ERBIL, Kurdistan Region – Kurdistan’s deputy prime minister told a visiting US trade delegation on Monday that American investment could play an important role in reforming the Kurdish economy, noting that the region offered significant opportunities.
Addressing the first US delegation of its kind in Kurdistan in three years, Qubad Talabani said that the government intends to encourage private investment by reducing red tape and introducing regulatory reforms.
The government needs to do more to make Kurdistan attractive to American investors, Talabani said, including reducing “bureaucratic hurdles.”
“We need to invest in this relationship and make Kurdistan an easier place to do business,” Talabani told the US delegates at the Erbil Chamber of Commerce.
As Kurdistan faces a triple shock of oil prices at a six-year low, an ongoing budget dispute with Baghdad and a crippling humanitarian crisis from the war with ISIS, the ailing economy is by far the region's greatest long-term challenge, Talabani noted.
Developing the US-Kurdistan business relationship was a priority for Kurdistan and would build on the already strong political and military ties between the two governments, Talabani said.
Acknowledging the extent to which the public sector dominated the Kurdish economy, he added there was enormous room for the private sector to develop in Kurdistan.
“It's a widely known fact that we have a very large government sector” Talabani explained. “Services are delivered to people via the government. We did not let the private sector develop as required.”
Currently civil servant salaries and benefits make up about 70 percent of the Kurdistan Regional Government’s (KRG’s) budget.
Erbil is keen to facilitate private sector growth in several sectors, including energy, telecommunications, information technology and agriculture, Talabani said. He singled out electricity as an area ripe for private investment.
“We are trying to withdraw from the sector,” he explained. Ongoing electricity shortages have long plagued the region. As if to illustrate the point, the power went out at one point during Talabani's address.
Undertaking regulatory reform to introduce liberal trade policies was one way the region could prosper, the US Consul General in Erbil Matthias Mitman told the conference, organized by the United States Kurdistan Business Council.
“Fostering trade growth will depend on liberalizing trade policy,” he said. “Protectionist trade policies hurt consumers and ultimately hurt the growth of economies.”
Mitman said that foreign investment needed to be matched by local investment and entrepreneurship.
“I keep hearing that Erbil is famous for its yoghurt but I haven't seen any Kurdistan yoghurt for sale in the store,” he said. “Families sell it in buckets on the side of the road.”
The trade delegation is led by the KRG’s representative to the US, Bayan Sami Abdul Rahman.
She said she encountered “eyebrows raised” when first proposing the mission.
“Who would want to visit a region that is battling the most barbaric terrorist organization in the world?” she said people asked.
But with the support of the US chamber of commerce, they were able to bring companies working in the fields of oil and gas, electricity, defence, education, health, construction and communication.
The delegation's mission to Kurdistan was “a show of faith in Kurdistan's bright future, and an investment in that future,” Abdul Rahman said.
American investment in the Kurdistan region remains relatively minor in comparison to that of neighboring countries, including Turkey, Iran and Lebanon.
Of the 3,000 foreign companies in the Kurdistan region, there are just 127 American companies registered in Erbil, according to Fedaaddin Gardy, spokesman for the Kurdistan Federation of Chambers of Commerce and Industry (KFCCI).
“With your help we will ensure that we make Kurdistan an easier place to do business,” Talabani told the delegation in his concluding remarks. “You will have an economically strong, dependable ally in the heart of the Islamic Middle East.”
Addressing the first US delegation of its kind in Kurdistan in three years, Qubad Talabani said that the government intends to encourage private investment by reducing red tape and introducing regulatory reforms.
The government needs to do more to make Kurdistan attractive to American investors, Talabani said, including reducing “bureaucratic hurdles.”
“We need to invest in this relationship and make Kurdistan an easier place to do business,” Talabani told the US delegates at the Erbil Chamber of Commerce.
As Kurdistan faces a triple shock of oil prices at a six-year low, an ongoing budget dispute with Baghdad and a crippling humanitarian crisis from the war with ISIS, the ailing economy is by far the region's greatest long-term challenge, Talabani noted.
Developing the US-Kurdistan business relationship was a priority for Kurdistan and would build on the already strong political and military ties between the two governments, Talabani said.
Acknowledging the extent to which the public sector dominated the Kurdish economy, he added there was enormous room for the private sector to develop in Kurdistan.
“It's a widely known fact that we have a very large government sector” Talabani explained. “Services are delivered to people via the government. We did not let the private sector develop as required.”
Currently civil servant salaries and benefits make up about 70 percent of the Kurdistan Regional Government’s (KRG’s) budget.
Erbil is keen to facilitate private sector growth in several sectors, including energy, telecommunications, information technology and agriculture, Talabani said. He singled out electricity as an area ripe for private investment.
“We are trying to withdraw from the sector,” he explained. Ongoing electricity shortages have long plagued the region. As if to illustrate the point, the power went out at one point during Talabani's address.
Undertaking regulatory reform to introduce liberal trade policies was one way the region could prosper, the US Consul General in Erbil Matthias Mitman told the conference, organized by the United States Kurdistan Business Council.
“Fostering trade growth will depend on liberalizing trade policy,” he said. “Protectionist trade policies hurt consumers and ultimately hurt the growth of economies.”
Mitman said that foreign investment needed to be matched by local investment and entrepreneurship.
“I keep hearing that Erbil is famous for its yoghurt but I haven't seen any Kurdistan yoghurt for sale in the store,” he said. “Families sell it in buckets on the side of the road.”
The trade delegation is led by the KRG’s representative to the US, Bayan Sami Abdul Rahman.
She said she encountered “eyebrows raised” when first proposing the mission.
“Who would want to visit a region that is battling the most barbaric terrorist organization in the world?” she said people asked.
But with the support of the US chamber of commerce, they were able to bring companies working in the fields of oil and gas, electricity, defence, education, health, construction and communication.
The delegation's mission to Kurdistan was “a show of faith in Kurdistan's bright future, and an investment in that future,” Abdul Rahman said.
American investment in the Kurdistan region remains relatively minor in comparison to that of neighboring countries, including Turkey, Iran and Lebanon.
Of the 3,000 foreign companies in the Kurdistan region, there are just 127 American companies registered in Erbil, according to Fedaaddin Gardy, spokesman for the Kurdistan Federation of Chambers of Commerce and Industry (KFCCI).
“With your help we will ensure that we make Kurdistan an easier place to do business,” Talabani told the delegation in his concluding remarks. “You will have an economically strong, dependable ally in the heart of the Islamic Middle East.”
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