Business Security Information for IRAQ
General Overview:
Iraq has plenty of natural resources and growth potential,
and there are several UK companies doing business there in
a range of sectors, including power, water, health, telecoms,
oil and gas, construction and education. But the security
situation is grave (except in the Kurdish areas), and adds
considerably to the cost of doing business. Companies operating
in Iraq need to seek professional security from a reputable
provider.
The IMF estimates real growth as averaging 4% for both 2005
and 2006. In 2004 the Paris Club agreed to write off 80% of
Iraq's £60Bn debt. Iraq has the fourth largest proven
oil reserves in the world, at 10% of global reserves, and
its potential reserves are widely believed to be the largest
after Saudi Arabia. But Iraq's high dependency on oil mean
that it is vulnerable to price fluctuations, in addition to
sabotage attacks on the oil infrastructure from economically-astute
insurgents. Economic diversification is important to Iraq's
long-term development but, in the shorter term, security remains
the key to the continued revitalisation of the economy.
Iraq finally achieved a democratically-elected four-year 'government
of national unity' in June 2006, when Prime Minister Maliki
finished appointing his Cabinet. The government includes members
from all the main ethnic and sectarian elements of Iraqi society.
Its main challenges are restoring security; providing national
unity and reconciliation; improving governance and promoting
economic reform. Persistent sectarian violence will undermine
the efforts on all these fronts, and most independent observers
are pessimistic about the prospects for success, especially
given the increasing polarisation of Iraq, whose three main
confessional/ethnic groups have for centuries had their 'own'
territory (Sunnis in the centre, Shia in the south, and Kurds
in the north).
The road system in Iraq is satisfactory but the security
situation is not, especially at night. Roadside bombs are
common in many areas, and are often cunningly disguised. Foreigners,
those working for them, and commercial freight linked to the
occupation and to reconstruction are the most frequent targets
after the Coalition military. Companies engaged in reconstruction
in Iraq can benefit from a free vehicle tracking service run
on behalf of the US Department of Defense; this incorporates
the provision of a military Quick Reaction Force in the event
of attack.
The landline telephone system is defunct, but the mobile
system is growing rapidly. It provides decent coverage in
urban areas, though demand sometimes overloads the system.
However, the expansion of the service is such that this is
a decreasing problem.
The main commercial air route into Iraq is the Royal Jordanian
Airlines service from Amman to Baghdad. Terrorists are targeting
civil aviation and aircraft at BIAP have been subjected to
small arms and missiles. The road from BIAP into Baghdad is
particularly dangerous, though the airport buildings themselves
are well secured.
The absence of effective policing means that non-political
criminals can operate with impunity in many areas. In some
parts of the country the police are actively involved in terrorism
and other organised crime, and there has been a rise in the
deployment of false vehicle checkpoints from which violent
attacks have been mounted. In addition to the threat from
terrorism/kidnapping, there is also a continuing criminal
threat from car-jacking and robbery. Commercial kidnapping
is very common, and affects Iraqis nearly as much as foreigners
(partly because foreigners are usually better protected than
local residents).
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