By Hamidreza Azizi for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Iran, Iraq forge ahead with collaboration amid US pressure

Iraqi Prime Minister Adel Abdul Mahdi visited Tehran April 6-7, his first official visit to the neighboring country since assuming office in October 2018. Accompanied by a large delegation of high-ranking Iraqi officials and representatives of the private sector, Abdul Mahdi came to Tehran at the formal invitation of Iranian President Hassan Rouhani.

Apart from meeting with Rouhani, the Iraqi leader also met with Supreme Leader Ayatollah Ali Khamenei and attended a joint meeting of the Iranian and Iraqi business sectors at the Iran Chamber of Commerce.

The visit came less than a month after Rouhani’s visit to Iraq — the first by the Iranian president since taking office in 2013 — in which the two sides reached a number of important agreements, mostly on economic issues.

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President Hassan Rouhani has called for Iran and neighbouring Iraq to expand their gas and electricity dealings and boost bilateral trade to $20 billion, state TV reported, despite difficulties caused by US sanctions against Tehran.

“The plans to export electricity and gas and hopefully oil continue and we are ready to expand these contacts not only for the two countries but also for other countries in the region,” Rouhani said after a meeting with visiting Iraqi Prime Minister Adel Abdul Mahdi, in remarks carried by state television.

In March, the United States granted Iraq a 90-day waiver exempting it from sanctions to buy energy from Iran, the latest extension allowing Baghdad to keep purchasing electricity from its neighbour.

“We hope that our plans to expand trade volume to $20 billion will be realised within the news few months or years,” Rouhani said. Iranian media reports have put the current level of trade at about $12 billion.

Rouhani expressed hope that work on building a railway linking the two countries, would begin within the next few months.

The railway project was part of deals reached during Rouhani’s March visit to Baghdad, meant to underline that Tehran still plays a dominant role in Iraq despite US efforts to isolate Iran.

Iran and Iraq fought a devastating 1980-88 war but the 2003 US-led invasion of Iraq that ousted Saddam Hussein prompted a long Sunni Islamist insurgency during which Iran’s regional sway rose at the expense of the United States.

Iraq on Saturday closed its Sheeb border crossing with Iran to travellers and trade until further notice, Iraqi security sources said, as flooding continues to submerge villages in southwestern Iran.

US President Donald Trump reimposed sanctions on Iran’s energy exports in November, citing its nuclear programme and meddling in the Middle East, but has granted waivers to several buyers to meet consumer energy needs.

Iraq relies heavily on Iranian gas to feed its power stations, importing roughly 1.5 billion standard cubic feet per day via pipelines in the south and east.

(Source: Middle East Monitor)

Sponsored by the Embassy of the Republic of Iraq in Rome, and in coordination with the Federation of Italian Industries, the Iraqi Conference on Investment and Reconstruction was held at the end of March to discuss investment opportunities and the contribution of Italian companies in the reconstruction of Iraq.

Representatives of more than 200 Italian companies witnessed the participation of the National Investment Commission (NIC), Undersecretary of the Ministry of Commerce, Directors-general, officials of oil and transport ministries, Baghdad investment, and representatives of the Federation of Chambers of Commerce from the Iraqi side and from the Italian side by Italian Undersecretary of State for Development and Economy, the Italian Ambassador in Baghdad.

The conference also witnessed the holding of meetings between the representatives of the Iraqi authorities and Italian companies to discuss investment opportunities in the fields of energy, oil, agriculture and infrastructure.

(Source: Ministry of Foreign Affairs)

By Omar Sattar for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News

The vote on a “nonbinding” draft law designed to phase out the offices of inspectors general took place March 9 in Iraq’s parliament.

The major differences between political blocs over the draft law resulted in adjournment of the discussion until the March 14 session. Following a second discussion and vote in parliament, this draft will turn into binding law.

In parallel to the draft law to phase out inspectors general offices, Prime Minister Adel Abdul Mahdi announced Jan. 29 a plan to fight rampant corruption, which includes the restructuring of the Supreme Anti-Corruption Council and 40 files on alleged corruption to be treated as a priority in the fight against financial and administrative corruption.

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By John Lee.

A new report from the World Bank Group forecasts real GDP growth (at constant market prices) of 2.8 percent this year in Iraq, increasing to 8.1 percent next year:

Iraq’s economy is gradually picking up following the deep economic strains of the last four years. Real GDP is estimated to have grown by 0.6 percent in 2018, thanks to a notable improvement in security conditions and higher oil prices, reversing the contraction of 1.7 percent seen in 2017.

The non-oil economy picked up speed and grew at 4 percent, while oil production was slightly less than 2017 in line with the OPEC+ agreement. Recently, the Iraqi economy has received a boost of confidence with the signing of several trade agreements with its neighbors.

Reconstruction efforts have been proceeding at a moderate pace. Inflation remained low at 0.4 percent in 2018, but slightly up from 2017, due to higher domestic demand in addition to rising food and transportation costs.

The economic outlook has improved due to higher oil prices and improving security situation, but constraints on capital spending will impede a recovery-driven growth acceleration. Growth is expected to spike to 8.1 percent in 2020 due mainly to higher oil output, with OPEC+ agreement coming to an end in mid- 2019.

Non-oil growth is expected to remain positive on the back of higher investment needed to rebuild the country’s damaged infrastructure network, private consumption and investment. However, the recently approved 2019 budget presents a sizable increase in recurrent spending, and unless there is a significant reorientation in fiscal policy to a comprehensive recovery approach, there will be limited fiscal space to sustain post-war recovery and longer-term development.

Higher spending together with easing oil prices will result in a high fiscal deficit projected at 5.4 percent of GDP in 2019 before narrowing down to about 3 percent throughout 2020-2021.

Lower oil prices and increased imports will cause the current account balance to turn into deficit, financed partially by international reserves decumulation.

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Iraq on Monday began issuing entry visa for Iranians free of charge in a reciprocal move under a deal reached three weeks ago.

As of Monday, Iranians travelling to Iraq could obtain visa free of charge.

The Iraqi cabinet of ministers said the decision that took effect on April 1 has been made as a reciprocal move which had been agreed upon during Iranian President Hassan Rouhani’s recent visit to Iraq.

After the conclusion of five agreements between Tehran and Baghdad on March 12, President Rouhani said the two Muslim neighbors have agreed to lift visa requirements for the citizens of both nations, including pilgrims and tourists.

“The Iraqi side currently prefers the visa regime, but there is no payment for a visa, which is a step forward in the process of facilitating the relations between the two nations,” the Iranian president has said in a landmark visit to Iraq.

(Source: Tasnim, under Creative Commons licence)

Iraqi Parliament Speaker Mohammed al-Halbusi said he hopes the United States will keep waiving sanctions on energy imports from neighboring Iran, noting that the Arab country will need to purchase electricity from the Islamic Republic for three years.

In November last year, Washington granted a 45-day waiver on electricity to the Arab country and extended it by 90 days in December after US President Donald Trump’s administration reimposed sanctions on Iran in May, following walking out of the 2015 Iran nuclear deal.

Earlier this month, the US State Department extended the 90-day waiver for the second time to let Iraq continue energy imports from Iran. The original exemption granted in December expired on March 19.

“Hopefully this waiver will be extended until Iraq can stand on its feet economically,” said Halbusi at the US Institute of Peace on a visit to Washington, where he met senior officials, including Vice President Mike Pence.

Iraq is the biggest importer of electricity from Iran. It needs more than 23,000 megawatts of electricity to meet its domestic demand but years of war following the 2003 US invasion have left its power infrastructure in tatters and a deficit of some 7,000 megawatts.

“After these three years, maybe we can see Iraq as economically independent and we won’t need to import power or electricity from a foreign country. Maybe we can address this issue after three years,” he added, Press TV reported.

At a press conference held after his speech, Halbusi warned Washington of the negative effect of “any hasty, uncalculated step to adopt policies and procedures against countries in this region.”

The electricity shortfall in the war-torn country is especially acute in the sweltering summers, which led to violent protests in Basra in September and turned into a national crisis.

Iraq’s electricity demand is expected to increase again this summer and any cuts in Iranian supplies are set to trigger more protests and reignite unrest, destabilizing the Arab country.

In addition to natural gas and electricity, Iraq imports a wide range of goods from Iran including food, agricultural products, home appliances, and air conditioners.

(Source: Tasnim, under Creative Commons licence)

By Ahmed Gomaa for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News

Cairo hosted a tripartite summit March 24, bringing together Egyptian President Abdel Fattah al-Sisi, Jordanian King Abdullah II and Iraqi Prime Minister Adel Abdul Mahdi.

The summit’s final communique underlined the importance of enhancing coordination between the three countries, and taking advantage of the potential offered by their geographical positions and common strategic and economic interests in order to combat terrorism and confront all those who support terrorist groups by funding, arming or providing safe havens and platforms, particularly in light of the victory Iraq has achieved against the Islamic State (IS).

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By John Lee.

The General Company for Land Transport (GCLT) has held a meeting with its Saudi Arabian counterpart to discuss the opening of the Arar border crossing between the two countries.

According to a statement from Iraq’s Ministry of Transport, the participants stressed the importance of the new border facility for commercial trade and religious tourism.

A report this week from Asharq al-Awsat quotes the Chairman of Saudi Arabia’s General Customs Authority, Ahmed al-Hakbani, as saying that the new crossing will be equipped with state-of-the-art technology and meet international standards, adding that he expected it to become “the top global crossing in terms of technology.”

(Sources: Iraqi Ministry of Transport, Asharq al-Awsat)

By John Lee.

Panasonic Eco Solutions has announced that it has renewed its agreement with Al Manzil Group as its authorized distributor in Iraq for all Panasonic Indoor Air Quality (IAQ) – Fan products.

According to a press release, Iraq is one of the largest markets for Panasonic IAQ-Fan products and promises immense opportunities for growth with the country currently undergoing a reconstruction phase.

(Source: Press Release)