Investors flood new Iraq agency with project deals

By Mohammed Abbas

BAGHDAD (Reuters) - Investors are flooding Iraq's new government investment agency with proposals worth tens of billions of dollars, the agency's head told Reuters this week, as violence has dropped in recent months to a four-year low.

"If you come in the beginning, you're going to get cheap labour, support and many privileges, because we want investors. Later, the chances will be less," Ahmed Ridha said in an interview with Reuters and a Lebanese magazine.

Iraq requires huge investment to rebuild after decades of wars and sanctions. Foreign direct investment in Iraq in 2006 was a mere $272 million, according to United Nations statistics.

Ridha said that the proposals lodged with the National Investment Commission included a mammoth housing and tourism project from Gulf investors in the holy Shi'ite city of Najaf.

"Security has improved in 2008 by more than 90 percent, that is what encouraged us to call on investors to invest in Iraq," Ridha said.

Politicians, religious clerics and even former insurgents are calling for investment projects to build on the security gains by providing jobs.

The commission, which was set up in December, awards investment licences and sets rules for doing business. It covers all sectors apart from oil, gas, insurance and banking.

So far, the commission has issued licences worth only $418 million, partly because it needs more documentation for some deals and also due to difficulties allocating land, Ridha said.