Iraq gets over $3 billion in investments from Saudi and Gulf Investment Funds
For the first time, Iraq is attracting investments from Gulf Cooperation Council countries, including Saudi Arabia. This is a major milestone, given past major differences in their opinions regarding Iraq's relationship with Iran.
Iraq's capital, Baghdad, is home to the largest Saudi investment, valued at more than $5 billion, in the real estate sector.
Earlier this year, the United Arab Emirates announced that it would expand its investment in Iraq, the first Gulf country to do so. The UAE announced its plans to expand its investments to include large real estate projects in Baghdad after 20 years of limited investments in Erbil, the capital of the autonomous Kurdistan region of Iraq.
A Qatari government announcement also announced investments in Iraq, without revealing the value of those investments. The Qatari government now joins private Qatari investors in Baghdad who have previously invested in large real estate projects.
The Saudi Public Investment Fund, the economic arm of the Saudi government, has officially announced the establishment of a new unit for investment in Iraq, with a capital of $3 billion. The fund plans on investing in infrastructure, mining, agriculture, real estate development, and financial services. To assist with these investments, the fund established a branch of the Saudi Arab Bank, the Arabi Bank of Iraq.
In addition, the Saudi-Iraqi Company was established as part of an initiative by Saudi Crown Prince Mohammed bin Salman to establish five regional companies in Jordan, Bahrain, Sudan, Iraq, and Oman.
There was a 50% growth in trade between Iraq and Saudi Arabia between 2021 and 2022, totaling $1.5 billion.
This $1 billion investment includes the largest mall in Iraq, 4,000 apartments, and 2,500 villas, announced by the Saudi ambassador to Iraq, Abdulaziz Al-Shammari.
Iraq is also being invested in by other Gulf States
The UAE has deposited $3 billion in a special fund to invest in Iraq, while Emaar announced new projects in the Iraqi capital as part of its investment efforts.
According to the source, the projects are overseen directly by the Iraqi Prime Minister's Office and are also subject to the Iraqi Investment Authority.
Saudi Arabia has signed many agreements that are now being implemented on the ground, he said.
Sinan Al-Jaber, a director in the Iraqi Ministry of Housing and Construction, told The Media Line that when we discussed trade exchange with Saudi Arabia, the Saudis agreed to invest in real estate projects and provide housing units to assist in the reconstruction of Iraq.
According to him, the country plans to offer more investment opportunities to Arab and other countries in the future.
“Land is available, with most of it within the Baghdad Governorate and the rest of the Iraqi governorates, and other projects will take place in new governorates soon,” he said. According to Al-Jaber, the recently announced real estate projects have stabilized the Iraqi real estate market, and prices have declined in some areas that have experienced irrational inflation, a significant benefit to Iraq.
"The Iraqi market is thirsty for real estate projects," Farouq Ali, a real estate consultant for Baghdad Avenue, told The Media Line. More than 1.5 million housing units are needed, including a million immediately and half a million over the next four years."
Iraqi or Turkish investors are involved in most current real estate projects, mostly Turkish companies.
However, the entry of investors from the Gulf countries is a major development that will benefit everyone, he said.
Real estate projects in Iraq are distinguished by their continuous profit stream. The government requires the real estate developer to implement the infrastructure and provide electricity, water, and municipal services. The investor provides these services for a monthly fee, which means that, unlike projects in other countries, the investor continues to profit from his continued presence.
Investing large sums of money in Iraq indicates confidence in the country's safety and stability. It is also a sign that the Middle East is making an effort to move Iraq's finances out of the hands of the West.
Ibrahim al-Janabi, an Iraqi political analyst residing abroad, told The Media Line that Saudi investments followed the Saudi-Iranian reconciliation.
"I believe the militias still control Iraq, and whenever Iran gives them orders to do so, they may undertake hostile projects toward Saudi and Gulf investments. Saudi Arabia is pumping investments to send a political message that it controls the Middle East and is the dominant country. There are major political consensuses that may change at any moment, which makes this matter relative.”
According to Al-Janabi, these projects, sponsored by the Coordination Framework government led by Iraqi Prime Minister Muhammad Shiaa al-Sudani, will benefit Iraqis. However, he also cautions that despite succeeding in attracting investments, "the truth is that political stability does not exist, and it is now relative."
The Iranian Revolutionary Guard and the Iranian Quds Force are less than 100 kilometers from these projects, so any American strike or war will directly affect them as long as there is a threat of war in the region.
To gain more allies to avoid carrying out military operations against Tehran, Iran may have approved these projects and gained their approval from the Iraqi government. The interests of Saudi Arabia, the Emirates, and Qatar will be threatened, and these countries will put pressure on the American and Israeli sides not to take any action, including a military operation against Iran’s interests and presence in Iraq."
According to Saudi political analyst Awad Al-Thunayan, Saudi Arabia is providing support to economically struggling countries, but in the form of projects instead of direct financial aid. This approach helps avoid wastage due to corruption. With Iraq currently in a phase of recovery after multiple wars since the 1980s, there is a growing understanding that economic progress is the key. However, Saudi Arabia will not invest its billions without conducting feasibility studies and gaining political consensus. These projects are more than just words on paper; they are tangible initiatives. The militias in Iraq have shifted their focus from military tactics to pursuing economic opportunities. As long as their financial interests are not threatened, there will be no armed conflicts.
This article was written by the blog publisher, Sandy Ingram, with the help of several news reports on recent investments in Iraq.
