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Oil sector investors withdraw from Iraq

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Oil sector investors withdraw from Iraq Empty Oil sector investors withdraw from Iraq

Post by claud39 on Sun Dec 22, 2019 12:56 pm

Oil sector investors withdraw from Iraq


Oil sector investors withdraw from Iraq 18395

Economy News - Baghdad:

The last remnants of smoke were still rising from the remnants of another violent night when workers arrived in the morning to save what they could save from the fires that clawed their claws in the heart of the central business district of Baghdad.

The boxes were loaded after the boxes, including the clothes and cosmetics they contained in the most active markets in the country, as a matter of urgency to the pickup trucks with the intention of transporting them away from Al-Rashid Street, that historic street which has been transformed over the past weeks into a theater of continuous violence between protesting protesters The government and the security forces.

The shops are closed on both sides of this big street, which was rippling in an uninterrupted movement after the bursts of bullets from time to time replaced the talks of trade and bargaining for the best deals.

One merchant, Salah Reda, says: “We will carry what we can carry and then leave. My goods exceed $ 1.5 million, half of which disappeared and the other half destroyed ... Who will compensate me for my loss? ”
With the entering of the Iraq uprising, which no leaders appear, its third month is now taking continuous street clashes, internet outages, roads and the camp's anxiety pose a threat to the Iraqi economy. This disturbance hit in particular the most fragile sectors, which is the private sector, where business owners face losses represented in the damage of their goods, the disruption of the markets and the reluctance of customers to spend their money for fear of what the days hide.

So far, the unrest has not seriously affected the main artery of the Iraqi economy, that is, oil, which generates 6-7 billion dollars per month, equivalent to 90 percent of the state's income, and oil exports have not faced any cuts, according to senior officials of the Ministry of Oil. Production was also not damaged by repeated sit-ins and shutdowns

The roads leading to the major oil fields in the south, where the largest volume of Iraq’s oil resources are located.

However, future investments are now under threat, says Zap Sethna, one of the founders of North Gulf Partners, an investment company with work experience in Iraq. Foreign investors are pulling out of deals in the energy sector and other sectors as well.

"We had American supporters ready to participate and to pump money into Iraq, but they turned back on their heels," says Sethna.

There are other investors who are concerned about the slow pace of talks to form the new government after the resignation of Prime Minister Adel Abdul Mahdi under the pressure of protests. It is expected that the political blocs will name a new consensus candidate during this week to assume the post of prime minister.

The reform steps taken to refer key general managers who are over the age of 60 to retirement have also caused concern among companies that have had links and working relationships with those old employees. The irony here, says Sithna, is that those things that protesters raise on the street, such as corruption, bureaucracy, and a deficit of public services, are the same ones that have been blocking investment long ago.

Two industrial officials who were in the midst of negotiations to sign lucrative energy contracts say they are backing away from those contracts "until dust is cleared," in the words of one of them. Both of these officials spoke on condition of anonymity.

The blocking of the road leading to the two main cargo shipping ports in Iraq in Umm Qasr and Khor Al-Zubayr from time to time has disrupted commercial activity for many times.

 In order to compensate for this, a large amount of imported goods have been shipped through the border crossing between northern Iraq and Turkey since late November. Hussein Ali, a potato dealer, says that delays in Umm Qasr cost him sums of up to $ 6000 per container, so he chose the overland route through northern Iraq, and it is well known that customs money from the ports is an important source of income for the state.

No accurate figures are available on the scale of the economic losses caused by the protests, because interruptions when they occur are often temporary or because it is difficult to obtain reliable data.

Major General Abdul Karim Khalaf, the military spokesman for the Prime Minister, said that the protests cost Iraq $ 6 billion within one month, but this figure is excluded, according to accounts conducted by the Associated Press, because it means that a substantial decline has affected oil revenues.

However, the effects will not be easily erased from the private sector, which is already suffering from faltering.
The World Bank had said earlier: The development of the private sector in Iraq is a necessary issue to move the effort to diversify the oil-dependent economy, in addition to creating jobs that are urgently needed. But Iraqis do not feel the incentive to take risks and entrepreneurship in light of the weak regulations and controls and the high costs of undertaking any project.

As a result of all of this, the informal sector remains largely confined to retail sales limits on a direct cash basis, and this activity is highly sensitive to fluctuations and turmoil.

Ahmed al-Tabaqqali, chief investment officer at the “IFC Fund for Iraq” says: “There is a huge informal sector that has no opportunity to join the formal sector. The workers in this sector do not have contracts or title deeds, all they have are agreements and understandings, and once this happens Something's going to fall. ”

In the Shorja market, which is the main Baghdad market for wholesale sales, merchants say they are looking at their gains and are retreating day after day since the protests began in October.

Part of that is due to the fact that customers are starting to reduce their purchases, while the other reason is that most of the disturbances happen in Al-Rashid Street, and there are most stores where they keep their goods.

In southern Iraq, I have taken increasing numbers of small and medium business owners to return to the system of monthly repayment of bank loans, says an official at the Iraqi Private Banking Association, who asked not to be named.

The growing Iraqi trade sector was also seriously affected by the massive cutoff of internet service imposed by the authorities in October and November in a failed attempt by them to quell the protests, says Mujahid Wessi, a contractor and founder of the "Kapita" company. The aforementioned company is an international incubator for business and specialized services, which was preparing to launch early next year. ”

Wessie says: People remained intimidated from the purchase even after the return of the Internet because of the situation, and since most of these materials are not essential, they choose to keep their money in their hands. Wessi adds that start-up businesses are hesitant to announce their services over the network, fearing that protesters may accuse them of being unpatriotic.

Many merchants and business owners, who have been constrained by cash resources, are laying off workers because of the worsening crisis.

“25 days have passed since I am without work,” says Muhammad Hameed, who used to work as a worker on Al-Rashid Street.       

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Oil sector investors withdraw from Iraq Empty US report: Foreign investment was not affected by the movement

Post by claud39 on Sun Dec 22, 2019 1:19 pm

[size=32]US report: Foreign investment was not affected by the movement[/size]

2019-12-22 17:17:33

[size=32]Oil sector investors withdraw from Iraq SDV.3SDV.3SDV.SDV_

Baghdad-Sharqiyah December 22: A report of the American Associated Press revealed that foreign investors started withdrawing from Iraq due to the turmoil in the country and the violence and sabotage that accompanied it.

 The Associated Press said in a report that the repercussions of the popular protests in Iraq have not yet seriously affected the The main artery of the Iraqi economy, i.e. oil equivalent to 90 percent of the state’s income, and oil exports did not face any cuts, officials at the Ministry of Oil said, and the agency quoted foreign investment companies as saying that foreign investors began withdrawing from deals in the energy sector and from the sector Others also, while some investors are concerned about the slow pace of talks to form the new government after the resignation of Prime Minister Adel Abdel Mahdi under the pressure of protests.

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