Iraq Needs $7 Billion to Rebuild Industry: Minister
|July 22, 2010||Filled under Uncategorized|
by W.G. Dunlop– BAGHDAD (AFP) – Improved security is allowing Iraq to rebuild its shattered industry but up to seven billion dollars is needed to help the sector recover from years of war and sanctions, the industry minister told AFP.
“At the present estimate, I would think it will require between five and seven billion dollars (3.9 to 5.5 billion euros) of investment” to “re-invent the industrial sector in Iraq in a modern way,” Fawzi Hariri said in an interview.
“What has been spent to date has been less than one billion dollars,” said Hariri, a 52-year-old Christian member of the Kurdistan Democratic Party who has held the post since 2006.
Iraq’s industrial sector, which was once among the region’s most advanced, has been decimated by 30 years of destructive wars and sanctions.
“Probably 97 percent” of government revenue over the past several years has come from oil,” Hariri said.
Iraq fought Iran from 1980-88, invaded Kuwait in 1990 and was expelled in 1991. It was then targeted by crippling UN sanctions until the 2003 US-led invasion, which unleashed a wave of internecine violence that persists to this day.
By “2003, almost 99 percent of Iraq’s industry was at a standstill,” Hariri said. “It was either destroyed … looted or was shut down.”
Since then, some progress has been made.
“Today, over 70 percent of the factories are actually working and producing,” although “they are not working to the right capacity.”
Hariri’s ministry controls 70 companies in six sectors: construction, chemicals and petrochemicals, engineering, food, pharmaceuticals and textiles. Various other ministries own another 122 companies.
But while many companies are state owned and could theoretically be well-funded, Iraq’s myriad needs have drained the country’s coffers and created intense competition among government enterprises for scarce cash.
Security, health, education, oil and other needs “took a priority on the government budget in comparison to the needs of industry,” Hariri said.
“Therefore, we were working with very limited resources.”
Since government funding has been lacking, private-sector investment has taken on crucial importance in rehabilitating the sector.
“Due to our need (for) more funding to come in for rehabilitation and due to the lack of funding from the government … we had to go for private sector” investment, said Hariri.
There are currently at least 10 state-owned enterprises (SOEs) in joint ventures with private firms, he said.
“These are joint venture agreements based on…(More Story)
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