Gulf investments have been making a notable presence in Iraq, witnessing a higher growth rate than in previous years.
Currently, these investments are primarily focused on the energy and real estate sectors, including tourist facilities, with expectations to expand into other industrial sectors in the future.
Experts indicate that Gulf countries are planning to inject substantial investments into Iraq in the upcoming period as part of Iraq’s “Development Path” strategy.
This strategy was announced by Iraqi Prime Minister Mohammed Shia’ Al-Sudani in mid-2023, aiming to connect the large Faw Port to Turkey and onwards to Europe.
Earlier, the Kingdom of Saudi Arabia allocated $3 billion for investments in Iraq through its Public Investment Fund, and in May 2023, announced a multi-purpose project worth $1 billion.
This project, as per the final statement of the fifth session of the Saudi-Iraqi Coordination Council, includes offices, shops, and over 6000 residential units.
In June 2023, Saudi Arabia and Iraq signed an agreement to establish a massive investment project near Baghdad International Airport, valued at around $1 billion in the Rafil area close to the airport, known as “Baghdad Boulevard,” according to the Iraqi News Agency.
Furthermore, during his visit to Iraq in June last year, the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, announced after discussions between the two sides, the signing of several agreements and memorandums of understanding in the fields of infrastructure, tourism, and health.
These agreements aim to expand investment and commercial cooperation between the two countries, with Qatar committed to investing $5 billion.
Regarding the feasibility of Gulf investments in Iraq, Ali Jabar, an Iraqi specialist in economic crisis management, stated that the Gulf countries’ direction towards investing in Iraq and increasing these rates is still fluctuating due to the impact of internal security and political conditions in Iraq.
Jabar mentioned in a statement to “Sputnik” that efforts in recent years to open broader gates for Gulf investments in Iraq are advancing and retracting due to various considerations, including the security situation and political stances from both sides, which are among the drivers of investment in Iraq.
He also believes that the current timing for Gulf investments, in particular, is very appropriate, given the limited capacity of Iraqi governments to undertake large projects that meet the country’s needs, especially in the energy sector.
Iraq currently relies on a “spending economy” and the official state ministries to stimulate the internal labor market, requiring the construction and pumping of investments worth hundreds of billions, which cannot be managed by Iraqi budgets or banks alone, Jabar added.
Gulf countries have shown increased interest in Iraq’s energy sector.
Last year, Qatar acquired a 25% stake in a deal worth $27 billion led by TotalEnergies to develop oil production and gas capture, which Iraq currently flares.
In June last year, three Qatari companies signed agreements with the Iraqi National Investment Commission to develop projects valued at $9.5 billion in Iraq, including building two power stations with a total of 2400 megawatts, during the visit of the Emir of Qatar to Baghdad, according to the Qatari News Agency.
Urbacon Holding, a Qatari company, signed a memorandum of understanding worth $2.5 billion to develop two power plants with a total capacity of 2400 megawatts.