Baghdad: The new investment law, expected to be issued in Iraq soon, has led to differences of opinion in economic and political quarters. It is feared that the law will interfere with the country's sovereignty and harm the private sector, which is unable to hold its own against foreign competitors.
The law will be discussed in the Iraqi parliament during the next two months, and is expected to be approved by the end of the year.
The new law includes allowing non-Iraqi investors to have 100 per cent ownership of companies, untaxed profit transfers and 40-year rent leases. The only area exempted is the natural resource sector, which includes oil and energy.
Some political circles in Baghdad are trying their best to amend the draft law to give investors a 49 per cent ownership margin, instead of 100 per cent.
The draft, that was prepared on September 19, 2003, when Paul Bremer was the US civilian governor of Iraq, was and still is the subject of controversy. Rida Blaibel, President of the Iraqi Businessmen Association told Gulf News the private sector in Iraq will be seriously threatened if the law comes into effect.
He added that the Iraqi private sector was not equipped to face the big changes in legislation that permit foreign investments in the country.
Nussayif Jasem Al Juboury, Administration and Economy professor in the University of Baghdad, said every new law in Iraq should be regarded as an attempt to develop or amend the Iraqi economy which has suffered several setbacks resulting in the slowing down of different economic sectors. This was due to the absence of competition, as well as large and vital projects.
As a result of the econ-omic problems facing the Iraqi government, such as an increase in unemployment and shortages of internal funding for large and necessary building schemes, political circles expect the new law to be passed. This will be able to make available large funds, badly needed by the beleagauered Iraqi economy.
Mohammad Hussain, vice-president of the Iraqi Investment Bank's board of directors, told Gulf News: "The transformation from a socialist economy to a free economy implies new investment laws, and not to fear Arab and foreign partners."