraq, said the United States had already “poured billions and billions of dollars into Iraq” for the fight against Islamic State, equipping Iraqi forces and humanitarian aid. “Only the United States can organize the diplomatic, reconstruction, military and political sinews of a strategy for the international community,” Jeffrey said. “The fact that we’re not putting any money up will weaken our case, and that’s unfortunate.”
A US official in Baghdad said the American role in the Kuwait conference would be focused on opportunities “for true private-sector investment or public-private partnerships with the Iraqi government.” “What we are trying to do in Kuwait next week is to put together companies that want to look at Iraq … and possibly also talk about ways to finance projects,” added the official, speaking on condition of anonymity.
A State Department official said Washington was counting on other countries to step up, adding that more than 100 US companies would be at the event. Konyndyk, the former USAID official, said business people would want to see the risks of their investments in Iraq mitigated by US government contributions. “If the US government wants to see private-sector investment go in, they need to put skin in the game,” added Konyndyk, saying a contribution also would demonstrate American commitment to reducing Iran’s influence. – Reuters