Iraq profile

(Last updated: 28 Apr 2008)

Current business situation

Exporters should be aware that Australia maintains United Nations Security Council sanctions in respect of Iraq. These sanctions require Australian organisations and individuals to comply with a range of measures and, in general, also apply extraterritorially to Australian nationals overseas.

Sanctions may include export and import restrictions, prohibitions of technical assistance, training and financing, travel sanctions, and financial sanctions against specific persons and entities.

See the following Department of Foreign Affairs and Trade website for more information about sanctions: www.dfat.gov.au/un/unsc_sanctions/unsc_sanctions_whatare.html.

For information about United Nations sanctions currently in force, please see: www.dfat.gov.au/un/unsc_sanctions/index.html. 

For information about the operation of the defence and strategic goods export control regime, please see www.defence.gov.au/strategy/dtcc.

Although a good number of countries across the Middle East are relatively stable, Australians planning to travel there, or who are currently visiting or a resident there, are urged to exercise care and monitor developments that may affect their safety through the Department of Foreign Affairs and Trade's (DFAT) current general travel advice and bulletins. Individuals should take sensible precautions and ensure that travel documentation, including passports and any necessary visas, for themselves and their dependents are valid and up-to-date.

Within Iraq there is no question that personal security continues to be a major obstacle to doing business. The Government formally recommends Australians not to travel to Iraq at this time (Specific travel advice for Iraq). That said, Australian companies are securing contracts and selling into Iraq with our people and products highly-regarded. Nonetheless, the commercial operating environment remains exceptionally difficult. 

Reasonable security measures may reduce the threat of physical attack against an office or accommodation, however, movement presents a particular difficulty in that the threat of Vehicle Borne IED and abduction is pervasive. Although the intent may often be criminal toward a ransom rather than scoring political mileage and ‘being there’ can deliver high reward for high risk, the threat to any abductee’s life is manifest. Aside, there are huge liabilities with insurance cover for people and goods. Importantly and depending on the nature of product or service, companies may be able to secure business in Iraq, with some natural erosion of margin, without the need to visit. For example, many Iraqi businesses operate from neighbouring Middle East markets and we can link into them.

Australian companies intending to operate in or visit Iraq, after consulting the travel advice, are strongly advised to seek adequate security arrangements. We encourage Australian companies to consult Austrade and reputable security companies regarding individual arrangements for accommodation and security. A list can be provided by emailing robert.siy@austrade.gov.au. We strongly recommend Australian business people visiting Iraq to register their presence with the Australian Embassy in Baghdad.

Contact details for Australian Embassy in Baghdad:

Tel:+964 1 7782210 or 7782225
Fax: +964 1 7782218 

Business Service Centres

The Iraqi Business Center is a joint effort of the PCO and the Iraq Ministry of Trade.  It was previously known as the Baghdad Business Center. The Center provides on-site business counselling for both foreign and Iraqi businesses and has an informative website at www.iraqibusinesscenter.org. The Center is currently located at the Convention Center in Baghdad. Any business inquiries can be directed to businessinquiries@baghdadforum.com.

There is a new International Business Center recently opened in Kirkuk. This is in cooperation between the local government, Coalition forces, the Kirkuk Chamber of Commerce, and the Kirkuk Contractors Union. Further information is available from the The Kirkuk Business Center.

There is also another business center in Basra that provides business counselling for both foreign and Iraqi businesses. The Basra Business Center website is currently under construction. In the meantime, all inquiries for the center can be sent to commercial.enquiries.south@cpa-iq.org.

Due diligence

Companies seeking background information on Iraqi companies can approach a list of companies that provide vetting/due diligence services in Iraq. The list is available in HTML. In addition, a few security firms may offer background checks and due diligence searches.

A list of security firms is provided at www.travel.state.gov/iraq_securitycompanies.html.

A list of Iraqi attorneys and accountants is available at www.iraqcoalition.org/economy/attorneys.html.

Logistics

The Baghdad International Airport (BIAP) is accepting commercial cargo. The seaport of Umm Qasr is open to commercial traffic but priority is given to humanitarian assistance shipments. The port of Aqaba, Jordan and ports in Kuwait and Turkey are handling goods transiting to Iraq.

Many regional trucking companies are willing to ship commercial goods into Iraq from Jordan, Turkey and Kuwait, but they are charging high rates due to security concerns and empty returns.   Please contact international and regional freight forwarders and transportation firms for services available.
 
This Austrade website offers further advice and our office in Baghdad is able to advise and closely support in-market visits. In spite of the challenging security environment, Austrade remains keen to support and where practical and possible, can provide a range of services from market intelligence, represent and assist companies in negotiating and securing contracts. We would encourage Australian companies participating in bids for any major reconstruction projects to contact Robert.siy@austrade.gov.au

Country overview

Capital city:	Baghdad
Surface area:	438,000 sq km
Population:	28.5 million
Official language(s):	Arabic
Head of State:	H.E. President Mr Jalal Talabani
Head of Government:	H.E. Prime Minister Nouri Kamil al-Maliki
Australian exports to Iraq:	A$96 million
Australian imports from Iraq:	A$36 million
Iraq's principal export destinations:	USA, Italy, Canada
Iraq's principal import sources:	Syria, Turkey, USA

(Source: Department of Foreign Affairs and Trade - Country economic fact sheet)

Economic climate

The Iraqi economy has long depended on exported oil to sustain the nation. Various estimates indicate that Iraq has approximately 112 billion barrels of oil that, if accurately proven, would constitute the second largest reserve in the world after Saudi Arabia.  Existing oil fields are relatively widely dispersed, especially in the central north and south of the country.

Iraq has significant gas reserves, predominately found in conjunction with oil and hitherto largely flared rather than re-injected. However, reservoirs where gas lies predominant exist essentially untapped.  These gas reserves could either be liquefied for export or perhaps pragmatically provide a significant and sustainable energy source for electricity production, which could drive new domestic manufacturing industry or be exported.  In turn, this would free up more crude or refined oil for export.

Agriculture, with associated abundant and reliable water resources that have hitherto not been fully utilised, should become of great economic significance for Iraq.  Iraq has long been associated with major date palm production and was a leading world exporter. Iraq, as Mesopotamia, was the birthplace of many of the world’s grain crops. They have the potential to re-emerge. Cattle, sheep, goats and poultry are important too and the farm management, animal husbandry and pasture improvement necessary to build productive and sustainable herds should become important areas for development focus.

In 2008, Iraq has approved $48 billion budget to be spent on reconstructing the country. Iraq’s economic prospects have improved. Increased security has boosted domestic demand and allowed sustained oil exports from the Kirkuk oilfields. This is forecast to lift annual real GDP growth to above six per cent in 2008-09.

Key economic indicators and statistics for 2007:

• GDP – US$55.4 billion
• GDP per capita – US$1,917
• Real GDP growth – 2.8 per cent
• Inflation rate – 45 per cent

(Source: Department of Foreign Affairs and Trade - Country economic fact sheet)

Political climate

The Iraq constitution and political system is undertaking a fundamental transformation, converting from an autocratic and despotic state towards a democracy, albeit probably less pluralistic than first envisaged by the Coalition Provisional Authority.

Trade relations and statistics

Major Australian exports to Iraq (2006-07)*:

• Cheese and curd - A$2 million
• Telecommunications equipment - A$1 million

(*includes confidential items of A$92 million, estimated to be wheat)

Major Australian imports from Iraq (2006-07):

• Crude petroleum - A$36 million

(Source: Department of Foreign Affairs and Trade - Country economic fact sheet)