Erbil Chamber of Commerce: Secrets of Doing Business in Kurdistan

One of the missions for each chamber of commerce is to promote the business environment and talk about the opportunities. How is it to do business in Kurdistan these days? What are the major problems and challenges that still persist?

One of the most important tasks assigned to all chambers of commerce in the entire world — especially since we try our best to promote and explain our duties — is to try to encourage investors, capitalists, businessmen, traders and entrepreneurs to come here and start their own business, companies and build their facilities – on their own or with the help of the locals.

Actually, since the establishment of the government in the Kurdistan region (KRG), we tried to prepare opportunities for businesspersons to work freely and away from the tight control over the markets, leaving it an open one for them and without any limitation when it comes to trading and commerce. Because of that, and because of the stability and security in this region (unlike in other areas), we witnessed a great flow of local and international companies into Kurdistan.

In addition, we have an investment law that offers special privileges, including a privilege that allows a foreign businessperson to fully own his project without any participation of the locals regardless of the nature of that business — be it commercial, industrial o

r agricultural. This was a good approach in order to attract many foreign companies to Kurdistan.
The Erbil Chamber of Commerce & Industry’s role is to promote and support these privileges, explain them and illustrate their effects.

We do this when welcoming the visiting envoys to our region or during our visits to other chambers and organizations abroad. We also explain our point-of-views during our participations in international conferences, and we remain open to other commercial organizations around the globe inorder to explain the perspectives of commerce here along with its development and openness. 

I can openly say we have already scored many achievements in this field and we will continue to do so.

What is the outlook for the economy in 2012 and beyond, and what are the major risks you see on the horizon?

Well, the ambitions are there. The cabinet has set the budget for 2013 and it exceeds US $130 billion. We know that our region will receive a 17% share of the budget, minus the sovereign expenses. We now notice a big difference between this year’s budget and those from the previous years. We keep in mind that the budget will go for the plans, projects and citizens who aim to expand the commercial activities. A part of the budget will support the development of infrastructure.

We have also facilitated many investments in the past 3 years, along with many agreements to encourage investments in the oil and gas sector by giving permits and rights to international companies. We are now about to face big projects and challenges in the coming years.

There are many business delegations coming to the Kurdistan region, and yet majority of foreign investors has serious misperceptions about the country, its security situation, and the investors often view the Kurdistan region as a part of Iraq.
What is the major concern for the investors in your opinion and how do you respond to their worries?

This is a very important question. During our travels to foreign countries, we have noticed that there are many questions regarding this issue. The investors and companies express their worries concerning the security situation. However, after inviting them to visit the region, they always witness the situation on the ground and thus feel the security and stability.

We had some visitors who did not inform their families that they were to travel to the Kurdistan region, but after arriving here and witnessing the actual situation, they instantly called back telling their families of their whereabouts, stating that the area enjoys security and stability. 
The Erbil Chamber of Commerce is directly involved in erasing such misperceptions by explaining the reality of the situation and inviting many parties for a visit. We tried, over the past years, to break that wall of ice and attempt to overcome many challenges.

We also witnessed that many of the foreign countries have during the past years established their own consulates and embassies in the region, and I think 30 countries have diplomatic envoys here. This is a clear sign of improvement in this area. We also notice that the region has become a foothold or a starting point for business towards the rest of Iraq because of the security and stability we enjoy here.

A question about industry: one of the major challenges for the local industry dates back to the end of the occupation when the region opened up to the foreign competition, which is now competing against the local industry. What should be done to promote the local industry? What should be the governmental policy to further develop the local industry so that it is more competitive? 

A major problem we had faced since 2003 was the loss of control over our borders. There was no control over importing and exporting goods and no restrictions on taxes. These caused a massive flow of all sorts of goods into the region and consequently an increased competition for the few local products found here. There was a decrease in the number of industrial projects and infrastructure was damaged.

However, the new cabinet for the region is trying to promote the industrial and agricultural sectors. There were numerous meetings in the last months conducted by the local government to encourage industrial, agricultural and tourism projects. For our part, we submitted many recommendations to the local government and the regional economic board with the aim to achieve our goals, and we are still waiting for the response to these recommendations. We hope that in the near future the instructions will be issued and quickly implemented in order to encourage the local industries and to restore the old traditional crafts, or to start new ones.

What are the affects, direct and indirect, that the Erbil Chamber of Commerce & Industry has been able to generate  in terms of economic activity, in terms of employment, created by promoting the industry and business environment?

We have been trying to show the role of the Erbil Chamber of Commerce & Industry, especially after the central Iraqi government, along with the Kurdistan Regional Government (KRG), decided to follow a clear economic policy to encourage and support the private sector in order to let them lead the internal and external trading operations. This was a starting point for us and we began to push our businesspersons and companies to put more effort and sincerity to trading and commerce in every possible field, and then to expand and grow in all directions.

Nevertheless, there are still some laws and instructions that need to be amended and organized in a way that suits the open market economy, along with organizing trade and exchange operations whether to prevent competition, monopolization, fraud, or to strengthen the control over the imported goods.