BAGHDAD CITY PROFILE
Background
Baghdad is the capital of Iraq with about 7.4 million inhabitants and is situated in the interior of the country on the river Tigris at the point where land transportation meets river transportation, and where the distance between The Tigris and the other main river of Iraq,The Euphrates, is the shortest.
Baghdad is the main transportation hub of Iraq, and is linked with the two most important neighbour countries, Jordan and Syria, with excellent highways. Connections from north to south in Iraq pass near Baghdad. The country's main airport, Baghdad International Airport, lies here as well, now back in use after more than a decade of sanctions on Iraq.
Baghdad's city structure is vast, with several centres. The main areas of activities are the quarters around Saadoun and al-Jamoun Streets, on the east bank of the Tigris.
Economy
Baghdad has for centuries been the richest and economically most important city of Iraq. This has continued to be the case even following the discovery of oil in other regions, since most of the trade is administered through Baghdad.
Since the US/British-Iraq War Baghdad has been through a period of much hardship, causing damage to both the production levels and infrastructure. But, except for governmental institutions, which have largely been dismantled and rebuilt, many of the activities of the city remain as before the war.
Baghdad has a wide variety of industries, producing leather goods, furniture, wood products, chemicals, electrical equipment, textiles, clothing, bricks, cement, tobacco, processed food and beverages. Baghdad is also the centre of financial operations and the headquarters of the Central Bank of Iraq. Most of the national bureaucracy is located here, and for the most part the state is the principal employer in Baghdad. The leading learning institutions are here as well, including three universities.
Among the industries of Baghdad are oil refineries, food-processing, tanneries and textile mills. Baghdad still has extensive production of handicrafts, like cloth, household utensils, jewellery, leather, felt and rugs.
Investment climate and opportunities
While security is still a serious concern for domestic and international businesses, sharp declines in sectarian violence and acts of terrorism throughout Iraq in 2008 were marked by an increased interest in business opportunities. This is a signal for seasoned exporters and investors that now is the time to pursue the significant business opportunities in Baghdad, Iraq’s burgeoning, sprawling capital, in almost every sector.
Corruption also remains a challenge In Baghdad. The Iraq government is trying to reduce corruption by implementing procurement standards and instituting regulations for the ministries engaging in procurements. Iraq is a signatory to the United Nations Convention Charter Against Corruption (UNCAC) and is starting the process of evaluating changes that are required to come into compliance. The government has also increased anti-corruption training to combat corruption by local and central government officials. Another problem in Baghdad is the difficulty of starting a foreign business. Iraq’s business climate concerning the ease of doing business according to the World Bank’s 2009 Doing Business Survey deteriorated over the last year.
Sector focus
Oil and gas infrastructure
After more than a decade of sanctions and years of military conflict, Iraq’s oil and gas infrastructure requires modernisation and investment. Inadequate pipeline infrastructure, a shortage of refining capacity, and other limitations on export capacity, the continuing possibility of sabotage and the absence of hydrocarbons legislation, have all led to the reluctance of the international community to expand investment in Iraq’s oil patch. As these difficulties are resolved, however, business opportunities will grow. The World Bank estimates that around $1bn in additional revenues needs to be committed annually to the oil industry just to sustain current production.
Agriculture
Modernising Iraq’s agriculture sector will be crucial to developing a diversified economy that provides sustainable employment. Agriculture is the second largest contributor to Iraq’s GDP, accounting for an estimated six- to-eight per cent of national output. Iraq was an important agricultural exporter in the 1940s and 1950s but since then its population has quadrupled; there has been under-cultivation; and available water has decreased. As with most sectors in Iraq, the agriculture sector suffers from 30 years of neglect beginning with the Iran-Iraq war coupled with continued reliance on the central planning practices of the former regime. Iraq’s main crops are wheat, barley, rice, and dates and the country imports roughly 65 percent of its basic food needs. Prospects for UK agriculture exporters include wheat, rice, poultry, meat and vegetable oil.
