Private Sector Development Andrew Alderson Director Finance, Economic Planning & Development CPA South

Introduction Background Background Infrastructure Infrastructure Participation Options Participation Options Structural Considerations Structural Considerations Finance Considerations Finance Considerations Contacts Contacts

Background CPA South oversees distribution of US$50m to the Cities and provinces each month in salaries and budgets to over 225,000 state employees. CPA South oversees distribution of US$50m to the Cities and provinces each month in salaries and budgets to over 225,000 state employees. AOR includes Basra, Maysan, Al Muthanna, & Dhi Qar AOR includes Basra, Maysan, Al Muthanna, & Dhi Qar Essential services – fuel, water and power have now been stabilised. Essential services – fuel, water and power have now been stabilised. Finance leads re-development of the region, followed by trade & industry initiatives. Finance leads re-development of the region, followed by trade & industry initiatives. Payment of salaries and budgets is now a successful operation in cooperation with Treasury. Payment of salaries and budgets is now a successful operation in cooperation with Treasury. Focus is now on development programmes across key sectors. Focus is now on development programmes across key sectors.

Infrastructure Economy is centrally planned and 98% state controlled – with an embryonic private sector Economy is centrally planned and 98% state controlled – with an embryonic private sector 25 Ministries nationally responsible for all economic activities 25 Ministries nationally responsible for all economic activities Sub Directorate level over 300 distinct state entities operating in south Sub Directorate level over 300 distinct state entities operating in south Significant opportunities exist at SME level Significant opportunities exist at SME level National Ministries Provincial Directorates SOEsDepartments Mixed Sector

Participation Options Management Contracts Service Contracts Leases Build-Operate-Transfer Contracts Concessions Privatisation / Divesture Build-Operate-Own Contracts Months 100% Private Investment 100% Public Investment

Structural Considerations Foreign investment permitted under CPA Order No. 39. Foreign investment permitted under CPA Order No. 39. Repatriation of funds is permitted Repatriation of funds is permitted Domestic laws still apply and Ministries and State Companies exist legally under domestic legislation Domestic laws still apply and Ministries and State Companies exist legally under domestic legislation Private Companies are beginning to flourish Private Companies are beginning to flourish Joint Ventures and Partnerships organised domestically may avoid complicated legal issues Joint Ventures and Partnerships organised domestically may avoid complicated legal issues Local business partners are essential to develop long term contacts Local business partners are essential to develop long term contacts Domestic industrial, commercial and managerial capacity constraints will create greater opportunities as re- development programme gathers pace Domestic industrial, commercial and managerial capacity constraints will create greater opportunities as re- development programme gathers pace

Finance Considerations Iraqi banking system rehabilitation continues at a pace. Iraqi banking system rehabilitation continues at a pace. LCs are available through private banks as well as international funds transfer. LCs are available through private banks as well as international funds transfer. Private banks have strong links with Kuwait & Jordan Private banks have strong links with Kuwait & Jordan EFT available through Baghdad only at present. EFT available through Baghdad only at present. Cash drives economy - activities like cheque clearing between banks remains complicated. Cash drives economy - activities like cheque clearing between banks remains complicated.

Contacts in CPA South CPA South CPA Key Staff in Economic Planning Department Key Staff in Economic Planning Department Director, Head of Department - Andrew Alderson Essential Services & Utilities – Colin McBride, Robert Apsley Finance – Pat McLoughlin Trade & Industry – Bjorn Brandzaeg, Dominique Hope and Daniela Fiori Agriculture & Irrigation – Ole Jepsen & Tim Tuckett Shipping & Ports – Peter Bingham Education – Alan Pentecost & Stuart Hills Health – Aran Maree & Giovanni Tundo

Zuhair Ali Akbar General Manager Central Bank of Iraq Basrah Branch

Content Introduction Introduction Iraqi Banking System Iraqi Banking System Currency Exchange Update Currency Exchange Update Opening a Bank Account Opening a Bank Account Doing Business in Iraq Doing Business in Iraq Parallels in other Gulf States Parallels in other Gulf States

Iraqi Banking System Existing Banks Existing Banks Central Bank Central Bank Rafidain Bank Rafidain Bank Rasheed Bank Rasheed Bank Private Banks Private Banks Specialised Banks Specialised Banks Exchange Enterprises Exchange Enterprises Currency Exchange Update Currency Exchange Update

Opening a Bank Account Regulations for opening a Bank Account Regulations for opening a Bank Account Type of Account Type of Account Personal or Corporate Account Personal or Corporate Account Registration Process Registration Process Deposit of $100,000 with Ministry of Trade Deposit of $100,000 with Ministry of Trade

Doing Business in Iraq Change in Foreign Investment Rules Change in Foreign Investment Rules CPA Order no 39 & 46 CPA Order no 39 & 46 Foreign Ownership Permitted Foreign Ownership Permitted Further regulations being prepared. Announcement expected soon. Further regulations being prepared. Announcement expected soon. Examples of other Gulf States Examples of other Gulf States