News from Iraq
Challenges and opportunities in emerging markets – Iraq
General Information about Iraq:
- Region: Middle East & North Africa
- Income category: Upper middle income
- Population: 36,423,395
- GNI per capita (US$): 5,550
National Carrier: Iraqi Airways (IA) founded in 1946
- Fleet size: 33
- Destinations: 38
For policy makers trying to improve their economy’s regulatory environment for business, a good place to start is to find out how it compares with the regulatory environment in other economies. Doing Business provides an aggregate ranking on the ease of doing business based on indicator sets that measure and benchmark regulations applying to domestic small to medium-size businesses through their life cycle.
The 10 topics included in the ranking in Doing Business 2017: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The labor market regulation indicators are not included in this year’s aggregate ease of doing business ranking, but the data are presented in the economy profile.
Recent Economic Developments
Nominal GDP was revised upward by 2.8 percent in 2014 and by 13.6 percent in 2015. Two thirds of that revision is the result of an upward revision of the level of construction activity in line with the evolution of public investment in 2015, and the non-oil GDP deflator, explained by the ISIS occupation since mid-2014. The balance stems from the full incorporation of KRG oil production, which had only been recorded for 2 months in 2014 and 5 months in 2015 in the national accounts previously, in line with the implementation of the budget sharing agreement.
During the first half of 2016, overall real GDP growth was robust, on the back of strong oil production, while non-oil GDP continued to contract as a result of the war with ISIS and the ongoing fiscal consolidation. Oil GDP grew by 29 percent while non-oil GDP contracted by 1 percent y-o-y in the first of 2016. In January–August, 2016, Iraq produced 4.478 million barrels per day (4.2 mbpd programmed in 2016). The federal government exported 3.246 mbpd during January–August, 2016 (3.05 mbpd programmed in 2016), at an average price of $32.9 per barrel ($34.5 programmed in 2016) and KRG exported 0.461 mbpd (0.55 mbpd programmed), at an average price of $29.6 per barrel. Additional export gains have materialized since September due to the resumption of North Oil Company exports through Kurdistan. In September, the consumer price index (CPI) increased by 1.2 percent y-o-y, but was likely underestimated because the CPI coverage excludes the areas occupied by ISIS, which were inhabited by about 20 percent of the population before the ISIS occupation.
Aviation in all that:
In 2005, 2 years after the 2003 war, Iraqi Airways resumed operations to neighboring Middle Eastern destinations and to Europe in 2009.
In May 2008, the Iraqi government signed a $2.2 billion contract with Boeing for 30 Boeing 737-800s with an option for an additional 10. It was also working on a deal involving the order of ten Boeing 787 Dreamliner aircraft which would allow for long-range service. Another contract worth $398 million was signed for ten Bombardier CRJ-900ER aircraft with ten options.
In 2014, IATA worked with Iraqi Airways (IA) to prioritize the implementation of the most needed systems and programs to help Iraqi Airways comply with the international standards and open doors for partnerships and interline agreements with regional and international airlines. Programs include;
- IATA Clearing House (ICH)
- Agency program
- And potentially BSP
Good progress has been achieved in both the ICH and agency program, although more work, collaboration and increased effort is needed for the IOSA and BSP programs. The many variables in the market are challenging but with Iraqi Airways’ commitment and dedication they will get there.
- International Monetary Fund (IMF)
- International Bank for Reconstruction and Development / The World Bank
- International Air Transport Association (IATA)