Kurdistan: Many Sectors Attract Foreign Companies

What are your expectations for the economic developments in Kurdistan, and specially sustainable economical development of Kurdistan?

We are in Kurdistan region which is a part of Iraq, and Iraq suffered a lot in the past from wars and misfortunes, and that’s why our economy was effected after what happened in 2003.

In those times the priority was the economy, and the priority was the housing sector, because there was a severe housing crisis in Kurdistan, that’s why I think that the opinions headed mainly to improve the housing sector in Kurdistan Iraq, and now I guess after that period – after these housing projects were done in Kurdistan – the priority lies in industry, agriculture, and tourism sector.

The real estate in general has been booming since the end of the regime. What do you think of the real states sector? Is there still space for the prices to increase? 

No, I think the prices are going to stabilize at a specific level. The prices increased because of many reasons; one of these reasons was the amount of cash in the market, and also the priority was in the housing sector and that’s why the prices increased into a very high level. I think the prices are now going to stabilize at a certain limit and they will be slowly dropping down.

The problem was that the political opinions and the cash frequent are exclusively in the centre of Baghdad – in accordance to the Iraqi constitution – and that’s why the policy of the Central Bank affects the Iraqi market in general and also the market in Kurdistan. Nevertheless I think that if we work on another sectors like industry, agriculture, and tourism sector, we will be able to control and resolve this problem.

One of the major concerns of the investors is the political risk present in this region. What is your own take on this concern? Is the current stability going to persist?

Well, you know that the politics is an issue related to the current regime, so you should rather directly ask politicians. In my own opinion, the regime of Kurdistan region is trying to apply the global standards and rules to our economy.

If we reach the global standards, then the investors and employers will be more convinced. I can assure you that the regime is trying to apply these global standards everywhere possible.

What do you feel are the major challenges that the economy might experience in the future?

The challenges exist and will do so in the future as well, notably in the private sectors, but the Government is trying to decrease the number of the challenges within the governmental (public) sector. Kurdistan had been under a socialism system and laws until 2003, and now it has changed and the economy is heading towards a free economy.

Some challenges are present until now; namely a lack of motivation and terrorism in Iraq. On the other hand, Kurdistan is secure and stable. Our challenges are the remainders of what we had suffered in the past: infrastructure. Again, we are stepping ahead to reduce these challenges.

Now let us speak specifically about the contracting sector in Kurdistan. How do you feel about this sector? What is the growth potential for the contracting sector in Kurdistan?  

Contracting sector in general is very effective in Kurdistan, because Kurdistan greatly needs this sector in order to build what had been damaged during the old regime.

The contracting sector in Kurdistan is doing well, it is very active and contractors are trying to take advantage of many benefits from the foreign expertise – as our contractors work together with big or small foreign companies and they develop together several projects in Kurdistan.

The country composition of the investments coming to Kurdistan consists mainly from Lebanon, Kuwait, Egypt, the neighbouring countries. Yet we don’t see significant investments coming from United States or Europe. What does in your opinion make the rest of the world hesitate to invest in Kurdistan?

The neighbouring countries do invest because of the proximity to Kurdistan – especially Turkey – and because of the good trading policy with surrounding countries. Thus our neighbouring countries were more motivated to come to Kurdistan region, but now even the American and European companies are heading to Kurdistan region and trying to make their first steps here. I notice on weekly or monthly basis that there are new companies from France, United Kingdom, USA, and Germany. There is also a new German centre in Erbil for training.

Could you give us a brief overview of your company Sana Group?

I am the owner of Sana Group which is in general a contracting business. Sana Group has also businesses in trading and agriculture, but the main area of focus for us is the contracting sector in Kurdistan.

What is your vision for Kurdistan? You have witnessed the rise of Kurdistan, its coming from basically zero and to the current level where it is compared to Dubai by some individuals.

My vision is that Kurdistan has a very bright future. While in Dubai they have mostly trading and petrol, we in Kurdistan have petrol, trading, industry, and tourism, and we have many people available in these fields, we also have a vast territory, rain, and rivers.

There are many good and positive things about this country, and I welcome all investors to come to Kurdistan, to invest here and start their projects as there is still a lot of space for investments and further development. Kurdistan offers many benefits to investors: they don’t need to pay tax for 10 years, they can import machines etc.

How can the foreign companies enter the market in Kurdistan?

Any foreign company can establish itself here and be registered in its own name, there is no need for a partner from Kurdistan. The other way is to find a local partner in Kurdistan.

Has Sana Group done joint ventures with foreign companies?

Yes, we do sometimes cooperate with foreign companies. It’s a good business and there are always benefits for both parties. Kurdistan offers great investment opportunities in contracting, agriculture and industry sectors.

And what is the feedback you received from them?

Yes, they have benefits and they are happy, and they keep on trying to establish another joint ventures whenever and wherever possible.

The investors of course experience some frustrations – what are these? How can the local companies help the foreign companies?

It is true that every work hides problems. Kurdistan is nevertheless a good place to work, our local companies want to work and they want to work for Kurdistan. Our local companies have done a great deal of work and cooperation with Turkish, Egyptian, and Lebanese companies.

How is the mentality of the Kurdish people different from the Iraqi, Syrian or Iranian mentality?

The Kurdish people are Iraqi. The difference lies in the business. The current regime in Kurdistan is viewed positively by foreign companies. They come and help us to build up and develop, and the Kurdish companies get benefits from these foreign companies – they acquire new technology, work schemes, administration. Any investors who are willing to help the economy of Kurdistan are welcome, because by aiding Kurdistan they will also help themselves.