Despite large debts, UAE invests heavily in Iraq's Kurdistan Region
The Kurdish Globe
20 December 2009
So far, more than US$6 billion has been invested in the "second Dubai"
The UAE-the Region's largest investor-considers its investments safe bets due to the growing nature and safety of Kurdistan Region.
Despite taking massive hits in the global recession, for the second year in a row, the United Arab Emirates (UAE) is the largest contributor to foreign direct investment in northern Iraq's autonomous Kurdistan Region, according to the region's investment board.
UAE largest investor in Kurdistan
With more than US$6 billion in investments, the Kurdistan Investment Board (KIB) ranks the UAE in first place, with investments mainly focused on tourism, real estate, and energy projects. The UAE tops other countries with large-scale investment projects in the area, including Kuwait, Lebanon, Turkey, UK, New Zealand, and Egypt.
"The UAE is the largest investor in our region and their contributions are only rising day after day, with more money and investments from them to follow in the near future," said Kamaran Mufti, director general of promotion, assessment, and licensing of projects at KIB. "Our region has one of the best investment laws in the Middle East, not differentiating between local and foreign investors," added Mufti. According to him, the region's good security situation and stability, together with the abundance in natural resources, a high-skilled work force, and its strategic location between Europe and the Middle East, have made Kurdistan one of the most attractive investment areas in the world.
Since the American invasion of Iraq in 2003 and the official recognition of Kurdistan Region as an autonomous territory within Iraq, the Kurdistan Regional Government (KRG) launched massive infrastructural projects across its Switzerland-sized territories. The area, which includes the provinces of Erbil, Suleimaniyah, and Duhok, has seen few acts of violence and terrorism, unlike other violent areas in the rest of Iraq.
Referred to by many as "the Other Iraq," or nicknamed "the second Dubai" by many locals, officials and foreign businessmen, Erbil, the capital of Kurdistan Region, has recently attracted hundreds of international companies from dozens of nations. In 2009, the region saw several high-level visits from UAE delegations, including the Crown Prince of Ras Al-Khaimah, Sheikh Saud Bin Saqr Al-Qassimi in June, a delegation from the Abu Dhabi-based Al-Badie Group in October, the UAE embassy in Baghdad, Abdullah Al-Shehhi in December. All delegations expressed desire to invest heavily in the lucrative Kurdistan Region market. During the last visit of Al-Shehhi to Erbil, the UAE envoy to Iraq even announced the pending arrival of large business delegations from his country to Kurdistan.
UAE companies operating in Kurdistan
UAE-based entities currently working in Kurdistan Region include Sharjah-based Crescent Petroleum and Dana GasDana GasLoading..., investing heavily in the promising Kurdish gas sector. Both companies are planning to export the region's gas via the Nabucco pipeline to Europe, weakening Russia's monopoly on the continent. Another project planned by the duo is the multibillion-dollar Kurdistan Gas City, meant to attract investment in gas-intensive industries such as petrochemicals and ceramics to the region. "Kurdistan Gas City is an enormous step forward in Dana GasDana GasLoading...' strategy across the Middle East, North Africa, and South Asia [MENASA] Region," announced Hamid Jafar, executive chairman of Dana GasDana GasLoading..., in a 2007 statement. The giant project as of now is pending government approval.
One significant UAE investment in Kurdistan also includes the management of several luxurious hotels under construction by the Millennium and Copthorne hoteliers, including a "Burj Al-Arab"-envisaged hotel, Grand Millennium Suleimaniyah, claiming to be the most luxurious hotel in Iraq, will open at the end of 2010. The agreement was signed during the visit of the Millennium and Copthorne delegation to the city of Suleimaniyah in October this year, which included the CEO of Millennium Hotels Middle East, Emirati national, Ali Hamad Lakhraim. "This is a great opportunity for us to expand our established base in the region," noted Lakhraim during his visit.
Other notable investments include the building of a Cargo Village at Suleimaniyah International Airport by UAE-based Gulf Mar, costing around US$120 million.
Furthermore, the UAE is also investing in Kurdistan's vital agriculture sector, with investments reaching the millions. A UAE-based company, Bin Khalid Trading Company, made nearly US$4 million in investments in agriculture in the northwestern province of Duhok, on the border with Turkey. The KRG's five-year plan is to get the farms of Kurdistan up to the point where they can provide enough food for the population and then begin exporting. Already, the government is in talks to tie up with agriculture companies from Europe and the Middle East to improve the yields of the farms, and is working on a way to export directly to the UAE and other Arab Gulf states.
In the telecommunication sector, UAE's telecom giant Etisalat (one of the top-10 telecommunication companies in the world) is also eyeing entering the Iraqi market through a possible joint venture with Kurdistan-based Korek Telecom. "We hope we can reach an agreement with Etisalat, because it is a very good company within the region and they are very much interested in the Iraqi market," said Hameed Akrawi, the deputy CEO of Korek Telecom, on the sidelines of the Iraq Telecoms Conference held in London in November this year.
Damac Project cancelled
One giant project that failed because of the global financial crisis was that of Dubai-based Damac Property. The US$15.5 billion (AED 55 billion), 170-million-square-foot project called Tarin Hills, a conglomeration of residential, retail, commercial, hospitality, entertainment, health and sports components interwoven within the picturesque terrain of Erbil, was halted permanently because of the global recession. "Damac couldn't start with the Tarin Hills project because they don't have a lot of cash at this moment, mainly a result from the global financial crisis," commented an official at the Kurdistan Investment Board.
Dubai seen as a model for Erbil
On many occasions, Kurdish officials have repeated that Dubai is a model for Erbil's development, hence the nickname "the second Dubai." Massoud Barzani, the President of Iraq's Kurdistan Region, and Nechirvan Barzani, the former Prime Minister, often stated to the media that they were highly interested in Dubai as a superb model of a dynamic, fast-growing metropolis. Just like Dubai, Erbil sees an immense growth in the construction of large shopping malls, luxurious hotels, improved infrastructure (highways, airports and rail projects), increasing expatriate population, and a vibrant nightlife. Officials in Kurdistan have repeatedly asked for the opening of a UAE consulate in Erbil besides the UAE embassy in Baghdad to facilitate trade, investment, tourism, and cultural relations between both sides.
Erbil, the largest city of Kurdistan Region, has an estimated population of 2 million. This fast-developing city, soon to become the main Kurdish metropolis, lies 350 km north of the Iraqi capital of Baghdad. Kurdistan Region is regarded as the safest and most prosperous area in Iraq.
UAE investments in the rest of Iraq
UAE investments in Iraq are estimated to make up a quarter of all foreign direct investment in the country. Besides Kurdistan Region, around US$200 billion in UAE investment is expected to be poured into Baghdad and in the southern Shiite pilgrim giants of Najaf and Karbala. The oil-rich southern port city of Basra, on the Arabian Gulf, has also seen a large influx of Emirati investments.
However, the Gulf Cooperation Council member state's own property sector has taken massive hits in the global recession. Last November, Dubai World, a government-owned UAE giant with development sectors, asked for a six-month freeze on all debt payments. The announcement resulted in losses on many global stock markets and saw a decline in world oil prices.
By Mariwan Faydullah Salihi
The Kurdish Globe 2009
The Kurdish Globe
20 December 2009
So far, more than US$6 billion has been invested in the "second Dubai"
The UAE-the Region's largest investor-considers its investments safe bets due to the growing nature and safety of Kurdistan Region.
Despite taking massive hits in the global recession, for the second year in a row, the United Arab Emirates (UAE) is the largest contributor to foreign direct investment in northern Iraq's autonomous Kurdistan Region, according to the region's investment board.
UAE largest investor in Kurdistan
With more than US$6 billion in investments, the Kurdistan Investment Board (KIB) ranks the UAE in first place, with investments mainly focused on tourism, real estate, and energy projects. The UAE tops other countries with large-scale investment projects in the area, including Kuwait, Lebanon, Turkey, UK, New Zealand, and Egypt.
"The UAE is the largest investor in our region and their contributions are only rising day after day, with more money and investments from them to follow in the near future," said Kamaran Mufti, director general of promotion, assessment, and licensing of projects at KIB. "Our region has one of the best investment laws in the Middle East, not differentiating between local and foreign investors," added Mufti. According to him, the region's good security situation and stability, together with the abundance in natural resources, a high-skilled work force, and its strategic location between Europe and the Middle East, have made Kurdistan one of the most attractive investment areas in the world.
Since the American invasion of Iraq in 2003 and the official recognition of Kurdistan Region as an autonomous territory within Iraq, the Kurdistan Regional Government (KRG) launched massive infrastructural projects across its Switzerland-sized territories. The area, which includes the provinces of Erbil, Suleimaniyah, and Duhok, has seen few acts of violence and terrorism, unlike other violent areas in the rest of Iraq.
Referred to by many as "the Other Iraq," or nicknamed "the second Dubai" by many locals, officials and foreign businessmen, Erbil, the capital of Kurdistan Region, has recently attracted hundreds of international companies from dozens of nations. In 2009, the region saw several high-level visits from UAE delegations, including the Crown Prince of Ras Al-Khaimah, Sheikh Saud Bin Saqr Al-Qassimi in June, a delegation from the Abu Dhabi-based Al-Badie Group in October, the UAE embassy in Baghdad, Abdullah Al-Shehhi in December. All delegations expressed desire to invest heavily in the lucrative Kurdistan Region market. During the last visit of Al-Shehhi to Erbil, the UAE envoy to Iraq even announced the pending arrival of large business delegations from his country to Kurdistan.
UAE companies operating in Kurdistan
UAE-based entities currently working in Kurdistan Region include Sharjah-based Crescent Petroleum and Dana GasDana GasLoading..., investing heavily in the promising Kurdish gas sector. Both companies are planning to export the region's gas via the Nabucco pipeline to Europe, weakening Russia's monopoly on the continent. Another project planned by the duo is the multibillion-dollar Kurdistan Gas City, meant to attract investment in gas-intensive industries such as petrochemicals and ceramics to the region. "Kurdistan Gas City is an enormous step forward in Dana GasDana GasLoading...' strategy across the Middle East, North Africa, and South Asia [MENASA] Region," announced Hamid Jafar, executive chairman of Dana GasDana GasLoading..., in a 2007 statement. The giant project as of now is pending government approval.
One significant UAE investment in Kurdistan also includes the management of several luxurious hotels under construction by the Millennium and Copthorne hoteliers, including a "Burj Al-Arab"-envisaged hotel, Grand Millennium Suleimaniyah, claiming to be the most luxurious hotel in Iraq, will open at the end of 2010. The agreement was signed during the visit of the Millennium and Copthorne delegation to the city of Suleimaniyah in October this year, which included the CEO of Millennium Hotels Middle East, Emirati national, Ali Hamad Lakhraim. "This is a great opportunity for us to expand our established base in the region," noted Lakhraim during his visit.
Other notable investments include the building of a Cargo Village at Suleimaniyah International Airport by UAE-based Gulf Mar, costing around US$120 million.
Furthermore, the UAE is also investing in Kurdistan's vital agriculture sector, with investments reaching the millions. A UAE-based company, Bin Khalid Trading Company, made nearly US$4 million in investments in agriculture in the northwestern province of Duhok, on the border with Turkey. The KRG's five-year plan is to get the farms of Kurdistan up to the point where they can provide enough food for the population and then begin exporting. Already, the government is in talks to tie up with agriculture companies from Europe and the Middle East to improve the yields of the farms, and is working on a way to export directly to the UAE and other Arab Gulf states.
In the telecommunication sector, UAE's telecom giant Etisalat (one of the top-10 telecommunication companies in the world) is also eyeing entering the Iraqi market through a possible joint venture with Kurdistan-based Korek Telecom. "We hope we can reach an agreement with Etisalat, because it is a very good company within the region and they are very much interested in the Iraqi market," said Hameed Akrawi, the deputy CEO of Korek Telecom, on the sidelines of the Iraq Telecoms Conference held in London in November this year.
Damac Project cancelled
One giant project that failed because of the global financial crisis was that of Dubai-based Damac Property. The US$15.5 billion (AED 55 billion), 170-million-square-foot project called Tarin Hills, a conglomeration of residential, retail, commercial, hospitality, entertainment, health and sports components interwoven within the picturesque terrain of Erbil, was halted permanently because of the global recession. "Damac couldn't start with the Tarin Hills project because they don't have a lot of cash at this moment, mainly a result from the global financial crisis," commented an official at the Kurdistan Investment Board.
Dubai seen as a model for Erbil
On many occasions, Kurdish officials have repeated that Dubai is a model for Erbil's development, hence the nickname "the second Dubai." Massoud Barzani, the President of Iraq's Kurdistan Region, and Nechirvan Barzani, the former Prime Minister, often stated to the media that they were highly interested in Dubai as a superb model of a dynamic, fast-growing metropolis. Just like Dubai, Erbil sees an immense growth in the construction of large shopping malls, luxurious hotels, improved infrastructure (highways, airports and rail projects), increasing expatriate population, and a vibrant nightlife. Officials in Kurdistan have repeatedly asked for the opening of a UAE consulate in Erbil besides the UAE embassy in Baghdad to facilitate trade, investment, tourism, and cultural relations between both sides.
Erbil, the largest city of Kurdistan Region, has an estimated population of 2 million. This fast-developing city, soon to become the main Kurdish metropolis, lies 350 km north of the Iraqi capital of Baghdad. Kurdistan Region is regarded as the safest and most prosperous area in Iraq.
UAE investments in the rest of Iraq
UAE investments in Iraq are estimated to make up a quarter of all foreign direct investment in the country. Besides Kurdistan Region, around US$200 billion in UAE investment is expected to be poured into Baghdad and in the southern Shiite pilgrim giants of Najaf and Karbala. The oil-rich southern port city of Basra, on the Arabian Gulf, has also seen a large influx of Emirati investments.
However, the Gulf Cooperation Council member state's own property sector has taken massive hits in the global recession. Last November, Dubai World, a government-owned UAE giant with development sectors, asked for a six-month freeze on all debt payments. The announcement resulted in losses on many global stock markets and saw a decline in world oil prices.
By Mariwan Faydullah Salihi
The Kurdish Globe 2009