Construction Qaiwan Towers 4DLZDQ 7RZHUV· LFRQLF WZLQ WRZHU GHVLJQHG LV D EUHDWKWDNLQJ DGGLWLRQ WR Energy WKH 6XODLPDQ\DK VN\OLQH BAZIAN OIL REFINERY 7KH VWRUH\ EXLOGLQJ LV 5HÀQHG3HWUROHXPRI,QWHUQDWLRQDO4XDOLW\ VSUHDG DFURVV  7KH UHÀQHU\ LV FXUUHQWO\ RQH RI WZR UHÀQHULHV LQ WKH .XUGLVK 640 DQG FRPSULVHV DQ UHJLRQFRQVLVWHQWO\SURGXFLQJUHÀQHGSHWUROHXPSURGXFWVRI RIÀFH WRZHU D ÀYH VWDU WKH KLJKHVW RUGHU 7KLV UHPDUNDEOH JURZWK DQG SURGXFWLYLW\ KRWHO DQG D SUHPLXP KDV HQDEOHG 4DLZDQ *URXS WR H[SDQG WKH UHÀQHU\ DQG VKRSSLQJPDOO$QLPSRU LQFUHDVH LWV RXWSXW WR  EDUUHOV D GD\ /RFDWHG  NP WDQW EXVLQHVV DQG FRP IURP6XOD\PDQL\DKWKHUHÀQHU\LVFXUUHQWO\RQHRIRQO\WZR PHUFLDO KXE WKH FDSLWDO UHÀQHULHVLQWKH.XUGLVWDQUHJLRQDQGSURGXFHVEDUUHOV H[SHQGLWXUH RQ 4DLZDQ DGD\%D]LDQ2LO5HÀQHU\LVFXUUHQWO\XQGHUJRLQJDQH[SDQ 7RZHUV LV LQ H[FHVV RI 86 VLRQ SURJUDPPH WR LQFUHDVH LWV FDSDFLW\ WR RYHU  PLOOLRQ EDUUHOVDGD\E\  Real Estate Contact Details Sulaimanyah Heights +HDGRIÀFH6XODLPDQL0DOOEXLOGLQJ,UDT 7 6XOH\PDQLH+HLJKWVLV4DLZDQ*URXS·VQHZHVWDQGWKHPRVWDPELWLRXVSURMHFWVWLOOGDWH:LWK &RQWDFW#TDLZDQJURXSFRP RXWVWDQGLQJ SURMHFWV XQGHU WKH EHOW OLNH 4DLZDQ &LW\ 6XOH\PDQLH 0DOO DQG XSFRPLQJ 'XEDL -%&-/7'XEDL32%R[8$( SURMHFWVVXFKDV4DLZDQ7RZHUVLWRQO\PDNHVVHQVHWKHQH[WVWHSLVDSURMHFWRIWKLVVWDWXUH 7 &RQWDFW#TDLZDQJURXSFRP 6XOH\PDQLH+HLJKWVZLOOEHVSUDZOHGDFURVVDSDUWPHQWXQLWVDQGYLOODVRIYDULRXV 'XEDL$/2ZDLV7RZHU'XEDL32%R[8$( VL]HV WKDW DUH DOO VSUHDG DFURVV D MDZGURSSLQJ  VTXDUH PHWHUV ,W LV GHVWLQHG WR 7 EHFRPHWKHFLW\·VPRVWSUHVWLJLRXVDQGGHVLUDEOHFRPPHUFLDODQGUHVLGHQWLDOGHYHORSPHQW 7KHFDSLWDOH[SHQGLWXUHRQWKHSURMHFWLVRYHU86PLOOLRQ

Real Estate Qaiwan City 4DLZDQ &LW\ LV D G\QDPLF WKULYLQJ FRPPXQLW\LQ6XODLPDQ\DK'HVLJQHG WR DSSHDO WR ERWK KRPH EX\HUV DQG SURSHUW\LQYHVWRUVWKHGHYHORSPHQWLV D FLW\ ZLWKLQ D FLW\ RIIHULQJ UHVLGHQWV HYHU\WKLQJWKH\QHHGIRUDIXOÀOOLQJOLIH 7KHFLW\FRQWDLQYLOODVDQGDSDUW PHQWV WKH 4DLZDQ &LW\ FRYHULQJ DQ DUHDRI640ZLWKWKHFDSLWDO H[SHQGLWXUHRQWKHSURMHFWLVRYHU86 PLOOLRQ Building Kurdistan's Future with global partnerships

Founded in Erbil, Ster Group has emerged as one of Iraq’s fastest growing conglomerates. The group’s core expertise includes construction, environmental engineering, consultancy, insurance, security, power, communication, general trading, tourism, information technology, and research. Ster Group also actively invests in a wide range of real estate projects. A leader in its domestic market, Ster Group possesses an unparalleled level of scope and experience while maintaining a global reach.

Ster Company Ster Petroleum Ster Construction Ster Security Ster Tower StarKar Insurance TarinNet Damosc Avian Water Kani Water provides a wide is an oil and gas believes that today's is a leading aims to strengthen was the first has been providing aims to strengthen aims to strengthen has been the range of all- service company well-designed provider of security its market insurance company Internet and its market its market leading producer inclusive services that offers a broad construction consulting and leadership founded in the communications leadership leadership of pure natural and support range of services projects contribute planning services, by constantly Kurdistan Region in services since 2005. by constantly by constantly mineral water in the to industrial, to the oil and gas to the economic professional security enhancing the 2004. enhancing the enhancing the Kurdistan Region commercial, and industry. growth of the personnel, explosive excellence of excellence of excellence of since 2006. government clients. Kurdistan Region. detection canine its products its products its products units, and armored through a process through a process through a process transport vehicles. of continuous of continuous of continuous reinvestment reinvestment reinvestment and innovative and innovative and innovative manufacturing manufacturing manufacturing and marketing and marketing and marketing strategies. strategies. strategies.

E-mail: [email protected] Tel: +964.66.256.9200 Gulan Street, Ster Tower, 12th Floor, Erbil, Kurdistan - Iraq Invest in Group — 7 dfr.gov.krd www.krg.org

CONTENTS

23-31 44 The Expert 32 Cengiz Candar THE REVIEW: Confidence in the Future Diplomacy & Politics 45 A New Era Masoud Barzani, The President of the Forging Ties Globally Prof. Dlawer Ala'Aldeen, Kurdistan Region President, MERI

46 The UK & Kurdistan Angus Mckee, British CG to the Kurdistan Region

47 Insight Gary Kent

48 Focus: Rwanga Sofia Barbarani 38 57 Focus: The KRG's Foreign Policy Attracting Investors Perspective Raad Zahid – CEO, Erbil Falah Mustafa Bakir, Head of the DFR Stock Exchange 34 58 Insight Leading the Way Baroness Nicholson of Nechirvan Barzani, Prime Minister of the Winterbourne Kurdistan Region 59 Trust in Me Jamal Asfour, CEO, Asia Insurance

60 Long-Term Investment 40 Paul Bailey, Managing Director, Definitus KRG Worldwide KRG Worldwide 61 Building Industrial Capacity Dilshad Shakir, CEO, 51-55 Azady Industries The Review: Business Searching for Sustainable Growth 62 Focus: AmCham in Kurdistan 36 Secure & Stable 63 Analysis Karim Sinjari, Minister of Interior Christina Bache Fidan

64 Analysis Dr. Anwar Anaid

66 Driving Growth Moh’d Fuad Anaswah, CEO, Niva Car Trading 56 67 Facilitating Boosting Trade for Growth Investment Samal Sardar, Minister of Trade & Industry Shwan Taha, Chairman, Rabee Securities

Invest in Group — 13 CONTENTS Just about as high as you can get. 68 Financing 75-81 Development When it comes to setting the standard in private jet charters, no Chawki Badr, Assistant The Review: Energy one surpasses Komar Aviation Group. For the 8th consecutive year GM, BBAC Forging Ahead we’ve been awarded the ARGUS Platinum Rating — the highest 69 Expanding Local level of safety ratings for equipment and crew experience. Market Share Nawzad Jaff, Chairman, So take to the skies with a majestic fleet of aircraft, magnificent North Bank 24-hour concierge service, and maximum peace of mind. We’ll 70 Bringing Global take you higher than ever before. Welcome aboard. Standards Nejdet Polat, Manager, 82 Erbil Branch, İş Bank 71 Retail Giant Source of Inspiration Bhupesh Malhotra, Donnie MacDonald, President & Country Country Manager, Manager, Chevron Iraq Landmark, Iraq

72 The Big Box Comes to Kurdistan Jean Marie Boixel, SI Retail 72 Rapid Expansion Christophe Durand, SI Retail 96 73 Focus: Ecocem ANALYSIS: Finding Synergy in Registering an Oil Services Unlikely Places Company in Kurdistan 84 88 Focus: 36N Bringing the Best First Mover International Practices Saad Hasan, CEO, Qaiwan Group to Kurdistan 90 Securing Industry Botan Osman, Country Director, Stirling Group

91 Shifting to Production Worldwide aircraft charters, sales, Affiliate Office Majdi Ahmad, Managing Director, Kalegran management and acquisitions. Macair Flight Support +1.949.250.1359 +964.750.386.2363 92 Changing KomarAviation.com MacAirInc.com Dynamics Bilal Wahab, AUIS Orange County | Van Nuys | Long Beach | Carlsbad Erbil, Iraq 92 Focus: 86 MNR Report 89 Global Ambitions 93 Analysis Energizing Kurdistan Alexander Dodds, E&P Executive Vice Brad Camp Baz Karim, President & CEO, Kar Group President, MOL Group 94 Analysis Shwan Zulal

14 — Kurdistan Review A MACAIR, Inc. company CONTENTS

99-107 114 Quality— 124 A Growing Trend How-To-Start-Up Mario Al-Jebouri, Investing in the Future Doing Business in the Kurdistan Region. Chairman, IKG Property Hiwa Afandi, Head of the Department of IT 115 Global Design Yassin Younis, General Manager-Kurdistan, SSH Design

116 Addressing New Developments Dean Michael, Chairman, Atconz Group

109-113 117 Luxury Landmark Rasheed Abu Hamad, The Review: General Manager, Real Estate & Construction Trillium Holding The New Trend 135 126 Connecting the Region Focus: Macair Flight Support Rebaz Kawa, CEO, TarinNet

127 Expanding Access Aram Daro Noori, General Director, GoranNet Amal Ouarid, Senior Customer 119-123 128 Building an Service Rep. IT-Enabled Society The Review: ICT Antoine Kawkabani, Stepping Forward General Manager, CIS Iraq

129 Local 139-145 Knowledge, Local The Review: Agriculture & Water Excellence in Applications Planting the Seeds Godar J. Ibrahim, CEO, Aircraft Handling Awrosoft 136 Growing Rapidly Baker Saeed Taufiq, Macair Flight Support sets the standard in superior 131-134 General Manager, Azmar Air customer service and specialized aviation services The Review: Transport Planning to Expand 137 The Hub handling as the first fixed based operation (FBO) in Oliver Mathwich, Erbil, Kurdistan Region, Iraq. Business Development Manager, dnata

Macair Flight Support / Private Jet Exclusive Handlers Erbil International Airport [email protected] | www.macairinc.com Mobile +964 750.330.2777 | Office +964.750.386.2363 Invest in Group — 17 CONTENTS Kurdistan Review 147-149 152 Educational 177-179 Keeping an eye on the alluring leaders, emerging sectors, leading companies, and rising Edge The Review: Higher Education Robert Ritchie, AUIS The Review: Tourism trends shaping the future of the Kurdistan Region of Iraq. The Game Changer Bold Plans 153 Focus: Sulaimani Forum 154 Bringing Best Practices Carl Bistany, SABIS Co-Publisher nvest in Group (IIG) is pleased to announce the release of the eight issue 155 Progress in Iof “Kurdistan Review,” which provides Higher Education fresh business perspectives and features the Khaled Salih, University alluring leaders, emerging sectors, leading of Kurdistan-Hewler 150 183-193 companies, rising trends shaping the future of 162 Focus: MSELECT the Kurdistan Region of Iraq. Training Kurdistan’s Future The Guide Department of Foreign Relations (DFR) Employee Survey The Kurdistan Region, as a rising frontier Leaders “The Guide” helps you to experience social Kurdistan Regional Government (KRG) and cultural life in the Kurdistan Region market, has remained safe, stable, and open Dr. Honar Issa, AUDK in order to better realize its dynamics. It for business in spite of the recent political 164 Building Project Leader: Niyaz Barzani (DFR) Capacity details the premium hotels, restaurants, turmoil in Iraq. The outstanding support of the Allegra Klein, MSelect health clubs, luxury brands, and shopping international community for the Region in its centers of the Kurdistan Region. Special Thanks to fight against terrorism reflects an investment in Minister Falah Mustafa Bakir 165 Workforce the future of Kurdistan and the Kurdish people. Capability The Kurdistan Regional Government is committed to creating the best possible Development business environment for foreign companies operating in Kurdistan. A favorable Ian McIntosh Investment Law and stable business environment have enabled Kurdistan to 166 Kurdistan Careers achieve economic progress across a wide variety of sectors. We truly believe the Dr. Nawzad Kameran, Kurdistan Region can serve as a beacon of economic and social progress. Kurdistan Careers The IIG team has met with government officials and key players from the 157-160 private sector to examine recent trends and developments in the Kurdistan 167 Creating a The Review: Human Capital Region. Kurdistan Review – Special Issue provides key updates relating to recent Untapped Resource Skilled Workforce developments in a variety of sectors, including Diplomacy, Business, Energy, Chris Parker, Published in February 2015 Real Estate, ICT, Transport, Higher Education, Health, Agriculture, and Tourism. Charmogen Copyright © Invest in Group 2015 Notably, “Kurdistan Review” includes IIG’s exclusive interview and analysis pieces 172 Success Story with leading players from various sectors, who discuss the business environment Andreas Ahnlund, Goldcrest Executive, Cluster C, in Kurdistan, their success stories, and key projects that are helping to promote Nordic Medical Services Be kher bi JLT, Dubai, UAE further growth in the Kurdistan Region. [email protected] We would like to express our gratitude to Minister Falah Mustafa Bakir and the 174 Lifting the www.investingroup.org DFR team for their support of our project in the Kurdistan Region of Iraq. Baseline Enjoy! Dr. Firya Peryadi, Printed by Faruk Medical City 169-171 Express Basımevi Deposite İş Merkezi, 175 Innovative A6 Blok, K: 3 No: 309, İkitelli OSB, The Review: Health Approach Başakşehir İstanbul, Turkey The Right Direction Dr. Rang Shawis, KCH All rights reserved. No part of this publication may 180 Home Away be reproduced, or transmitted in any form or by any means, electronic or mechanical, including from Home photocopy, recording, or any information storage Managing Director: Can Yirik | Production Director: Daphne Rosenstein Ghassan Dalal, and retrieval system, without prior written Rotana Erbil Creative Director: Mustafa Gülsün | Marketing Director: Rachael Walsh permission of Invest in Group. Whilst every effort Editors: Brady Jewett, Jeremy Alexiou, Matthew Thomson, Robert Sotolar has been made to ensure the accuracy of the Public Relations Alexandra Meier | Design: Catherine Bergman 181 Check In & Enjoy information contained in this publication, the Martin Kolb, publisher accept no responsibility for any errors it Contributors: Anwar Anaid, Brad Camp, Chris Parker, Divan Erbil may contain, for any loss, financial or otherwise, Christina Fidan, Gary Kent, Shwan Zulal, Sofia Barbarani sustained by any person using this publication. Researcher: Sabine Ofer | Cover Picture: Sebastian Meyer

18 — Kurdistan Review Invest in Group — 19 5 Minute Reading

THE KURDISTAN REGION $26.5B $7,000 $17.5B 6% Facts & Figures GDP GDP PER CAPITA GOv'T bUDGET INFLATION RATE

Duhok 1.3 million 3,886 MW The Kurdistan Region, Over 30 companies which borders Syria to Kurdistan has exported from 19 different countries (under construction) the west, Turkey to the over 34.5 million barrels are operating in the north, and Iran to the of oil in 2014. Area east, comprises a total Kurdistan Region 40,643 sq km area of 40,643 km2. (KRG-Administered TOTAL CAPACITY Areas) Erbil POwER GENERATION 2 million Capital Erbil

Established 1991

Status Federal Region 165 TCF 45 Billion 2 Million bpd 10BCM Slemani Government Neighbors 1.9 million Parliamentary Turkey, Syria, Iran Democracy Currency Legislative Power Iraqi Dinar 111-seat Kurdistan GAS RESERvES OIL RESERvES OIL PRODUCTION (2020) GAS ExPORTS (2020) Parliament Traffic Flow Right Population 5.3 Million Religion Growth Rate %3 Muslims, Christians, Major Trade Median Age: 20 Yazidi 2995 $3Billion $2.3Billion Partners & FDI Age Structure Time Zone Countries 0-14 years: 36% GMT +3 Over 63: 3% INvESTMENT PROJECTS UK, EU, TURKEY, LEbANON, Tel. Code Investment Law, Article 5: FOREIGN COMPANIES FDI (bANKING) JORDAN, EGYPT, IRAN, Life Expectancy +964 A Project shall be exempt from all UAE, CHINA, USA 70 Top Level Domain non-custom taxes and duties for Offical Languages .krd 10 years starting from the date of Kurdish, Arabic providing services by the Project, or Climate the date of actual production. Ethnic Groups Semi-arid Continental Kurds, Assyrians, $41.5B 8% 2.1Million 10% Chaldeans, Turkmen, Literacy Armenians, Arabs %93 TOTAL GROwTH RATE LAbOR FORCE UNEMPLOYMENT INvESTMENT(2006-2014) (2015-2016) DIPLOMACY & POLITICS THE REVIEW Diplomacy & Politics

KURDISTAN AT A GLANCE

Established 1991

First Elections 1992

4 Year Electoral Term

Next Elections 2017

Representations 14 worldwide

Diplomatic Representations in 28 Kurdistan Forging Ties Globally Despite the challenges the Kurdistan Region faced in 2014, the KRG has not retreated from its main goals– Status: Federal Region improving security in the Region and forging strong diplomatic and economic ties globally. he Kurdistan Region has made budgetary resources and ISIS terrorism Political Structure: remarkable economic and diplo- dominated the political, diplomatic, and Parliamentary Democracy Tmatic progress since 2007, achiev- economic agenda of 2014. The question of ing average yearly economic growth of how and when the KRG would be able to 8% and negotiating the establishment overcome those challenges loomed large, Capital: Erbil of 28 new diplomatic representations yet Kurdistan's political stability, secu- WE THINK OF INNOVATIVE SOLUTIONS AND TECHNOLOGIES. in the Region. Such rapid growth has rity, democratic institutions, and confi- provided an important foundation for dent foreign policy ended up paving the WE CREATE BETTER WAYS TO SERVE ENERGY NEEDS. President: the international business community, way for huge support to surmount these WE MOVE FORWARD TO CREATE VALUE FOR GENERATIONS TO COME. Masoud barzani which has successfully established itself issues from its regional and global part- in Kurdistan. Over the course of 2014, ners. Kurdistan also employed its vast DK>'ƌŽƵƉŝƐĂůĞĂĚŝŶŐŝŶƚĞƌŶĂƟŽŶĂůŽŝůĂŶĚŐĂƐĐŽŵƉĂŶLJĨƌŽŵƚŚĞŚĞĂƌƚŽĨƵƌŽƉĞǁŝƚŚƉƌĞƐĞŶĐĞŝŶŵŽƌĞ however, the KRG encountered two hydrocarbon wealth for both economic ƚŚĂŶϰϬĐŽƵŶƚƌŝĞƐ͘tĞŚĂǀĞŽǀĞƌϳϱLJĞĂƌƐ͛ĞdžƉĞƌŝĞŶĐĞ͕Ϯϵ͕ϬϬϬĞŵƉůŽLJĞĞƐŽŶϯĐŽŶƟŶĞŶƚƐ͕ĞdžƉůŽƌĂƟŽŶĂƐƐĞƚƐ Prime Minister: unexpected problems that proved to be and diplomatic ends in 2014, establish- ŝŶϭϯĐŽƵŶƚƌŝĞƐĂŶĚϭ͕ϳϬϬƐĞƌǀŝĐĞƐƚĂƟŽŶƐŝŶƵƌŽƉĞ͘ Nechirvan barzani extremely serious. Disagreements with ing itself as a major economic actor in its Baghdad over the allocation of federal region and beyond. THINK. CREATE. MOVE. Invest in Group — 23 D & P DIPLOMACY & POLITICS

Kurdistan Parliament Political Parties The Kurdistan Region is governed by Members of the Kurdistan Parliament are Kurdistan Democratic Party a unicameral legislature, the Kurdistan elected through a system of proportional Gorran Movement Thanks to the help of the internation- Parliament, which considers new leg- electoral representation. The Parliament Patriotic Union of Kurdistan al coalition against ISIS terror that has islation, scrutinizes government activ- houses 11 functional committees that Kurdistan Islamic Union formed over past year, Kurdistan's mil- ities and policy, and debates major oversee legislative issues within their pur- Kurdistan Islamic Group itary forces, the Peshmerga, have been issues before the Region. The Kurdistan view. In addition to legislating Kurdistan’s Islamic Movement of Kurdistan able to defeat the enemy and restore secu- Parliament was established in 1992 and laws and budget, the Parliament is also Socialist Democratic Party Kurdistan Communist Party rity along the borders of the Kurdistan has demonstrated its enduring com- responsible for ratifying agreements with Toilers Party Region. mitment to the democratic tradition. A foreign entities and working with the fed- Turkoman Development List Relations between Erbil and Baghdad democratic and transparent legislative eral government. Erbil Turkoman List have markedly improved under new Iraqi process, as carried out by the Kurdistan To encourage diversity, 11 seats in the Turkoman Change and Reform List Prime Minister Haider al-Abadi’s concil- Parliament, provides a foundation for Kurdistan Parliament are automatically Turkoman Movement List iatory tenure. The warming of relations regional political stability and national assigned to parties representing minority Rafidain List was most evident in the announcement at cohesion. groups in Kurdistan. Five seats are allo- Chaldean, Assyrian, & Syriac Alliance the end of 2014 of a landmark agreement Under regional electoral law, elec- cated to Turkoman representatives, five to Abna Rafidain List between Baghdad and Erbil to restore tions for the Kurdistan Parliament must Chaldean, Assyrian, and Syriac represen- Barwan Isan Mergoz Batros the Kurdistan Region’s budget and begin be held every four years. The Kurdistan tatives, and one to the Armenian commu- collaborating in the field of oil exports. Parliament shares legislative authority nity. In addition, a legal minimum quota World leaders responded enthusiastically The main goals of the 8th cabinet are with the Iraqi Council of Representatives is in place to ensure that women hold at to the temporary settlement, which also in the areas of education, health policy, least 30% of the seats in Parliament. committed Iraq’s federal government to diversifying Kurdistan’s economy to historic preservation, policing and inter- $1 billion in funding for Peshmerga forc- avoid an overreliance on natural resource nal security, transport, natural resource es. Kurdish leaders have expressed their management, environmental policy, and hope to reach a long-term agreement on exports, tackling corruption, investing tourism. The laws of the Kurdistan Region budget and oil export issues in 2015. in improved infrastructure in areas of take precedent over federal legislation in In a year marked by the terrible issues involving customs, the distribu- human consequences of ISIS brutality, transport, health, and education, ensuring tion of electricity, internal water resourc- the Region also demonstrated its tolerant equal opportunity for all citizens of es, and general planning. In addition, as and maturing democratic culture to the per Article 115 of the Iraqi Constitution, international community by opening its Kurdistan, and advancing women’s rights. all powers not explicitly reserved to doors to 1.5 million IDPs. Prime Minister Nechirvan Barzani the Iraqi federal government belong to Iraq’s regional authorities, including the Structure Kurdistan Parliament. When regional The Kurdistan Regional Government is certain areas, including allocating the political appointments made by the laws contradict federal legislation out- the autonomous governing body of the regional budget, security, education, and Kurdistan Region’s Prime Minister. The side areas specifically reserved for federal Kurdistan Region, and holds constitution- health policies, natural resources manage- KRG President has the authority to veto authorities in the Iraqi Constitution, the ally recognized authority over the gov- ment, and infrastructure development. legislation only once, and, even then, leg- Kurdistan Parliament has the authority ernorates of Erbil, Duhok, and Slemani. The President of the Kurdistan islation is merely sent back for continued to amend the application of federal laws Article 117 of the Iraqi Constitution rec- Region is elected directly by the peo- debate and possible amendment. within the Kurdistan Region. ognizes Kurdistan as a federal region of ple of Kurdistan. The President is the Masoud Barzani is the current pres- Iraq, while Article 120 vests the Kurdistan Commander-in-Chief of the Peshmerga. ident of the Kurdistan Region. His term Region with the power to draft its own The President, as established by the in office was extended by an act of the FOCUS: THE PARLIAMENT constitution and establish accompanying KP in 2005, is elected every four years Kurdistan Parliament in 2013. authorities for governance. Kurdistan’s and is legally restricted to serving two Additionally, the Kurdistan Region has May 19, 1992 25 committees oversee legislative central legislative body is the Kurdistan terms. The President appoints the an independent judicial system. It is head- The first Parliamentary and Presidential elections 11 issues within their purview Parliament, a 111-member, unicameral Prime Minister from the largest bloc in ed by a Supreme Court of Cassation, which 77 MEN 34 WOMEN MINIMUM AGE body of lawmakers. Iraq’s Constitution Parliament to form a government. The decides cases of the highest importance, identifies the Peshmerga as the Kurdistan cabinet is then approved by the Kurdistan as well as cases that have been appealed seats are assigned to parties Minimum seats in Region’s military force. The Constitution Parliament. The President’s responsibili- through lower courts. The system also has representing minority 30% 11 TOTAL111MPs Parliament held by women also gives the KRG authority to exercise ties include ratifying all laws approved by a number of lower courts that decide on groups in Kurdistan. QUOTA legislative and executive authority in the Kurdistan Parliament and approving commercial and criminal disputes.

24 — Kurdistan Review Invest in Group — 25 The eighth cabinet of the KRG was sworn into office on Kurdistan Regional Government 18 June 2014 at the Kurdistan Parliament.

1 2

3 4 5 6 7 8 9 10

11 12 13 14 15 16 17 18

19 20 21 22 23 24 25 26

1. Nechirvan Barzani, Prime Minister 15. Mahmood Salih Hama Karim, Martyrs & 23. Abdulrahim Hama Reza, Environmental 2. Qubad Talabani, Deputy Prime Minister Anfal Affairs Affairs 16. Newroz Mawlood Amin, Municipalities & 24. Fuad Hussein, Chief of Staff, Kurdistan MINISTRIES & DEPARTMENTS — Tourism Region Presidency 3. Abdulstar Majeed, Agriculture & Water 9. Rekawt Hama Rasheed, Health 17. Dr. Ashti Hawrami, Natural Resources 25. Falah Mustafa Bakir, Department of 4. Khalid Doski, Culture & Youth 10. Yousif Mohammad, Higher Education 18. Mustafa Sayid Qadir, Peshmerga Affairs Foreign Relations 5. Pishtiwan Sadiq, Education 11. Darbaz Kosrat Rasul, Housing & 19. Ali Sindi, Planning 26. Safeen Muhsin Dizayee, Department of 6. Salahaddin Babakir, Electricity Reconstruction 20. Samal Sardar, Trade & Industry Media & Information 7. Kamal Muslim, Endowment & Religious 12. Sinan Chalabi, Justice 21. Jonson Siyawash, Transport & 27. Dr. Noori O. Abdulrahman, Department of Affairs 13. Karim Sinjari, Interior Communications Coordination and Follow-up (acting) 8. Rebaz Mohammad, Finance & Economy 14. Mohammad Qadir, Labour & Social Affairs 22. Mawlood Mohyeldin, Parliamentary Affairs D & P DIPLOMACY & POLITICS

Foreign Relations The KRG’s dynamic foreign relations are Bakir, sees two main foreign policy prior- Diplomatic Missions crucial and integral components of the ities for Kurdistan in 2015. “First, we will Kurdistan Region’s economic and social make concerted efforts to ensure further Consulate Generals development. Political stability and a and continued engagement by the inter- China, France, Germany, Iran, Jordan, rapidly developing economy have giv- national community in the fight against Palestine, Russia, Turkey, UK, US en the KRG the opportunity to pursue ISIS in order to restore peace and stability an energetic and broad foreign policy. and dismantle extremists in the region,” Consulates The KRG’s primary body for directing he says. “Second, in line with the Iraqi Egypt, Hungary, UAE its foreign affairs is the Department of constitution, we will continue with our Foreign Relations (DFR). The DFR’s fore- open door foreign policy and will try to Embassy Offices most objectives are to raise the global pro- broaden our ties with countries across Korea, Netherlands, Romania, file of the Kurdistan Region, improve the the globe through establishing bilateral Sweden Region’s international ties with various relations.” In accordance with its policy of governments and international organiza- open door diplomacy, the KRG has been Embassy Consular Offices tions, and present the emerging opportu- able to forge strong ties with its neighbors Italy, Poland nities in the Kurdistan Region to regional in recent years. Moving into the future, and international actors. the KRG intends to maintain a dynamic Honorary Consulates The KRG’s foreign policy vision has foreign policy based on developing good Belarus, Brazil, Denmark, Japan, paved the way for the establishment relations with its neighbors and resolv- Slovakia, Spain of various diplomatic representations ing issues through dialogue. This will in Kurdistan. A total of 28 countries allow Kurdistan to strengthen its ability Commercial Offices have a diplomatic presence in Erbil. to develop prosperous relationships with Austria, Czech Republic, Greece Multinational bodies, including the foreign capitals throughout the world. EU, UN, ICRC, Japan International The outpouring of support from the Cooperation Agency, and the Korea international community, increasing International Cooperation Agency, also cooperation between Erbil and Baghdad have offices in Kurdistan. This signifi- on oil exports, budgetary issues, and cant diplomatic presence demonstrates military strategy, and a growing sense the confidence that foreign governments of momentum behind Peshmerga forces place in the Kurdistan Region. on the battlefield against ISIS are stoking Kurdistan is determined to work hopes that 2015 will be a year when the closely with its regional and internation- Kurdistan Region consolidates its rep- al partners in order to contribute stability, utation for growth and stability while security, and prosperity to the region. The reaching out to new partners in the inter- head of the DFR, Minister Falah Mustafa national community.

Sweden United Kingdom Germany Poland Switzerland Russia United States Austria European Union Italy France Spain Iran

KRG OFFICES WORLDWIDE Australia The KRG currently has representative offices in 14 countries.

28 — Kurdistan Review Invest in Group — 29 D & P DIPLOMACY & POLITICS

THE KURDISTAN REGION Through French President John Kerry, Philip Hammond, Lubomír Zaorálek, Foreign Ursula von der Leyen, Norwegian Foreign Swedish Foreign Minister François Hollande US Secretary of State UK Foreign Secretary Minister, Czech Republic Defence Minister, Germany Minister Børge Brendein Margot Wallstrom

the eyes “I would like to assure you “Germany has decided to “My visit is meant to clearly “Peshmerga forces have of “Kurdistan is at “The Kurdistan “The Kurdistan the forefront of the Region has that you will not be alone Region is safe and support Kurdistan because illustrate proven that they are a WORLD in your fight against ISIS. it recognizes that Kurdistan Norway’s support reliable force. fight against ISIS achieved stable. We will support LEADERS The role of the is fighting the terrorists on for the people They have been an terrorists. remarkable and assist the Kurdistan behalf of the world. We The Kurdistan France will continue to Peshmerga forces Region in confronting of the Kurdistan important element progress in the in confronting ISIS will continue to help the in the fight against Region has provide humanitarian and past ten years.” terrorist activities. KRG by providing weapons, Region demonstrated military aid to Kurdistan is heroic. The Czech Republic military equipment, in their fight against ISIS. its tolerant in its fight against ISIS The United Kingdom will is ready to help and training as well as terrorism.” There is an urgent need and maturing terrorists.” continue to work closely either militarily, the provision of more to address the problem democratic culture with its allies to ensure the through training humanitarian aid. of ISIS and to support the delivery of aid, military We also praise the Peshmerga forces.” to the international support, and training for and other military community by the Peshmerga forces assistance, culture of tolerance opening its doors to so that they are better or offering and peaceful 1.5 million refugees. Canadian Foreign equipped to tackle and coexistence in the Minister John Baird humanitarian aid.” During their visits defeat the terrorists.” Kurdistan Region.” Paolo Gentiloni, to the Kurdistan Matteo Renzi, “Canada will Foreign Minister, Italy Italian Prime Minister Region, various continue to support “Italian military advisors, “The Italian Parliament world leaders have the Kurdistan currently training German Foreign Minister has decided to provide Frank-Walter Steinmeier reiterated their Region in its fight Peshmerga forces, will be the Kurdistan Region with increased in the near future. “Germany will support for the KRG. humanitarian support as against terrorism. We cannot allow this Italy will continue continue to provide well as military support to support the in the fight against the terrorist organization Bert Koenders, Foreign Michael Fallon, Vladimir Makei, Foreign humanitarian aid terrorists. European to continue to threaten Minister, Netherlands UK Defence Secretary Minister, Belarus Kurdistan Region to the IDPs. Union countries share regional and global “We will continue our “The UK will continue “Belarus is ready to both directly Germany will do determination and a solid security.” support to the Kurdistan provision of military and cooperate with the KRG in and within the whatever it can to consensus to back the KRG Region, particularly in humanitarian assistance to industry, agriculture, energy, international with both humanitarian the field of energy and the Kurdistan Region.” information technology, and help the KRG cope and military assistance.” agriculture.” higher education.” coalition.” with the refugees.”

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Confidence in the Future

IIG: How would you characterize the MB: Kurdistan is a rich country, and its Kurdistan Region’s diplomatic and secu- people desire peace, stability, and peace- rity cooperation with the international ful co-existence. These are key requisites community against the ISIS threat? for development and for creating a favor- MB: The ISIS terrorist group possesses able environment for foreign investment. the armaments and capabilities of two It is true that the aggression by ISIS ter- states, and it has a large number of foreign rorists against Kurdistan initially led to fighters from across the world. It stands concerns and uncertainty, but thanks against all human values, principles, and to the brave Peshmerga – and with the coexistence. This terror group is a threat help of international collation friends – not only to us, but to the whole world. ISIS no longer poses a serious or direct It is therefore incumbent on all sides to threat to Kurdistan. ISIS has no future, Masoud Barzani — cooperate and collectively stand against and it will be completely defeated. The President of the Kurdistan Region this terrorist group. We greatly appreci- Peshmerga have demonstrated that it can ate international coalition support and be defeated. IIG talks to President Masoud airstrikes, which have tipped the balance Business and investment are long- Barzani about the Kurdistan in favor of Kurdistan Peshmerga forces. term processes, and I believe Kurdistan Region’s cooperation with the We are also grateful for the military aid has all the ingredients necessary to international community, new that we have received from international attract foreign investment. I would like regional challenges, and Kurdistan’s collation countries. However, these arms to reassure everyone that there will most significant achievements in and munitions are not sufficient to count- be no place for terrorists to operate in recent years. er the threat posed by ISIS, which owns Kurdistan. the advanced weapons of two states. As a Kurdistan is hosting and protecting result of the military sanctions by Baghdad close to two million IDPs and refugees in the past, the Peshmerga have had to from Syria. Kurdistan has hosted numer- fight with outdated and light weapons. ous world leaders and senior foreign diplomats in recent weeks and months. I believe Kurdistan has all the Kurdistan has hosted a number of inter- national conferences and exhibitions IIG: What is your outlook on Kurdistan’s of thousands of IDPs and refugees fleeing are many achievements. Despite many ingredients necessary to attract recently. Kurdistan’s security services are regional position, both economically violence and terrorism in other parts of challenges, Kurdistan has succeeded in foreign investment. I would like doing an excellent job and working day and diplomatically, in the upcoming Iraq and Syria. Kurdistan has a message of defending its values and has developed and night to provide security. These are years? peace, coexistence, and cooperation for the its new democracy. Kurdistan has signifi- to reassure everyone that there all indications that security and stability MB: Economic development and the world. It respects the values of democracy, cantly enhanced its diplomatic standing. will be no place for terrorists to will prevail in Kurdistan. building of diplomatic relations of human rights, and openness. It is also a The economic boom, rising per capita Kurdistan will continue unabated. For rich source of oil and gas. These are major income, a sound oil policy, and the cre- operate in Kurdistan. IIG: Do you expect to have more stable this, Kurdistan must continue with its achievements that have helped, and will ation of an attractive investment environ- relations with the federal government attractive investment policy, and it must continue to help, Kurdistan’s rising politi- ment are all impressive successes. I believe The international coalition decided to in 2015 and beyond? also work to strengthen its industries. cal and diplomatic standing in the world. that one of the major achievements has About support Kurdistan because it is the only MB: I believe that the recent agreement is Kurdistan has demonstrated that it is been that the people of Kurdistan have 1946 — Born in Mahabad, Iran place in the region that upholds freedom, a good start and a good first step towards a force for stability in the region, as attest- IIG: Looking back over the years you developed a sense of self-belief and a spirit 1979 — Elected as the leader of the peaceful coexistence, and plurality. They resolving the disputes between Erbil and ed by many world political and economic have served as the President, what of confronting challenges. Our people Kurdistan Democratic Party also recognized the grave threat posed Baghdad. The mistakes of the previous leaders. It has also espoused a successful developments are you most proud of? have also shown that not only they are not 2005 — Elected as the President of the by ISIS terror to themselves and to world government must be redressed. Iraq is foreign policy. In addition, Kurdistan has What might be regarded as Kurdistan’s a threat, but they are a force for stability Kurdistan Region peace in general. experiencing serious security and eco- been able to put a stop to the advances most significant achievement since you in the region. We are all witnessing how 2009 — Re-elected as President with nomic challenges, including the threat of the ISIS terrorist group. Kurdistan is took office? Kurdistan has hosted hundreds of thou- 70% of the vote 2011 — Received Atlantic Award for his IIG: Domestic stability and security by terrorism. Corruption and declining confronting this terror group on the MB: I will leave to others to judge my sands of IDPs and refugees, and how it role in promoting peace, stability, and are key demands for foreign investors. oil prices have led to major economic ground, on behalf of the whole world. presidency. Our achievements are the is at the forefront of the fight against the religious tolerance in the region. Against a backdrop of new regional problems. Iraq needs to work with the While doing this on the one hand, and result of the struggle of the people of terrorists. The free world is looking to Speaks Kurdish, Arabic, Persian, and challenges, how do you respond to this Kurdistan Region and take into consid- grappling with budget cuts by Baghdad on Kurdistan and the constant efforts of Kurdistan and the brave Peshmerga now; English sensitivity? eration Kurdistan’s demands. the other, Kurdistan welcomed hundreds all the institutions of the Region. There we are proud of this achievement. A 32 — Kurdistan Review Invest in Group — 33 D & P DIPLOMACY & POLITICS

Leading the Way A cornerstone of KRG policy IIG: What is your evaluation of the able to stand at the forefront of efforts to performance of the Kurdish economy roll back and defeat these terrorists. With has been the assurance of under your direction? shared goals of regional stability and secu- individual economic freedom NB: The people and the government of rity, our people and our government are and an open market where Kurdistan have created unprecedented confident in the recovery and continued growth over the last several years, and growth of our economy. entrepreneurs, investors, the stability of our achievements has been and businesses of various severely tested in 2014. In some cases, IIG: Why should investors around the progress is most clearly visible in times of world choose the Kurdistan Region as capacities and specialisations crisis. As Prime Minister, I am humbled a business destination? can drive growth and by the resilience, the cohesion, and the NB: A cornerstone of KRG policy has development. Nechirvan Barzani — dedication of our people. I would also like been the assurance of individual econom- Prime Minister of the Kurdistan Region to point to the key role of both domes- ic freedom and an open market where tic and foreign companies, as they have entrepreneurs, investors, and businesses Prime Minister Nechirvan Barzani maintained their belief in the success of of various capacities and specializations explains the KRG's economic Kurdistan and continued to serve as the can drive growth and development. This performance, why investors should engine of our economy through these is true for domestic businessmen and for- choose Kurdistan as a business challenging times. I believe our future eign companies and investors as well. destination, and the key sectors the is indeed bright, and this is due to the Prior to the security challenges posed KRG will emphasize for economic character and the daily contributions of by ISIS terrorists, foreign investment in development in 2015. the citizens of the Kurdistan Region. the Kurdistan Region had increased dra- The trajectory of our economy remains matically year on year, and our GDP has healthy. Certainly the security threat from grown at a very healthy rate. The secu- ISIS terrorists, the disastrous policies of rity challenges have certainly affected the previous Iraqi administration, and the our economy, as have the actions of the IIG: On which key sectors would you the development of diverse sectors. KRG is committed to serve as a stable, humanitarian crisis facing the Kurdistan previous administration in Baghdad. like to see Kurdistan place more empha- Agriculture, agro-industry, and water helpful regulator, ensuring that foreign Region have prompted the KRG to divert However, I am very pleased to see that sis in order to develop the economy and resource management present great and local companies are able to operate attention and funding from some projects both international companies and inves- provide jobs in 2015 and beyond? opportunities but also challenges to be in a responsible and successful manner. and long-term goals, and this has had a tors have not only continued their activ- NB: Despite the setbacks suffered by the overcome. Technology is a key factor in The KRG has allocated time and negative effect on our growth. But this is ities in Kurdistan but have understood Kurdistan Region and many parts of the this regard, and I hope companies and energy to ensure a fair and transparent a temporary setback, and already we see that these challenges will pass and our Middle East in 2014, our strategic long- investors will pay due attention to this employment atmosphere, particularly signs of recovery. I have no doubt that our market has a vibrant future. We see busi- term goals remain intact. It is true that we exciting sector. in the private sector. We are working to markets are regaining their momentum, ness resuming with the pace and enthu- have had to pause some larger projects As Kurdistan finds its place on the better tailor our educational system to the and the Kurdistan Region will remain siasm that has come to characterize the and investments due to the emergency map as a global energy hub, key cities current labor market so that our young among the most attractive emerging mar- Kurdistan Region. situation this year, but our plans to devel- such as Erbil, Slemani, and Duhok will be people are properly equipped to join kets in the Middle East. Foreign companies are operating op key sectors throughout the Region will blessed with new and exciting econom- the work force. Of all investments and The revenue sharing agreement within in the Region like before, flights in and continue to guide our policy. ic opportunities. The tourism industry all priorities, I do not see anything more About the budgetary law of 2015 that we have out of Erbil and Slemani have resumed It is clear that the oil and gas indus- requires wise investment and a vision for essential to our economy than education. 1966 — Born in Barzan reached with the federal government is at the usual pace, and last week’s Erbil try drives our economy and the econo- the near future but also the next ten and The availability of jobs and the growth 1989 — Elected to the leadership of the a key step forward. For the first time in International Fair hosted 250 compa- my of Iraq. I applaud the efforts by the twenty years. of various sectors of our economy only Kurdistan Democratic Party (KDP) years, we have reasonable partners in nies from 16 countries, all eager to find KRG Ministry of Natural Resources to Day after day, private companies are help us to the extent that our young men 1996 — Appointed as the Deputy PM Baghdad with the will to truly move for- their place in our market. The Kurdistan ensure that our citizens and our young answering the demands of the market and women are provided with the tools 1999-2009 — Served as the PM in two ward on the political and economic issues Region’s position as a global energy hub students can find a future in this sector. in a way that the government never can. they need. Investment in education is the successive cabinets that have hampered development for all and an important player in the Middle Part of developing our oil and gas infra- There is no question that our dynamic most sustainable of all investments, and 2010 — Elected as VP of the KDP Iraqi citizens. East remains intact, and the short-term structure is investing in our young people free market economy has been the key I believe our schools, universities, and 2012 — Formed the 7th cabinet 2013 — Elections resulted in KDP’s In addition, the global response to and long-term business climate continues and ensuring that we, as a people, master factor in our growth, in fields as varied technical training institutions deserve as landslide victory the ISIS threat may have come late, but to attract investment. Most important- every aspect of this industry. as healthcare, education, oil and gas, much emphasis and funding as we can 2014 — Formed the 8th cabinet it is clear that the world has forcefully ly, leading international companies have Like other oil-rich economies, the construction, agriculture, tourism, and provide. In the final analysis, the ability Speaks Kurdish, Persian, English, and rejected this ideology of hatred, violence, demonstrated, through their actions, that Kurdistan Region must attach impor- technology. All of these sectors require and the skills of our citizens will ensure Arabic and destruction. The KRG is willing and this is the case. tance to economic diversity and careful analysis and investment, and the the welfare of our Region. A 34 — Kurdistan Review Invest in Group — 35 D & P DIPLOMACY & POLITICS

Secure & Stable

IIG: Can you give our readers some In spite of these challenges, we have ten to thirty years. The coalition’s efforts insight into the current security situa- done all that we can to guarantee the in keeping the ammunition flowing for tion in the Kurdistan Region? security of Kurdistan. This has not been these weapons and providing some newer KS: In general, the Kurdistan Region has an easy task, as we have seen the Middle models have been appreciated. However, been secure despite continuous attempts East over the last decade become a sort of if we are to more effectively take the fight by the terrorists to harm and destabilize hub for a variety of international terror- to ISIS to ensure their destruction, we the Region. Kurdistan has always been ists. We can see the results of our efforts, must have more modern equipment, such targeted by terrorists, as they despise our though, as witnessed by the many for- as tanks, armored vehicles, heavy artillery, peace, freedom, democracy, and autono- eign companies and people who find it anti-tank missiles, and attack helicopters. my. They have tried to take advantage of safe and stable enough to work here and All of these things will better ensure our any perceived weakness to sneak into the assist in the development and progress of mutual success on the battlefield against Region. Occasionally, they have been able Kurdistan. So even with the evolution of this evil threat, which must be destroyed Karim Sinjari — to infiltrate Kurdistan by taking advan- the ISIS terrorist organization and their now before it becomes too powerful. Minister of Interior tage of our hospitality and openness to seizure of Mosul and other large areas of welcome those who are threatened. This Iraq, and even with their having many IIG: How is Kurdistan working with Minister Karim Sinjari provides is one of our challenges, as we are hosting supporters, advanced weapons, and its neighbors to fight against the ISIS IIG with exclusive analysis of the more than 1.5 million internally displaced financial support, our security forces have threat? How would you assess the role of current security situation in the and refugees who have fled from the vio- still been able to maintain the security Kurdistan as a contributor to regional Kurdistan Region, as well as the lence and unrest in other parts of Iraq of Kurdistan so that it is a safe haven for security and stability? KRG's security cooperation with the and Syria to find refuge in Kurdistan. It those in need as well as its citizens and must cooperate, or accept their brutal military sector. In the military area, we KS: Kurdistan has long adopted a pol- international community against is naturally quite difficult to give so many guests. domination and killing. have close cooperation in the conduct icy to live in peace with our neighbors. the ISIS threat. people access while at the same time try- Because we are aware of the threats For these reasons, it is critical that of coalition airstrikes as we share infor- We strongly believe in non-interference, ing to know who they are and monitor that are out there, security does remain the international community and all of mation to effectively target ISIS. We also mutual respect, trust, and understanding. their movements. But we have given this our top priority. We are determined to the regional countries take very serious closely coordinate regarding our equip- Because of this, we have always sought to task our strongest efforts. ensure that our citizens and all of our measures toward destroying ISIS both at ment and training needs. The coalition maintain direct communications with all Our security forces are deployed guests are able to live, work, and enjoy the places where it is recruiting, as well has, in fact, played a very positive role, of our neighbors so that we can ensure extensively throughout the Kurdistan the blessings of peace and freedom in a as in Iraq and Syria on the battlefield. and we thank all of the members for there is a good understanding of all things Region and are actively using all of their safe environment. We are equally deter- Toward this end, we are very supportive their assistance. between us. This open communication skills and resources to keep threats out of mined to ensure that Kurdistan remains has allowed us to have positive relations the Region. This is another challenge, as a place where democracy, peace, diver- We are determined to ensure that our with our neighbors that have led to ben- we are controlling a border of more than sity, and tolerance are well understood citizens and all of our guests are able efits in terms of stability, economic devel- 1,000 km opposite the most evil terror- and accepted. opment, and security integration. ist organization we have seen in recent to live, work, and enjoy the blessings of Part of the reason for these positive history. In spite of these challenges, our IIG: How would you characterize the peace and freedom in a safe environment. results in security is because our neigh- security forces have been able to thwart Kurdistan Region’s security coopera- bors know that Kurdistan is a force for many attempts to damage the security tion with the international community We are equally determined to ensure stability within the region. Kurdistan has of Kurdistan. We can proudly say that against the ISIS threat? that Kurdistan remains a place where had good contributions toward regional Kurdistan is a secure area, as it has in fact KS: It is important to recognize that stability and understanding. This mutu- become a safe haven for a variety of peo- ISIS is not just a threat to the Kurdistan democracy, peace, diversity, and tolerance al cooperation has been beneficial since ple regardless of their ethnicity, religion, Region. It is, in fact, a threat to all of the are well understood and accepted. Kurdistan has been at the forefront in or political affiliation. international community. It is well known confronting ISIS, and our neighbors well About I would also like to commend the that thousands have come from around know this fact. Because of this, we have Karim Sinjari was initially appointed as people of Kurdistan for the very pos- the world to fight on behalf of ISIS. They and welcoming of the airstrikes that the In spite of this assistance, there is established good military exchanges and Minister of the Interior in May 2006. itive cooperation they share with our have supporters and recruiters around the Americans and other coalition partners much more that is needed. ISIS has intelligence sharing to more effectively From 2001 to 2006, he served as the security forces. This cooperation is part world who are spreading their message of have conducted in Iraq and Syria, as they been fighting with advanced weapons combat ISIS. Although this cooperation Interior Minister in the KRG’s Erbil of the foundation of our security across hate and intolerance. They are effectively have helped our Peshmerga forces who are that were captured from the Syrian and is a good step for regional security, it is and Duhok administration, and was Kurdistan, as it is the people who see and using social media to promote their evil at the forefront on the ground in this fight Iraqi Armies. Some of these items were only one step. This fight really does need elected to the central committee of the KDP. Prior to that time, he worked as know things in many instances before the actions. Because of this, all of the inter- to achieve success in pushing ISIS back. the latest arms that came originally from an expanded regional and international the Director General of the Kurdistan security forces. Because our people also national community must work togeth- In fact, our security cooperation Russia or the United States. On the other effort in cooperation to develop a joint, Region’s security service from 1993 until do not tolerate terrorism and efforts to er to stamp out their desires for regional with the international community is hand, we have been fighting with obso- comprehensive strategy so that we may 2001. He is fluent in Swedish, English, destabilize our Region, they cooperate domination through their self-described very good. We are receiving assistance lete Soviet-era equipment that was cap- eliminate this threat now in a final and Arabic, and Persian. very well with our security forces. caliphate. There is no other choice. We in the humanitarian sector, as well as the tured from Saddam’s regime over the last conclusive manner. A 36 — Kurdistan Review Invest in Group — 37 D & P DIPLOMACY & POLITICS

The KRG's Foreign Policy Perspective

IIG: Considering recent regional devel- international coalition against ISIS. The opments, what would you say the main KRG will work closely with UN agen- pillars of the Kurdistan Region’s foreign cies and the international community to policy are? And what are your priorities assist refugees and internally displaced for 2015? persons who have taken shelter in the FMB: Under current circumstances, Kurdistan Region and to rebuild their our main objective is to effectively com- areas. Another important task within municate the message of the Kurdistan the context of the fight against ISIS is to Region to the international community gain international recognition for the in regards to the ongoing political, secu- crimes committed by ISIS against dif- rity, and humanitarian challenges that ferent ethnic and religious minorities as we are facing here in Kurdistan. Since acts of genocide. Falah Mustafa Bakir — the beginning of the Islamic State of Iraq Second, in line with the Iraqi consti- Head of the Department of Foreign and al-Sham (ISIS) onslaught on Iraq and tution, we will continue with our open Relations Kurdistan, we have been warning our door foreign policy and will try to broad- friends in the international community en our ties with countries across the globe Minister Falah Mustafa Bakir details that ISIS does not only pose a threat to the through establishing bilateral relations. the Kurdistan Region’s foreign Kurdistan Region, Iraq, and the Middle We are focused on encouraging more policy goals and priorities in 2015 East, but also it poses a direct threat to countries to establish a diplomatic pres- and the Region’s strengthening ties international peace and security. We ence in Kurdistan as well as expanding with the EU and the US. believe that the United Nations Security the international presence of the KRG Council has a moral and legal respon- through opening new representative offices abroad. IIG: How is the DFR working to expand IIG: As the diversification of Since the beginning of the Islamic The KRG seeks to strengthen ties with cooperation with the EU? Kurdistan’s economy gathers speed, the European Union. We are also inter- FMB: We have placed huge importance what can the DFR do to help foster State of Iraq and al-Sham (ISIS) ested to build institutional ties with the on expanding and improving relations FDI and support the Region’s econom- onslaught on Iraq and Kurdistan, we Arab League. We are determined to build with the EU. The KRG Mission to the EU ic development? more bridges with the international com- was established in Brussels in 2000. The FMB: While the rest of Iraq has seen a have been warning our friends in the munity in order to further enhance the Mission’s main objective is to maintain high level of violence and terrorism in international community that ISIS economic and political achievements of and strengthen political, economic, and the past few years, particularly since the does not only pose a threat to the the Kurdistan Region. cultural relations between the Kurdistan beginning of the ISIS onslaught against The support is a clear indication that Region and European Union institu- Iraq, the Kurdistan Region has remained Kurdistan Region, Iraq, and the Middle IIG: The KRG received huge support members of the international commu- tions. Our ties with the EU are steadily peaceful and stable. Kurdish Peshmerga East, but also it poses a direct threat from the US and EU countries in its nity need to cooperate with one another improving. Following the attacks of ISIS forces have been able to repel ISIS attacks fight against terrorism. What does this to secure a safer and more stable world. in Iraq, the EU has been giving special on the Kurdistan Region. The Kurdistan to international peace and security. mean from a foreign policy perspective? It shows that the Kurdistan Region is not attention to the security and humanitar- Region’s strong economic potential and FMB: We welcome the US-led coalition abandoned and that we have reliable part- ian situation of the Kurdistan Region. stable security situation make it a safe sibility, under chapter seven of the UN against ISIS and we are proud to be a lead- ners in the international community. In June, the EU DG for Humanitarian haven for international investors. charter, to maintain international peace ing force in the coalition. We are being The support has hugely boosted the Aid (ECHO) opened an office in Erbil. The Department of Foreign Relations About and security through confronting ISIS. supported by the international communi- international reputation of the Kurdistan In August, the EU Ministers of Foreign continues to work hard to support inter- Falah Mustafa Bakir was born in Erbil Our foreign policy priority for 2015 ty for the values that we stand for, for our Region and its Peshmerga forces. Our Affairs, within the EU Council, decided national businesses by assisting them in in 1964. He holds a B.A. in English is twofold. First, we will make con- respect for human rights and the rights Peshmerga forces are fighting an inter- to send humanitarian aid to the Kurdistan communicating with the various insti- Language and Literature from the certed efforts to ensure further and of religious minorities. We are proud to national terrorist organization, with mem- Region and also decided that Member tutions of the Regional Government, University of Mosul, and an M.A. continued engagement by the interna- have developed a culture of democracy, bers across the globe, on behalf of the free States were free to send arms to Kurdish directing them to resources related to in Development Studies from the University of Bath in the UK. He also tional community in the fight against peaceful coexistence, and religious and and civilized world. They have proven to Peshmerga forces. In the same meet- their endeavors, and promoting region- completed the executive program for ISIS in order to restore peace and sta- ethnic tolerance here in Kurdistan. These be a reliable partner on the ground and to ing, EU Ministers asked the European al and international conferences and senior managers in government at bility and dismantle extremists in the values are deeply rooted in our culture have the capability of fighting and defeat- External Action Service (EU Foreign events designed to encourage busi- Harvard University’s Kennedy School of region. This can be achieved through and we are determined to preserve and ing ISIS. Kurdistan is now an essential part Ministry) to strengthen the EU's pres- ness and investment in the Kurdistan Government. closer cooperation with NATO and the defend such values. of the international coalition against ISIS. ence in Erbil. Region. A 38 — Kurdistan Review Invest in Group — 39 D & P DIPLOMACY & POLITICS

How would you characterize the commer- reservations have largely been overcome cial ties between both sides? thanks to information exchange and first- KRG Worldwide A number of Austrian companies are hand visits to the Kurdistan Region. Our already making use of the vast commer- goal now is to promote B2B opportunities cial opportunities the Kurdistan Region between Austria and the Kurdistan Region. has to offer. Austrian Airlines was the first The KRG’s dynamic foreign relations are crucial and integral components international carrier to offer direct flights Do you work with the Austrian com- KRG in Austria to Erbil in 2006, contributing immense- mercial office in Erbil or other business of the Kurdistan Region’s economic and social development. The DFR’s Dr. Mustafa Ramazan Goran — ly in connecting Kurdistan with the rest groups with an interest in Kurdistan? KRG Representative in Austria of the world. Other prominent examples The existence of an Austrian commercial of Austrian commercial activity are the office in Erbil as well as the active par- foremost objectives are to raise the global profile of the Kurdistan Region, energy company OMV, and Doppelmayr, ticipation of Austrian companies in the who built cable cars on Korek Mountain numerous trade fairs, too, underline the improve the Region’s international ties with various governments and and in Slemani, and is currently working great interest Austrian companies are on another project in Duhok. Aside from showing in the Kurdistan Region. We plan international organizations, and present the emerging opportunities in these projects, our office meets daily with to organize sector-focused events in the smaller Austrian companies who are show- coming months, as we firmly believe that the Kurdistan Region to regional and international actors. IIG talks with ing an increasing interest in the Kurdistan the Kurdistan Region’s agriculture and Region’s business opportunities. Although tourism sectors, which are defined as pri- at the beginning there was naturally a bit ority sectors by our government, could the KRG's representatives about their missions' activities and future plans. of reluctance due to the unstable securi- benefit greatly from extensive Austrian ty situation in some parts of Iraq, these expertise and experience in these fields.

What is your key message to the German reliable partner in Kurdistan and being able In which sectors in Kurdistan have Italian What is your key message to the Italian business community? to rely on local conditions. Germany and businesses found the most success? business community? The lack of trained staff in Kurdistan is a German workmanship have an excellent Italy has the highest number of commercial Kurdistan can provide a springboard negative factor. However, the process of reputation, and it is time to utilize it. exchanges with Iraq of any European coun- for a new cycle of growth for the Italian democratization, the business boom, the try and is third in terms of export volume to business community. There are current- ethnic and religious tolerance, the social Which of Kurdistan's economic sectors the Region. Italian exports to Iraq and the ly 50 Italian companies with a presence KRG in Germany progress, and especially the stable secu- have German businesses found the most KRG in Italy Kurdistan Region have followed a trend of in the Kurdistan Region, a number that Dilshad Barzani — rity situation are our foundation, and offer success in? Which offer most future Rezan Kader — growth that is continuing to increase. Italian represents a trend of significant growth KRG Representative in Germany major opportunities to German business potential? KRG Representative in Italy entrepreneurs are increasingly interested in over the last few years. Our key message in all areas. Several large German industrial firms are investing in Kurdistan, largely thanks to the to the Italian business community is to Germany can only benefit from closer active in various areas of electricity supply, 2006 Investment Law. The main areas of exploit the huge investment opportunities collaboration– from our dynamic econo- while others are active in water supply. interest and active participation of Italian in Kurdistan. Italian businesses that enter my, energy resources, stability, and good Kurdistan presents tremendous opportu- businesses are construction, infrastructure, Kurdistan will receive extensive support relationships with our neighbors, and, of nities to German businesses, especially in and energy. For example, FG Tecnopolo, an from our Representation, as well as the course, as a gateway to the rest of Iraq. areas such as construction, infrastructure, Italian engineering firm, designed the city Italian National Construction Association, We can see many positive develop- transportation, logistics, services, environ- of Erbil’s underground network, and Italian which organizes regular missions to the ments, yet we still have an enormous mental technology, agricultural technolo- architects and engineers will be design- Region, and the Italian Consulate in Erbil, amount of work to do. Companies need gy, healthcare, water management, waste ing the new KRG Ministry of Education in which provides Italian businesses with legal security, prospects, and infrastruc- disposal, and many others. We are high- Erbil. The areas on which we must focus trade and insurance services. ture. But even under good conditions, the ly interested in German companies that increasingly are engineering, infrastructure, first steps in a far-away country are always would enrich the Region with high quality agribusiness, pharmaceuticals, energy, and bold steps. Therefore, it is crucial that com- and innovative products and services. tourism. panies can be certain of having a solid,

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Which of Kurdistan’s economic sectors We will be leading trade delegations to What kind of year was 2014 in terms of What are your Mission’s plans for 2015? offer the most potential for Spanish visit Kurdistan. An objective of ours is EU-Kurdistan relations? Our focus is to establish a stronger rela- entrepreneurs? to strengthen economic cooperation by 2014 was a productive year for KRG-EU tionship with the European Commission Having built a close relationship with Spain’s matchmaking potential partners to begin relations. The European Commission and to convince the EU to open its diplo- Ministry of Economy & Competitiveness joint ventures. We will be encouraging com- opened its Humanitarian Aid and Civil matic office in Erbil in 2015. In cooperation and the ICEX, we determined that the four panies to attend trade fairs in Erbil where Protection (ECHO) office in Erbil to assist with European Friends of Kurdistan, we KRG in Spain primary sectors that offer the most poten- they can meet their Kurdish counterparts KRG in the EU IDPs in Kurdistan. In terms of political will organize study trips to the Kurdistan Daban Shadala — tial to Spanish investors and entrepreneurs and network amongst decision makers of Delavar Ajgeiy — relations, several high-level bilateral vis- Region to establish a better dialogue with KRG Representative in Spain are construction, agriculture, education, the Region. Head of the KRG Mission to the EU its from both sides occurred. Several res- the Kurdistan Parliament and the KRG. The and tourism. olutions were adopted by the European KRG Mission to the EU will continue to Where do you see Kurdish-Spanish rela- Parliament on the Kurdistan Region, promote Kurdistan's culture and diversi- What targets do you have for future eco- tions in the medium term, in terms of and the large majority of MPs expressed ty in the EU. To that end, our Mission will nomic cooperation between Spain and opportunities? their support for and solidarity with the organize several cultural events such as the Kurdistan Region? We will work to develop even stronger Kurdistan Region. In 2014, we also estab- a Kurdish New Year (Newroz) celebra- We aim to hold a conference related specif- bonds with Spain. We will touch upon lished European Friends of Kurdistan in the tion in cooperation with our friends in the ically to the targeted economic sectors in areas where there is potential for cooper- European Parliament. The main mission of European Parliament. which we feel Spain has a lot to offer and ation to ensure a closer relationship. Once this group is to increase awareness about invite leading businessmen, experts, and Spain emerges from the economic crisis, Kurdistan in the EU and to enhance KRG- government officials from the Region to I am sure we will see a consulate opened EU relations. participate. Moreover, we will be approach- in Erbil, as there is a high level of interest ing various chambers of commerce all over from senior officials in the government Spain in order to present the economic situ- to do so. Opening a Spanish consulate ation of the Region along with the potential would facilitate a drastic increase in the French firms are among the most active through partnerships with French compa- areas of opportunity for their members. Spanish presence in Erbil. foreign players in Kurdistan. How has your nies with the goal of acquiring their know- office helped to facilitate this investment? how and expertise, which are crucial in French companies are currently well rep- this phase of our economic development. resented in Kurdistan, but a substantial For example, an agreement was signed How would you characterize commercial has welcomed two high delegations from margin for expansion remains. Numerous to this effect with the French Region of relations between Sweden and Kurdistan? the KRG, the first one headed by the other profitable investments are available Dordogne. We are also in contact with the The commercial relations between Minister of Agriculture and the other led KRG in France to our French partners. The flagship firms Brittany region. Kurdistan and Sweden are emerging. by the Minister of Labor. We focused on Khaman Zirar Asaad — of French industry are currently high- Swedish companies invest in the recon- future cooperation in the agricultural and KRG Representative in France ly visible in the economic landscape of Where do you believe French investment struction process in Kurdistan. Swedish industrial sectors, but we would also like Kurdistan: Lafarge in the cement works in the Region will head in the future? KRG in Sweden enterprises like Scania, Ericsson, and Volvo to improve existing agreements between sector, Total in energy, Orange in telecom, We believe that France – a pioneering Shorsh Kadir Rahem — are all established in Kurdistan. For us, Swedish and Kurdish authorities. Carrefour & Auchan in mass-scale food and highly dynamic country in the food KRG Representative in Sweden Sweden’s contribution to the development Today, the international community retailing, and so on, but we hope to see industry – should invest more in this sec- of Kurdistan can be even more successful understands that Kurdistan is an indis- small and medium-sized French enter- tor. The same is true of tourism. Kurdistan, if the vast human resources available in pensible region for peace and stability in prises invest more heavily in Kurdistan. which has enormous potential in this sec- Sweden are used. the Middle East. For the KRG in Sweden, Kurdistan was at one point the fruit basket tor, should take France as an example in it is important to promote what makes and granary of the entire region; it must this area also, by showcasing its rich past, where do you see relations between the Kurdistan indispensible. We will continue become so once again. Our citizens should straddling three major civilizations, and its KRG and the Swedish government headed to promote the intrinsic bound that joins not settle for being consumers, but must historical heritage as a means of projecting in the medium term? Kurdistan and Sweden and work to devel- also become producers. This is possible itself into the future and the modern world. Since February 2014, the KRG in Sweden op these relations even further.

42 — Kurdistan Review Invest in Group — 43 D & P DIPLOMACY & POLITICS

The Expert A New Era IIG: The KRG received huge support Alternately, such IIG: How do you see relations between About from the US and EU countries in its the KRG and the federal government Dlawer Ala’Aldeen served as the KRG’s fight against ISIS. What does this mean a role for the evolving in 2015? Minister of Higher Education and from a foreign policy perspective? KRG and being at the DA: I am cautiously optimistic about Scientific Research from 2009-2012 CC: The fight against ISIS has become the future relations between the KRG and and co-founded the Kurdish Scientific receiving end of huge and Medical Association, an advocacy priority of the international system, i.e. the the federal government in Baghdad. I organization that seeks to safeguard Western world that is mainly the US and support from the believe the worst is now behind us. After Kurdish human rights and shape the EU. The KRG is on the frontline of this US and EU countries a series of political, security, and finan- American and British policies towards international effort. It has the longest bor- cial crises over the past couple of years, Kurds. He completed his postgraduate der with ISIS. It is simultaneously under reflect that the the two sides have finally realized that, studies in the UK, where he also the threat of ISIS and also the “boots protection, survival, for stability and prosperity, they inevitably served as Professor of Medicine at the on the ground” against the so-called need each other. Now, the dynamics of University Nottingham. Cengiz Çandar — “Caliphate,” the undoing of which has and wellbeing of the Professor Dlawer Ala'Aldeen — politics in Baghdad have changed radi- Senior Columnist been the predicament for the international KRG are under solid and President, Middle East Research cally. Mutual trust remains weak between IIG: MERI held its inaugural Forum. system. To degrade and ultimately destroy Institute (MERI) the KRG and Baghdad. Where there is Can you tell us about its outcome? Cengiz Candar explains Kurdistan’s and defeat ISIS is the primary goal for the concrete international a will there is a way, however. The new DA: MERI Forum 2014 was an excit- growing strategic significance in coalition. Thus, the KRG has, by itself, guarantees. IIG talks to Dlawer Ala’Aldeen about PM Haider Al-Abadi was slow in show- ing event. The primary purpose was to the fight against ISIS and outlines transformed into a main pillar for such an Baghdad-Erbil relations, the MERI ing good-will gestures in practical terms, create a platform for dialogue and con- the implications of strengthening international undertaking. This is a crucial policy towards Syrian Kurds do have the Forum, and MERI's future plans. but he has begun to rebuild confidence. structive debate for the Middle East. This economic, political, and military role from a pure foreign policy perspec- potential to affect its relations with the The KRG leaders on the other hand event brought together decision-makers, ties with regional and international tive. Alternately, such a role for the KRG KRG. However, regional dynamics are as have acknowledged that Baghdad shall academics, and members of the public partners for the future of the and being at the receiving end of huge strong and even more important in shap- remain of primary importance for the to debate current political events with Kurdistan Region. support from the US and EU countries ing national policies. Therefore, we can- KRG, irrespective of the Region’s destiny. an impact on both Iraq and the wider reflect that the protection, survival, and not deduce that domestic factors would Furthermore, regional and internation- region. Fostering a culture of debate and wellbeing of the KRG are under solid and have an adverse effect. They could render al powers, which are now increasingly dialogue is of utmost importance to the concrete international guarantees. This is a the complete opposite result. Taking the engaged in Iraq due to the anti-ISIS war, Institute’s objectives. Events of this nature tremendous, historic achievement for the progress achieved in Turkish-KRG rela- have put pressure on both sides to mend are not common in the Middle East. We Kurds, who had been the underdogs of the tions into consideration, we have to be fences. encourage a culture of dialogue that can regional order in the post-Sykes-Picot era. optimistic and positive that a similar evo- contribute to stability and growth in the lution can take place in Turkey’s attitude IIG: The KRG received huge support region, now and in the future. IIG: How would you assess the evo- towards its own Kurds and their kins- from the US and EU countries in its lution of Turkey’s stance towards the men in Syria. Moreover, the KRG can also fight against terrorism. What does this IIG: As MERI aspires to be a “global KRG? Could domestic political factors influence Turkey’s attitude interactively. mean from a foreign policy perspective? leader in strategic research,” what plans in Turkey and Turkey’s policy towards DA: This increasing international military do you have to partner with your inter- Syrian Kurds affect the progress made IIG: How would you assess the political and humanitarian support for the KRG national peers in think tanks, academia, in Turkish-KRG relations in the medi- stability and rapid economic development has far-reaching significance. It is a clear or government? um or long term? of the Kurdistan Region in recent years? recognition of the Region’s achievements. DA: From the outset, MERI established CC: The evolution of Turkey’s stance CC: It deserves a very simple and brief The West now sees the The West now sees the Kurdistan Region, strong links with many of the world’s top vis-à-vis the KRG is another remarkable response: it is an impressive success story, in contrast with the rest of Iraq, as an island think-tanks and centers of excellence achievement on the part of the Kurds. particularly since the Kurdistan Region Kurdistan Region, in of stability, fledgling democracy, and eco- within renowned universities, particu- Turkey evolved from being the most hos- has achieved this in an Iraq plagued by contrast with the rest nomic prosperity; a region that deserves larly in Europe, the USA, and Turkey. We tile player of the regional state system into devastating and bloody civil wars. Under to be protected. As a result, political and have joint programs for accommodating About being a close partner for the KRG eco- such circumstances, the Kurdistan Region of Iraq, as an island diplomatic ties with many countries have fellows, training staff, and supervising Cengiz Candar is a senior columnist nomically, commercially, and, as a mat- flourished as an oasis of stability, peace, of stability, fledgling been strengthened. The people and politi- master’s and PhD students. The aim is for Radikal Daily. He is the author ter of fact, politically. The point that has and economic progress. It goes without cal leaders in Kurdistan are more confident for MERI to act as a credible partner to of several books, mainly on Middle democracy, and East issues, including the best-seller been reached, while remembering the saying that this is a fabulous achievement about their future than ever before. That international research institutions and a Mesopotamia Express: A Journey in past, should be regarded as unbelievable for the Kurds and serves as evidence that economic prosperity; a said, the leaders must not become compla- good home for international researchers. History. Candar was a special foreign despite its ups and downs. It is huge prog- the Kurds in the 21st century are as enti- region that deserves to cent. They must capitalize on this support Our objective is to jointly publish high policy adviser to Turkish President ress for both parties. Of course, domestic tled to run their affairs as any other civi- by investing further in nation-building and quality reports that have impact on a local, Turgut Ozal from 1991 to 1993. political factors in Turkey and Turkey’s lized nation. A be protected. their young democracy. regional, and international level. A 44 — Kurdistan Review Invest in Group — 45 D & P DIPLOMACY & POLITICS

INSIGHT— The UK: A Friend to the Kurdistan Region Notes from Westminster

IIG: Considering recent regional devel- leaders. Companies back home con- The report of the pioneering and year – long inquiry opments, do you think the Kurdistan tinue to maintain an active interest in by the Foreign Affairs Select Committee into UK Region remains attractive to the British the Region, assisted by UKTI, British business community? Expertise, the Middle East Association, Government policy on the Kurdistan Region will be one AM: Absolutely. The long-term prospects the KRG Delegation in London, and of the main and last foreign policy issues aired in detail for the Kurdistan Region and, indeed, others. If any British companies remain in this parliament. wider Iraq remain good – a prosperous, hesitant, I encourage them to speak to oil-rich country, a large market, and a local experts in the Erbil and Baghdad neighborhood promising long-term UKTI teams. growth. The ambition of the Kurdistan Gary Kent — Region's leaders is admirable. The new IIG: What are your medium-term Director, All Party Parliamentary Group government in Baghdad provides the expectations regarding the political on the Kurdistan Region of Iraq (APPG) Angus Mckee — opportunity to build a new nation- and economic progress of the Region? British Consul General to the al consensus. For UK companies, the AM: What the KRG and the people have he report will almost certainly building fit for purpose. Ever since I emphasize the urgency of tackling the Kurdistan Region Consulate's UK Trade & Investment achieved in the last decade is impressive. be released within weeks and a began visiting the Kurdistan Region in humanitarian crisis caused by the massive (UKTI) office and existing British busi- I am confident there is more to come. Tformal government reply should 2006, there has been talk of moving the influx of refugees and internally displaced British Consul General Angus nesses here are willing to make introduc- Certainly the UK – both government follow within two months, probably just diplomatic post from its aerie in a hotel people. I would be surprised if the report McKee discusses the growing tions and share expertise. Our Embassy and private sector – is actively working before parliament is dissolved at the end north of the capital to a more central loca- omitted clear Kurdish requests for heavy commercial ties between the in Baghdad, with its own UKTI office, is toward that goal as part of our efforts of March. tion. A prime spot was gazumped by the weapons. Kurdistan Region and the equally active. Working together, we can in wider Iraq. As to what is required to Its importance to British foreign poli- Russians and a proposed pitch has been A year ago, the issue of independence United Kingdom and shares his help companies identify opportunities achieve that, it is certainly in the KRG's cy formulation need not fade along with abandoned as the security crisis requires seemed distant and has ebbed and flowed government’s support for the across Iraq. best interests to be on good terms with this parliament. If MPs cannot debate the a rethink of the profile of the post. in the past few months. The recent deal KRG’s reform efforts. Baghdad and cooperating closely in the report and the reply before the election, The Committee could also add its with Baghdad has taken the heat out of fight against terrorism. supporters of the all-party parliamenta- weight to calls for direct flights between the debate but many wonder if it can In the longer term, there needs to be ry group on the Kurdistan Region could Britain and Kurdistan and underscore become a durable federal and revenue greater opportunity for the private sec- seek to highlight them in the sharing settlement. tor. We encourage reforms that strength- new parliament. The committee's public en the Kurdistan Region's institutions The contents of the report The Committee could also add its evidence sessions certainly and laws, including pro-business legis- are not yet finalized. It will, weight to calls for direct flights saw some robust challenges, lation. Certainly there is a lot of debate however, draw on the com- if only to test their intellectu- here on the necessary next steps, includ- mittee's discussions in Erbil, between Britain and Kurdistan and al strength, to the British gov- ing opening up the financial sector. It Slemani, and Baghdad last underscore the need for British ernment's One Iraq policy. is heartening that the KRG continues year. It will also examine oral More British MPs, including to invest in education, and we play a and written evidence from interests to be more proactive in some on the committee, are lead role through the British Council, senior Kurdish and British seeking contracts. clearly more sympathetic to UK private sector, and FCO Chevening figures including the former Kurdistan, which is seen as a Scholarships. Indeed, we intend in 2015 KRG High Representative to beacon of progress and a bul- that more Chevening Scholarships will the UK, Bayan Sami Abdul Rahman, and the need for British interests to be more wark against extremism. be awarded to candidates from the the current Middle East Minister, Tobias proactive in seeking contracts. Britain has Kurdistan has captured a place in Kurdistan Region than ever before. We Ellwood. a good toehold and should build on wide- the hearts and minds of parliamentari- are doing similar elsewhere in Iraq. The When the inquiry was initiated, it spread Kurdish respect for UK goods and ans and others in Britain and elsewhere. What the KRG It is inevitable that the current uncer- coming months will be challenging, but seemed probable that it would probe the services. The interim funding settlement Whether this sympathy is translated tainty has generated some hesitancy on our commitment is strong. It means that practicalities of the Anglo-Kurdish rela- between Baghdad and Erbil could revive into questioning British policy, support- and the people the part of international businesses, but the Consulate team has its work cut out, tionship: Britain's diplomatic presence the KRG's multi-billion dollar infrastruc- ing self-determination in some circum- have achived in the last UK corporate leaders I speak to rec- but recent events failed to diminish our and priorities, visas, and business oppor- ture wish list and present opportunities stances, or a more neutral formulation ognize the opportunities and potential commitment, ambition, or energy – if tunities, for instance. for British organizations. And that is are open questions. Either way, the fact of decade is impressive. here. Our trade delegations continue anything they have been doubled. In this, Judging by the committee's grilling made more urgent by China and India the inquiry and the report from a respect- I am confident there is to visit – even when others haven’t – we work with the Kurdistan Region’s deci- of the Middle East minister last year, the deciding to locate diplomats in Kurdistan ed parliamentary body could do much and are well received by the Kurdistan sion-makers and people not only as part- Committee will probably push the Foreign and compete for contracts. to advance the quality and quantity of more to come. Region’s government and business ners, but also as friends. A Office on establishing a consulate-general My hope is that the report will also Anglo-Kurdish links. A 46 — Kurdistan Review Invest in Group — 47 HELP HAS NO BOUNDARIES FOR RWANGA FOUNDATION

Sofia Barbarani — wanga Foundation was the first to deliver urgently needed aid to RYazidis trapped on Mount Sinjar. This young foundation, envisioned and founded by Idris Nechirvan Barzani, has tackled a myriad of obstacles in 2014 and helped over 400,000 vulnerable peo- ple, internally displaced persons being amongst the greatest beneficiaries. A recent addition to Rwanga’s team, Taban Shoresh, has a deep understanding With winter settling in and tempera- In order to provide more help, the Rwanga Awards served as a culmination of of the plight of the millions of displaced tures plummeting, aid organizations have mission of the foundation needs further the foundation’s efforts to create a platform Iraqis. At the age of four her family was begun mobilizing to make the freezing support from donors. Having worked in for young men and women to showcase forcefully displaced for months on end in months as bearable as possible, and the City of London, Taban reflects on the their talents. The head of UNAMI ‘s region- an attempt to escape Saddam Hussein’s Rwanga Foundation is at the forefront need for businesses to help the local com- al office in Erbil, Sokol Kondi, praised the ruthless soldiers who were intent on of this struggle. munity in Kurdistan through their corpo- youths’ talents and efforts on the night. killing her father, Sami Shoresh – a poet But winter has only just begun and the rate social responsibility programmes and 2014 saw millions of lives turned and Kurdish veteran. After two weeks in temperatures will continue to drop, falling hopes that many businesses come forward upside down, entire cities abandoned, a regime prison and a year of travelling Bravest Woman Awards for risking her in Duhok governorate in the New Year below zero in some parts of the Region to help Rwanga Foundation, with partic- and family members lost. Most of the around Kurdistan, the Shoresh family life to deliver aid to families trapped on where 3,000 prefabricated housing units where snowfall is not uncommon. This ular projects aimed at internally displaced displaced have found refuge in Kurdistan crossed into Iran on horseback and finally the mountain. will shelter 24,000 displaced people. will undoubtedly be Rwanga’s busiest time persons and the importance of education. with an ever-present helping hand from relocated to London in 1988. With Mount Sinjar liberated and Rwanga Foundation hopes to equip the of year and donations will provide the In November, a night of music, art, and committed aid workers like those of In July 2014 Taban left her job with a people still remaining on the mountain, camp units for families and build a school support needed to continue aiding dis- festivities shed light on just how important Rwanga, who continue to operate under global asset management firm in London team members from Rwanga, including for children. The team at Rwanga will placed persons. Donations can be made youth and education are to the organiza- the foundation’s motto: “Decide. Commit. and relocated to Kurdistan, taking up a Taban, returned by road to distribute aid continue its efforts to provide assistance through their website or by contacting tion. In the team’s ongoing commitment Succeed.” in a bid to assist Kurdistan’s most position with Rwanga Foundation. In in early December. The families on the to the most vulnerable. Rwanga directly. to inspire youths around the world, the vulnerable men, women, and children. August 2014, only 48 hours into her job, mountain– under siege since August – Being recognized as a trusted partner A the young mother-of-one was tasked with were in dire need of the most basic items. on the ground, the international founda- providing aid for the thousands of people At night, temperatures on the mountain tion has received large donations from trapped on Mount Sinjar– a dangerous plummet below zero and the tents the governments such as Germany and the operation that involved flying over areas families call home are simply not enough Netherlands (50 tonnes of food, beverages controlled by the so-called Islamic State. to shelter them from the cold. Seven trail- and blankets) and from charity organiza- Reliving her childhood, Taban explained ers of winterization items including shoes, tions such as Samaritan Purse (25 tonnes how, “this wasn't 1986, this was 2014…it jackets, and blankets, reached those who of winterizations items) and LOG Wings of was heartbreaking to see people scram- desperately needed it. Help (40 tonnes of shoes, jackets, blankets, bling onto the helicopter”. Taban’s brav- Support for the internally displaced tents and other winterization items). These ery was brought to light when she was continues as Rwanga Foundation works international efforts have been fundamen- named Bravest Woman at the 2014 Best to complete the construction of a camp tal in furthering Rwanga’s difficult task.

48 — Kurdistan Review Invest in Group — 49 BUSINESS THE REVIEW Business

ECONOMY AT A GLANCE

GDP $26.5 billion (2012)

Per Capita Income $7,000 (2012)

Gov't Budget $17.5 billion (2015)

Growth Target 888% +12O(2015-16)

6% Inflation 95+5O(2013)

Unemployment 9410% +6O(2013)

41.9 Billion Total Investment Searching for Sustainable Growth $ (2006-2014) The Kurdistan Region is targeting 8% economic growth for 2015-2016 as it looks to bounce back FDI $3 billion (2014) from last year's sluggish economic performance. he last year has been a time of both landmark achievements and unprecedented challenges for the economy of the Kurdistan Region. Groundbreaking advances 41 Total banks Tin the Region’s energy sector and an expanding customer base for its oil and gas exports have marked the beginning of a new chapter in Kurdistan’s economic growth. While these developments promise exciting new opportunities for the Region’s econ- 2.3 billion omy, ISIS-led violence and budget disputes with the federal government serve as Investment reminders that the Kurdistan Region must continue a trend of fortitude and prag- $ projects banking matism to maintain the economic progress that has so far distinguished it from its regional peers.

Invest in Group — 51 B BUSINESS Did you know? Did you know? A total of 2955 foreign companies are registered to operate in the Kurdistan Region, including 1329 The Economist’s Intelligence Unit ranked the Kurdistan Region 55th in the world on its “quality of Turkish, 335 Iranian, 157 Lebanese, 155 Emirati, 125 British, 117 American, and 81 German companies. life” index, while Iraq as a whole placed 134th out of 159 countries for which data was available.

Striving to Grow Budgetary Pressures The KRG Ministry of Planning pre- the Kurdistan Region is $7,000 in 2012, labor market at the moment. In January 2014, disputes over oil rev- area of 11-13%. This system of budget Future Prosperity dicts annual economic growth at a rate while in 2002 it stood at just $800. The Kurdistan Regional Government enues and control of natural resources allocation has been characterized by fre- The KRG has outlined bold of 8% for the 2015-2016 period. This Despite these improvements, unem- also aims to close the gender gap in the between Erbil and Baghdad led Iraqi quent disagreement. In 2013, tensions goals for the Region in its year’s growth figures may be negatively ployment figures indicate that more work Region’s labor market participation rates authorities to suspend payment of the over revenues and resource rights that Regional Development impacted by recent ISIS-led violence in is needed to close the skills gap in the and unemployment levels. While 67% entirety of the Kurdistan Region’s share would set off the current budget impasse Strategy. The Strategy calls the region, however. The IMF predicts Kurdistan Region’s changing economy of men in Kurdistan are active in the of Iraq’s national budget. This was espe- in Iraq were already brewing. A federal for diversification of the Region’s market, a stream- that the Iraqi economy as a whole will and reflect the strain that prolonged ten- local economy, just 14% of women in cially problematic, as over 1,4 million budgetary allocation of $646 million to lined investment process, shrink by around 0.5% in 2014, a down- sions with Baghdad have placed on the the Region participate in its labor force. are employed in the public sector. Many pay oil and gas companies operating in and a drive towards exports ward revision from original projections of regional business climate. By September The disparity also extends to unemploy- public sector workers went without pay the Kurdistan Region that year greatly in order to make the regional growth somewhere in the region of 5.9%. 2014, the unemployment rate in the ment rates. In 2011, for instance, women for months on end, further straining the undershot a KRG request of $3.5 billion, economy more competitive The extent to which this broader region- Kurdistan Region stood at 10%, having who were active in the labor market faced overall economy and denting consum- which Kurdish leaders claimed was need- and raise standards of living. al downturn will affect the Kurdistan increased from 7% at the end of 2013. unemployment levels that were over twice er confidence. A measure of budgetary ed to cover funds already owed by the Its targets include raising Region’s economy in the near term is Specifically, a lack of available credit, as high as their male counterparts. relief was provided by revenues gained federal government. tourism expenditure in the unknown. Looking at past GDP data, sanctions levied by Baghdad against the The KRG aims to capitalize on a young from growing sales of oil exported inde- In December 2014, leaders from the Region to $1.5 billion by 2017 though, gives a picture of the Region’s KRG, and a shortage of jobs that match population (over 50% of the Kurdistan pendently by the Region. KRG and the Iraqi federal government and developing the mining sector. The plan also aims to long-term growth potential. In 2012, the the skillset of new entrants into the work- Region’s population is under the age of The budget of the KRG for 2015 is announced an interim agreement to work reduce construction costs and Region’s GDP grew at a rate of 12%. In force have been identified as factors hin- 20) and build an economy characterized $17.5 billion. In 2013, the KRG’s regional collaboratively on oil exports and finally shorten timelines for project 2013, GDP growth decreased slightly but dering reductions in unemployment by innovation and equal opportunity budget stood at $13.1 billion. Even before normalize the budgetary situation of the execution to levels that remained a robust 8%. Figures from 2012, levels. When contrasted with Iraq’s overall for men and women. To do so, the gov- Iraqi authorities cut off federal funds at Kurdistan Region. The KRG has prom- undercut neighboring coun- the most recent numbers available, esti- unemployment rate of nearly 46%, how- ernment has focused on legal reforms, the beginning of 2014, budgetary dis- ised to supply 550,000 bpd of oil for sale tries by 2017. It also envisions mate the Region’s total GDP to be in the ever, the relative success of the Kurdistan skills-building programs, pension and putes marred relations between Erbil and by Baghdad authorities, with revenues to increasing investment rates area of $26.5 billion. Region’s economy despite the obstacles it benefits reforms, the development of Baghdad. The KRG is entitled to a 17% be divided between both sides. In return, to 20% of GDP, in addition to Another testament to the Kurdistan currently faces stands out. an unemployment insurance system to share of Iraq’s overall budget. That money Iraqi PM Haider al-Abadi's government raising the number of licensed Region’s upward economic trajectory is Going forward, the Kurdistan make employment in the private sector is first distributed across federal agencies has pledged to restore budget payments businesses across all sectors of the economy by 15% per the progress that has been made in raising Regional Government has set its sights seem more secure, and initiatives aimed in Iraq before it is dispersed to the KRG, to the Kurdistan Region that will, for the annum over the same period. standards of living amongst the Kurdish on increasing private sector employment, at helping women participate and get so Kurdistan’s actual share of the federal first time, include funds to pay and outfit populace. Annual per capita income in which stands at just 48.9% of the active ahead in Kurdistan’s labor market. budget has tended to settle more in the the Region's Peshmerga forces.

Fertile Ground for Investment Oil & Gas: GDP Growth USD Billion Kurdistan continues to set itself apart in Despite these setbacks, progress has That number is approaching but still The Engine of Economic Growth 30 Iraq as an investment destination. In the been made in diversifying the regional short of the $13.6 billion in capital invest- The oil and gas industry continues to form The Kurdistan Regional Government has 25 past few years, annual capital investment economy. While the housing sector had ments that have gone towards the housing the bedrock of the Kurdistan Region’s set a production goal of 1 million bpd in 20 in licensed projects in the Region grew previously dominated projects licensed by sector in Kurdistan since 2006. The KRG’s economy, and the past year has been one 2017, and 2 million bpd by 2020. 15 by nearly 400%, rising from $3.1 billion the Board of Investment (BOI), 2014 saw figures reveal that industry and housing of groundbreaking accomplishments for The Kurdistan Region exported over 10 in 2011 to $12.4 billion over the course a continuing trend towards projects in the together represent nearly two-thirds of the Region's energy sector. Independent 34 million barrels of oil in 2014. In total, 5 of 2013. There are currently around 80 industrial sector, which has emerged as capital investments and half of all capi- exports of the Kurdistan Region’s oil more than $2.87 billion-worth of oil 0 ongoing licensed investment projects in the primary destination for investment. tal investment licenses in the Kurdistan resources commenced through a newly has been sold to customers around the 2004 2006 2008 2010 2012 Kurdistan, and the total value of licensed The BOI froze licenses for projects in the Region to date. completed pipeline to Turkey. The pipe- world. One factor that may complicate GDP per Capita Growth investments in the Region over the 2006- housing sector after around 160 projects Over the same period, the tourism line currently has the capacity to trans- matters is the recent slide in world oil USD 6K 2014 period was $41.9 billion. Despite had been approved. This was done to sector has seen $6.6 billion (15.7% of port 300,000 bpd of oil to Turkey, with a prices. Experts point to an oversupply of growing investor interest and an expand- focus more on sectors such as industry, total investment) invested in a total of potential capacity of 700,000 bpd in the oil stemming from sluggish economic 5K ing portfolio of projects, recent regional tourism, and agriculture. Over the course 128 projects, while $5.1 billion (12.1% of near future. The coming year will also growth and lagging demand around the 4K turmoil has touched the Kurdistan Region of the last year, that shift in emphasis has total investment) has flowed towards 114 likely see new records set in oil produc- world, along with the glut of new supplies 3K and shaken investor sentiment. Over the borne fruit. Industrial investment licenses projects in the trading sector. Agriculture tion in Kurdistan. Aggregate production coming online in places like the United 2K first eight months of 2014, for instance, have finally surpassed those in the hous- and other sectors lag behind, attract- capacity has risen to 400,000 bpd in 2015, States, as sources of the recent slide in 1K investment in the Region had reached just ing sector and represent around 184 proj- ing less than $4 billion in combined and is projected to increase further to prices. 0 $3 billion. ects valued at a total of $12.8 billion. investment. 500,000 bpd by the first quarter of 2015. 2004 2006 2008 2010 2012

52 — Kurdistan Review Invest in Group — 53 B BUSINESS Did you know? Did you know? KRG Investment Law, Article 5: A project shall be exempt from all non-custom taxes and duties for 10 Fransabank and Blom Bank, Lebanese banks with an increasingly international footprint, years starting from the date of providing services by the project, or the date of actual production. inaugurated their first branches in the Kurdistan Region in 2014.

Calls for Reform The task of creating a truly modern bank- Aside from assured business stemming of reform legislation has actually been Building Trust ing sector will require substantial reform from federal regulations prohibiting gov- passed. Political turmoil surrounding The KRG continues to strive for a modern, dynamic banking sector to in Baghdad. While the KRG has used its ernment agencies, government employ- the rise of ISIS has only contributed to complement Kurdistan’s growing economy. Despite this, the Kurdistan Region political autonomy to fashion a largely ees, and state-run corporations from doubts about the Iraqi government’s business and investment-friendly envi- dealing with private sector banks, Iraq’s ability to implement changes in the continues to struggle under cumbersome red tape from banking authorities ronment, the banking sector falls entirely state banks gain an advantage in the minds near-term that will foster a more com- in the federal government, a lack of integration into international financial under the purview of the Central Bank of customers from the implied guarantee petitive, modern, and capable banking networks, and a legacy of distrust among the people of Kurdistan. of Iraq in Baghdad, which has the sole that state funds will back up deposits. sector. For its part, the KRG has repeat- authority to regulate the banking sector Kurdistan's regulatory and physical edly expressed its desire for reform in Opportunities & Obstacles Focus: Fransabank and issue licenses for banks to operate infrastructure for industries that could the banking and finance sectors. PM The Kurdistan Region’s economy remains four local firms that will be going public. In April 2014, Fransabank in Iraq. support a healthy banking sector should Nechirvan Barzani recently added his largely cash based and its banking sector Kurdistan is also home to a burgeoning opened its first branch in Erbil. Many experts point to regulations that also be improved. The Region’s insurance voice to the chorus of Kurdish leaders is relatively underdeveloped compared Islamic banking industry. There are cur- The bank currently operates seem to be biased in favor of large, state- sector remains very limited, mortgages calling for change, saying, “I believe the to other countries in the region. While rently six local Islamic banks in opera- in ten countries across three run Iraqi banks as key impediments to a are virtually non-existent, and a web of time has come for us to seriously exam- the standard international ratio of bank tion, along with foreign banks such as continents. Globally, Fransabank modern, competitive banking sector in confusing regulations and out-of-date ine international financial practices and branches to customers is around 1:10,000, Abu Dhabi Islamic Bank and Al Baraka. held $17 billion in assets, $14.1 Kurdistan. State-controlled Rafidain Bank technology contribute to inefficiency. carefully consider how modern banking in Iraq that ratio stands at 1:30,000. In Among the most successful local Islamic billion in deposits, $5.3 billion and Rasheed Bank, for instance, control Iraqi authorities have acknowledged can help families and businesses to man- addition to three large state-owned banks, banks is Kurdistan International Bank, in loans, and had $160 million in nearly 90% of banking business in Iraq. the need for reform, yet little in the way age their wealth.” there are around 25 local private banks which is the only Islamic financial insti- net profits in 2013. A and over 14 foreign private banks operat- tution among Iraq’s five largest banks. Lebanese banks have a very ing in the Kurdistan Region. The majority The industry is awaiting a regulatory strong presence in Kurdistan, of private interna- structure from and Fransabank’s nascent tional banks work- Baghdad authori- business there is reflective of a Banks in the Kurdistan Region ing in Kurdistan ties that is specifi- more general trend of Lebanese are from Lebanon I believe the time cally designed for banks making some of their Private Banks in the Region Islamic Banks in the Region Foreign Banks in the Region and Turkey. has come for us to Islamic banking. first forays into the Iraqi market International During the in the security and stability of Ashur International Bank for Investment Al-Baraka Bank Bank name Origin banks have an reign of Saddam Kurdistan. seriously examine Bank of Baghdad Al Bilad Islamic Bank for Investment BankMed increasing pres- Hussein, banks in Fransabank’s operations in Bank of Sulaimanyia and Finance BBAC ence in Kurdistan, international financial Iraqi Kurdistan Kurdistan focus primarily on Credit Bank of Iraq Cihan Bank for Islamic Investment and Byblos Bank Credit Libanias Lebanon but they tend to practices and carefully were frequently the corporate banking sector. Dar Es Salaam Investment Bank Finance cater to businesses looted and depos- Nevertheless, officials from the IBL Bank consider how modern Economy Bank for Investment and Finance Dijlah and Furat Bank for Development Fransabank from their home itors often found bank hope their presence in Emerald Bank and Investment Blom Bank countries and are banking can help that their savings the Region can contribute to Erbil Bank for Investment and Finance International Development Bank for Investment and Islamic Finance Al-Baraka Bank prevented from had simply van- a broader revitalization of the Gulf Commercial Bank businesses to manage Bank Asya competing in the ished, creating banking industry in Kurdistan Iraqi Middle East Investment Bank Iraqi Islamic Bank for Investment and same market seg- what North Bank’s by re-establishing trust Development Is Bank Turkey their wealth. Investment Bank of Iraq Vakıfbank ments as domes- PM Nechirvan Barzani chairman Nawzad among local customers. Khalil Mansour Bank for Investment Kurdistan International Bank for Ziraat Bank tic banks. The Jaff describes as a Zeidan, Country Manager for Investment and Development Mosul Bank for Development and past year saw important steps forward, “deep-seated mistrust in banks.” For res- Fransabank in Iraq, referenced Investment Standard Chartered United Kingdom though. The UK’s Standard Chartered idents of Kurdistan today, trust in the the group’s efforts to restore National Bank of Iraq State Banks in the Region Bank opened a new branch in Erbil, regional banking infrastructure continues public confidence in Kurdistan’s North Bank Rasheed Bank becoming the first major international to be undermined by recurring liquidity banking sector, explaining, “We Sumer Commercial Bank Rafidain Bank bank with comprehensive operations in crises. Lingering doubts about the safety are really new here. We are Union Bank of Iraq Trade Bank of Iraq the Region. In another landmark devel- of their money with local banks have led going to reach the personal United Bank for Investment opment for the finance sector, the Erbil the Kurdish people to turn to practices market. It is our mission to Warka Bank for Investment and Finance Stock Exchange prepared to launch at such as hiding savings in their homes or educate people and have them the beginning of 2015 with the help of investing in gold as a store of value. put their trust in banks.”

54 — Kurdistan Review Invest in Group — 55 B BUSINESS

Boosting Trade for Growth Focus: Attracting Investors

IIG: How would you characterize the factors on the ground, the Kurdistan IIG: Can you provide us with some spe- IIG: Do you look primarily for foreign environment for trade and industry in Region has attracted over $39 billion of cifics on the ESX? institutions to underwrite IPOs? Kurdistan? What are your key projects investment over the last decade. RZ: We are working under the man- RZ: The first stage of an IPO is difficult in 2015? We believe that FDI will provide new date of the Iraq Securities Commission, for foreign investors because they have SS: While negative effects on regional employment opportunities, bring us which has the same listing procedures to comply with Iraqi law and the Iraq trade because of recent regional develop- know-how, and improve local produc- as the Iraq Stock Exchange. We are Securities Commission’s procedures. ments have been perceived in many econ- tion. Despite the recent regional turmoil expecting an initial capitalization of But all locally incorporated companies, omies, we believe that Kurdistan has been on our borders, we expect FDI to contin- $300-400 million. We have a consultant even private LLCs, can convert to a public able to successfully manage these fluc- ue over the coming years since Kurdistan contract with the Louis Berger Group. joint stock and then do their listing on the tuations. Also, problems between Erbil presents many advantages as a destination As a consultant, they are doing work stock exchange. We are negotiating two and Bagdad because of disagreements for foreign investment. in terms of listing, infrastructure, pro- settlements with them on the types of over the budget affected our economy. cedures, and training brokerage firms trade that will take place on the exchange. Samal Sardar — We are happy, however, to be solving the IIG: What are the Ministry’s plans to Raad Zahid — here on how to be licensed. We expect Minister of Trade and Industry budgetary and oil export issues with the further increase the economy’s attrac- CEO, Erbil Stock Exchange (ESX) to take four companies in the insur- IIG: What is your medium-term target? central government. tiveness for FDI? ance and construction sectors public on RZ: When the market gains momentum Samal Sardar explains why he In 2015, we have four priorities: reg- SS: Over the last few years, Kurdistan Raad Zahid discusses the ESX’s the ESX. We have licensed two brokers. and starts to work in the medium term, believes the Kurdistan Region ulating the market, amending laws and has undertaken institutional reforms to initial market capitalization and There are another two that are fulfilling we are targeting almost 40 qualified com- remains an attractive destination for regulations, setting up four industrial improve the environment for doing busi- plans to attract foreign investors. the requirements for ESX to trade as a panies from Kurdistan to be listed on the foreign investment and discusses zones, and boosting our trade ties with ness. We have simplified procedures to licensed broker. stock exchange. Some of them are doing the Ministry of Trade and Industry’s our neighbors. Our main objective, how- reduce the time needed to obtain licens- evaluation, and we are helping them by plans for economic reform and ever, is to set up four industrial zones in es and revised the forms related to the IIG: How confident are you that the looking at a financial advisor to evaluate growth in 2015. the Kurdistan Region in 2015. We strong- payment of taxes and fees. Our focus is ESX will have enough liquidity to be their balance sheet and assets until they ly believe that building those industri- to amend laws and regulations to invite attractive to investors? comply with all the procedures that we al zones is critically important for the more companies. RZ: Liquidity will come with the mar- require as a stock exchange. With four Region’s economic development. We have prioritized three sectors– ket. Once the market opens, a lot of companies in the first six months, I expect industry, agriculture, and tourism– which businesses will see that there are open- that we might double that in one year of In 2015, we have four are playing a critical role in our FDI pol- ings for foreign investors and that they business. priorities: regulating icy. We will continue to invite foreign can enter this market easily. The pros- companies to invest in those sectors. We pects for growth and capitalization in IIG: Turkish, Lebanese, and Emirati the market, amending are planning to organize visits abroad in Kurdistan are better than in the rest of companies have strong economic ties laws and regulations, order to promote investment opportu- Iraq. Security-wise, communication and with the Kurdistan Region. Do you nities in Kurdistan, especially in those transportation are easy here. These are expect their involvement? setting up four crucial sectors. all factors that will add to liquidity once RZ: We have many Turkish and industrial zones, and the market opens. Lebanese banks that are working in IIG: What would you say to those in the Kurdistan now. There are a lot of for- boosting our trade ties foreign business community who are IIG: How can the ESX ensure accurate eign companies from Lebanon, the UAE, with our neighbors. concerned about recent regional events? disclosure to investors of quarterly and Turkey in joint ventures with locally SS: Kurdistan is a safe, stable region with financial statements? incorporated companies. Actually, if you IIG: How would you characterize the functioning democratic institutions. We RZ: Apart from the Iraqi standard of pro- look at companies that are now listed on FDI environment in Kurdistan? believe that the current situation will be About ducing balance sheets and evaluations for other stock exchanges, like Dana Gas, SS: First of all, Kurdistan has a favor- short-lived. It is important to remember Raad Zahid holds a B.A. in Economics the companies, we are trying to impose Abu Dhabi Islamic Bank, and TAQA, able legal framework for foreign invest- that we have managed to establish a free from Basra University and M.A.’s in the international accounting standard they might do a dual listing of up to ment. We have one of the most friendly market economy and democratic insti- Econometrics from Essex University and for that reporting so that all the materi- 20-30% of the stocks they listed in their Finance from Strathclyde University. investment laws in the region. Secondly, tutions. We understand the concerns al things, like balance sheets, cash flow, original market according to the rules Prior his current post, he worked Kurdistan enjoys political and social sta- that come from recent events. We want for over 30 years at the Abu Dhabi profits, and losses, will be transparent to and regulations there. In the future, it bility. Thirdly, the KRG strongly supports peace and stability, which are the only Investment Authority (ADIA), where he investors. On a quarterly basis, we are depends on their needs and how they FDI to increase the economic growth of ways to guarantee that we can achieve led several strategic initiatives for the trying to let companies disclose all the look at Kurdistan’s market. If they do a Kurdistan. Fourthly, the Region has enor- our aspirations for social and economic firm’s alternative investments and fixed information related to the stocks they are dual listing after the first year, that will mous natural resources. With all those development. A income and treasury departments. listing in the market. be a positive sign for us. A 56 — Kurdistan Review Invest in Group — 57 B BUSINESS

Trust in Me

IIG: How has your portfolio evolved since the creation of Asia Insurance? JA: Asia Insurance began operations in mid-2012, and it’s now the leading insur- Our portfolio has er in Kurdistan and second in Iraq. Our grown tremendously, portfolio has grown tremendously, from $1.2 million to $15 million in 2014. The from $1.2 million to critical factor for success is purely cus- $15 million in 2014. INSIGHT — tomer satisfaction and positioning our- selves as buyers of insurance. Therefore, Teaming up with the Iraq-Britain Business Council we have tailor-made insurance solutions world’s best insurance that fit the best interests of our business baroness Nicholson provides insight into the Jamal Asfour — partners. In addition, teaming up with players, such as Swiss activities of the IbbC and discusses the many CEO, Asia Insurance the world’s best insurance players, such Re, Munich Re, and as Swiss Re, Munich Re, and Zurich opportunities in Iraq and the Kurdistan Region Jamal Asfour speaks with IIG Insurance Group, strongly elevated our Zurich Insurance for UK business and investment. about Asia Insurance’s growth reputation as the partner of choice. since 2012 and outlines urgently Group, strongly needed reforms for Kurdistan’s IIG: In which sectors of the economy are elevated our reputation growing insurance sector. your services most required? as the partner of Baroness Nicholson of arranges frequent trade delegation visits, Vice Chancellor during the trip. JA: As risk carriers, our role is to pro- Winterbourne — varying in location between Baghdad, Any IBBC member company can tect the balance sheets of corporations as choice. Executive Chairman, Iraq Britain Basra, and Erbil, where we also have per- come to the sector meetings. We have well as the personal wealth of individuals Business Council (IBBC) manent offices. now created a new category of mem- from sudden and unforeseen events. Thus, the KRG will need to have a clear vision ccording to recent figures, Iraq’s For the first time, the most recent visit bership geared towards universities, insurance is a necessity for everyone, but and dialogue with the insurance sector economy has expanded dramati- to Iraq included representatives from our paralleling that which exists already for its scope and coverage varies from one sec- in order to tackle issues in an efficient Acally in recent years. Its GDP has Education and Training Sector Table. The companies. Bath Spa University in the tor to another. For instance, oil companies manner. Then, we as insurers will be able doubled since 2003, and the World Bank committee meets regularly to discuss West of England is our first member require very high liability insurance cov- to innovate and launch awareness cam- now says that over each of the past two ways in which British companies work- in this category. The Table is also keen erage, whereas a retailer’s main concern is paigns to improve the attractiveness of years, the economy grew by more than ing in Iraq can help educational provi- to encourage more provision in Iraq of the protection of its goods and properties. our products and educate the public on 8%. Iraq’s own Central Bank predicts even sion there. Thirteen senior representatives English language teaching, since good risk management. higher growth. It is a story repeated in of British higher education, some from knowledge of English is a gateway to IIG: What can be done to improve the very few other markets around higher levels of employment and attractiveness of the insurance sector IIG: What needs to be done to enhance the world. Despite its troubles, to courses overseas. in Kurdistan? the regulatory environment, and what Iraq is becoming a nation that IBBC members also hold JA: Massive efforts are needed to achieve challenges will the insurance sector face cannot be ignored, and for all the The IBBC's expansion into Erbil regular sector tables on energy, the desired insurance sector and will in 2015? right reasons this time around. financial services, construction, require the collaboration of various stake- JA: The market strongly needs an efficient The IBBC’s expansion into has proved hugely successful and infrastructure. holders, starting with the KRG. Three insurance commission that will be able to Erbil has proved hugely suc- and most beneficial to the It is very clear that the UK decades ago, all countries in the MENA control and audit the insurance sector, as cessful and most beneficial to Kurdistan Region. We enjoy the is one of Iraq’s most favoured region had the same issues that Kurdistan well as act as a protector for the insurance the Kurdistan Region. We enjoy nations, and our members must About is currently facing. They started with var- industry by eliminating the leakage of the highest-level of government highest-level of government continue to take full advantage of Jamal Asfour holds an Accounting ious risk management measures, which premiums out of the Kurdistan Region. support from the UK and the EU. the opportunities now presenting and Finance honors degree from the began with third party motor liability, The operational challenges insurance We are also fully supported in our support from the UK and the EU. themselves in this particular part UK. He worked for a leading Jordanian and then extended to include other areas companies are currently facing are due goals by the Iraqi Government, of the Middle East. Yes, there are insurance company for 6 years, where of risk mitigation such as workers’ com- to the political situation that affected the KRG, and the Iraq National Investment ancient and some from newer univer- serious obstacles for all. However, with he was the business development, pensation coverage, earthquake insur- whole economy. Clients are cutting down planning & research director. Munich- Commission. But the IBBC is more than a sities and institutions, were included in knowledge, skill, and professionalism, ance, contractors’ insurance, liability for costs due to the loss of revenue, and insur- Re selected him as one of the most business initiator. It promotes best practic- the delegation. All were keen to revive these can all be dealt with and controlled. promising candidates in the MENA the hospitality industry, and others. So ance premiums are regarded as the easiest es and international standards, along with the historic academic linkage of the UK Iraq is a wonderful and astonishing region. In 2013, MENA Insurance Review the key is to benchmark other countries costs to eliminate. As a domino effect, transferring technology and know-how. and Iraq. “Education is the start, middle, nation. Despite its present, its future is chose him as one of the most powerful by learning from their experiences and the reinsurers are either withdrawing or As well as holding major trade confer- and finish of almost every aspect of recon- very bright. We want to ensure that our 50 people in the insurance industry in then adopt what’s suitable for the current re-evaluating prices commensurate with ences in London and Iraq, the IBBC also struction and development in Iraq,” said a members play a very big part in that. A the MENA region. economic situation in Kurdistan. Thus, the high levels of anticipated risk. A 58 — Kurdistan Review Invest in Group — 59 B BUSINESS

Long-Term Investment Building Industrial Capacity

IIG: What are some of the challenges to its simplicity, there is major poten- IIG: To what degree does Azady of Slemani’s heavy industry sector. Azady that firms expanding into the Kurdistan tial for expansion in the sector. There is Industries benefit from local strength Industries already has the largest galva- Region face? a lot of flat plain land, especially south in industry? nization pool in the country. This allows PB: Finance is the fundamental challenge. of Erbil, that is astonishingly empty. It DS: The industrial strength of Slemani us to make power transmission towers Particularly when smaller companies does not require a new economy or new is very important for us. Most impor- for both federal Iraqi utilities, as well as enter the market, banks tend to be hes- markets; people will always eat, regard- tantly, factories in Slemani produce the the KRG Ministry of Electricity. Previous itant to lend capital to investors coming less of oil exports or other economic fac- raw materials that we use, namely steel. to this, these transmission towers had to to Iraq. There is very little understand- tors. It will also underpin food security Currently, the steel plants in Slemani use be imported. Making structures such ing and empathy for ventures in Iraq. It is for the Iraqi population. Additionally, scrap to create their products. While this as these in Kurdistan only makes sense, assumed, sometimes for good reason, that once demand is met within Iraq, there works on a small scale, most major steel and with growth in industrial capacity in it is a high-risk investment environment. is significant potential for exports to producers use mined iron ore to make Slemani, this is now happening. Even when the businesses themselves are Iraq's neighbors who do not have the steel. Faruk Holding is working to estab- Paul Bailey — quite capable, the perception is that the arable land that Kurdistan has, such as Dilshad Shakir — lish such a system, and to begin min- IIG: Which sectors provide your largest Managing Director, Definitus business landscape is difficult to navigate, Saudi Arabia, Qatar, and Kuwait. Gulf CEO, Azady Industries ing iron ore outside of Slemani, which clients? that there is significant political risk, or countries are buying large tracts of land would increase the volume of local steel DS: The Ministry of Electricity is a major Paul Bailey provides IIG insight into that bureaucracy and red tape will increase in Eastern Europe and Africa to ensure Dilshad Shakir speaks to IIG about production massively. Azady Industries client. They have plans to expand trans- the investments and opportunities costs. So, there are many challenges, some their food security, but with Kurdistan the role that Azady Industries is would benefit from such expansion, as mission lines to sufficiently cover all of that Definitus finds appealing in perhaps exaggerated, that make would-be as a much nearer neighbor, it could be a playing in the development of steel would be easier and cheaper to Kurdistan. While they have, in the past, the Kurdistan Region, as well as the lenders hesitant to lend capital. much more strategic source for imports Slemani as a center for heavy source. Currently, when local producers used foreign companies to supply these, challenges that Definitus addresses or investment. An enormous amount of industry in Iraq and the broader cannot meet our needs, we must import we are now stepping into that role. We are in Kurdistan’s private equity market. IIG: What role are local banks playing grain is shipped daily to the gulf coun- region. steel from Turkey, which is costly. The also supplying towers for similar expan- in the Region’s financial development? tries from around the world. However, if challenge to developing these iron ore sions of transmission lines throughout PB: Attaining financing from local banks it came from Kurdistan it would reduce mines, currently, is regulatory. We are the rest of Iraq. In the telecom sector, is possible, but also carries its challeng- shipping costs, and, at times of pinched awaiting the development of a legal Azady Industries has already estab- es. Local banks are wedded to the idea supply, decrease the risk that shipments framework that will allow us to take lished itself throughout the country as of using land as collateral for the loans are diverted. advantage of these local resources and a partner of choice for the three major they extend. That is very problematic begin mining. mobile operators, Asiacell, Korek, and for foreign companies expanding here, IIG: How would you assess the liquidity Zain, and supplies their cell towers. We because land ownership is quite difficult of the Iraqi private equity market? We were the first company to have ISO provide high-quality solutions for setting for foreigners. Some banks, in very limit- PB: I would describe the market as sur- up GSM towers in areas with challenging ed circumstances have deviated from this, prisingly liquid. While most of the busi- quality certification for both quality geography and weather, cost effectively. which is encouraging. For major projects, nesses operating here today are too small management and oil and gas areas, and for example, there can be a degree of con- to employ major investment banks to be IIG: What expansions have you been fidence that encourages banks to lend. For value them, to raise capital for them, or we are currently working on getting ISO working to complete in 2015? day-to-day business, however, loans are to deal with mergers and acquisitions certified for our testing laboratory. DS: One of the major areas that we have available but often challenging to acquire. for them, there are investors out there to been investing in recently has been our Additionally, lending periods are short buy stakes in firms. We are quite com- quality control laboratory. We were the and interest rates tend to be very high. fortable with the investment environ- IIG: How do you view the evolution of first company to have ISO quality cer- ment here. We find that the discount on heavy industry in Kurdistan? tification for both quality management About IIG: Are there any up-and-coming sec- equity, caused by the lack of competition DS: The foundation is already built for and oil and gas areas, and we are current- Paul Bailey has served as Definitus’s tors that you might point investors in here, makes Kurdistan a very worthwhile Slemani to become a major industrial ly working on getting ISO certified for Managing Director since the company’s the Region to? place to invest. We anticipate continued center for the region. As we create galva- our testing laboratory. We already have founding in 2012. Bailey previously PB: We think that much new growth growth in the next several years, but also, About nized steel for construction, transmission the equipment to assess the strength and practiced as a lawyer at a premier Wall will come from agriculture. Growth in as success stories of recent growth in the Dilshad Shakir has served as CEO towers, and communications towers, we integrity of all of our products in a num- Street law firm’s project development of Azady Industries for the past two the sector is not simple; there are issues past few years reach global investors, we rely on steel, but also cement, as a comple- ber of ways. The certification processes, and finance department in London years. Previous to his tenure at Azady and Abu Dhabi, and has worked in with technology transfer and getting peo- anticipate that more capital will be drawn Industries, he served for 31 years at the mentary good for the structures we build. and more importantly the lab and qual- the Kurdistan Region and wider Iraq ple interested in it. However, to address to the Region. In this regard, we believe KRG Ministry of Electricity. He holds a Once Slemani’s steel factories can use raw ity control processes themselves, truly since 2007. Bailey holds an MA in the challenges, we keep our investment that there is significant upside to invest- degree in Electrical Engineering from iron rather than recycled scrap, this will demonstrate our international standards Jurisprudence from Oxford University. simple, in corn and wheat. In addition ing here. A the University of Slemani. only improve the efficiency and capacity of quality to our clients. A 60 — Kurdistan Review Invest in Group — 61 B BUSINESS

Focus: AmCham in Kurdistan ANALYSIS— he US business communi- will serve as a center for information AmCham-Kurdistan also has region- ty, increasingly finding its way and advice on trade, investment, and al ambitions. Among its initial proj- Turkey: The Kurdistan Region’s Largest Trading Partner Tinto the growing sectors of the commerce, as well as customs duties, ects will be integration into the Middle Kurdistan Region, will soon find addi- tariffs, and regulations in the US and East Commercial Center (MECC). The tional support in the Region. The US the Kurdistan Region. MECC is a regional commercial body Christina Bache Fidan — Chamber of Commerce operates foreign The stated mission of AmCham, composed of business communities, affiliate offices around the world under according to the US Chamber of non-governmental organizations and nkara-Erbil relations significantly Turkey's dependence on foreign sources open a refugee camp in Duhok, with a its American Chambers of Commerce Commerce, is to advance the interests of inter-governmental organizations from deepened and widened to cover for 95% of its oil and natural gas needs total capacity of 35,000 people and con- Abroad program, or ‘AmCham’. American business abroad and to serve around the Middle East. Jaff met in Asecurity, economic, political, and served as a driving force for its deepen- tinue providing additional humanitari- Kurdistan’s first AmCham office will open as a bridge between nations to repre- February 2014 with leaders across the cultural dimensions over the last decade. ing relations with the KRG. This strategy an support for IDPs and Syrian Kurdish in Erbil in 2015. The project, executed by In particular, economic relations expand- worked to prevent oil delivery disrup- refugees who sought refuge in Turkey or Kurdo Bebak Jaff, will support US compa- ed with more than 1,300 Turkish com- tions from the Kurdistan Region that the KRI. Turkey’s support for the KRG is nies when entering the Kurdish market, panies registered by the KRG. Strategic could inflict a debilitating blow on the important as the Region hosts over 1.5 support Kurdish companies with inter- sectors such as banking and finance, Turkish economy. President Masoud million IDPs from across Iraq and a few ests in the US, and pair American and infrastructure, oil and natural gas, exports, Barzani’s announcement that 150,000 hundred thousand refugees from Syria. Kurdish companies for joint ventures and and education have a robust Turkish barrels per day of crude oil from the During the previous month, Ankara partnerships. With support from KRG presence in the Kurdistan Region of Iraq officials, members of the US Government (KRI). Extensive infrastructure projects and private sector, and the local business strengthened the economy, created jobs community, the project was launched in and facilitated the delivery of public ser- November 2013 in a high-profile event in vices. Since 2003, the construction sector Erbil. The opening of AmCham, accord- experienced above-average employment ing to Jaff, “will start a new chapter in growth and a substantial share of employ- economic relations between the US and ment. According to a Finnish-Swiss the Kurdistan Region.” report, approximately 75% to 80% of the According to Jaff, US investment in construction business, including roads, the Kurdistan Region, already notewor- tunnels, silos, dams, housing projects, thy, is set to increase further in coming and major airports, was undertaken by years. AmCham-Kurdistan will build Turkish companies. By 2013, Turkey’s upon the growing interest in US brands sent the concerns and interests of the Middle East at one of the MECC’s initial trade with Iraq amounted to $11.9 bil- and products in Kurdistan, primarily business community at the highest lev- conventions in Jordan, and has taken lion, making Iraq Turkey’s second biggest targeting sectors where US companies els of government and business. Kurdo steps for AmCham-Kurdistan to become export market and Turkey Iraq’s, including are underrepresented in the market for Jaff has been building these bridges for an active member of the organization. the KRG’s, largest external trading partner. its investment promotion programs. some time now. He has a long history The Center is working to improve the Over the first five months of 2014, These sectors include banking, finance of organizing commercial and trade business and economic environment exports to Iraq had already equaled $5.4 and insurance, agriculture, healthcare, delegations between the US and Iraq, throughout the Middle East. Its initia- billion, an increase of 11%. The econom- Kirkuk oilfields would begin to flow to allowed the safe passage of Peshmerga education, environmental management, having served several years with the US tives include improving market access ic tide changed in June 2014, when ISIS Turkey and the recent hydrocarbons forces to the besieged Syrian border hospitality, and construction. Jaff stress- Government, focusing on commercial and the movement of goods through seized control of Mosul, Iraq’s second larg- agreement between Erbil and Baghdad town of Kobane to support YPG mili- es the importance of US investment into affairs and business promotion at the US the Middle East by developing trade est city, and blocked major trade routes provided opportunities to resume unin- tia operating in the city as part of the these sectors: “The innovative nature of Embassy in Baghdad. In 2014, Jaff orga- corridors, improving natural resource to the south. On July 2, 2014, the Turkish terrupted energy flows. international coalition to combat ISIS. American firms has the potential to nized a delegation to visit commercial cooperation, and developing special Exporters Assembly (TIM) reported that Prime Minister Ahmet Davutoglu Prime Minister Nechirvan Barzani’s greatly improve the dynamism and effi- organizations including the US Chamber economic zones to encourage invest- Iraq had dropped to Turkey’s third larg- and President Masoud Barzani discussed subsequent visit to Turkey in December ciency of many sectors in the Kurdish of Commerce in Washington. He intends ment. The MECC also seeks to serve as est trading partner, falling behind Britain. an array of issues regarding economic, reiterated the strength of Ankara-Erbil economy and improve economic growth to continue leading trade missions to a platform for collective policy action Within a short time period, trade with energy, political, and military coopera- relations during a time of uncertainty throughout the Kurdistan Region.” the US, which will support Kurdistan's to expand economic prosperity in the Iraq had decreased 21%. Trade between tion during Barzani’s trip to Ankara in in the region. Sustained cooperation on Once open, AmCham-Kurdistan will businesses through increased ties with region. These regional goals, believes the KRI and Turkey remained relatively on July 2014 and Davutoglu’s trip to Erbil economic and security relations between support businesses in a number of ways. US firms. One of AmCham-Kurdistan's Jaff, will improve business and increase track as Turkish business representatives in November 2014. In Erbil, Davutoglu Ankara and Erbil is necessary to manage It will host events that bring the US and major initial activities will be the facilita- investment in the Kurdistan Region, utilized the secure environment of the KRI confirmed Ankara would send mil- the ISIS threat and address refugee flows, Kurdish business community together tion of two delegations of US businesses benefitting both local and American to launch trade with other regions of Iraq itary advisers to train members of the irregular internal migration, and the dis- with US and Kurdish public figures, and to the Kurdistan Region in 2015. businesses in the Region. A facing precarious security situations. Peshmerga. Turkey also announced it will ruption of economic activity. A 62 — Kurdistan Review Invest in Group — 63 B BUSINESS

ANALYSIS— The Success of Economic Regionalism Kurdistan needs the Iraqi market, and Baghdad will benefit from in the Kurdistan Region an economically prosperous and politically stable Kurdistan. A misguided fear of Kurdistan’s economic success and its political Dr. Anwar Anaid explains the success of the Kurdistan autonomy is the remnant of a discredited political culture inherited Region's economic regionalism, and why the Region's stability and prosperity are crucial for Iraq. from decades of centralist and militaristic rule in Iraq.

Dr. Anwar Anaid Lecturer, Political Economy, University of Kurdistan-Hewler Closer Economic Ties with Turkey

egional economic policies imple- 2. Developmental economic poli- the oil-for-food program. Nevertheless, After 2003, the Kurdistan Region became economic and political relations between About mented by the Kurdistan Regional cymaking does not occur in a social or divergent policies and a more democrat- increasingly integrated with the rest of the KRG and Ankara. Alongside the con- Dr. Anwar Anaid received his PhD in Government (KRG) are an political vacuum. When ethno-cultural ic political context for development in Iraq. Budgetary interdependence and tinuing marketization of Kurdistan’s econ- Government and International Relations R from the University of Sydney in 2010 important factor in the economic suc- composition and other local attributes Kurdistan gradually led to the establish- political re-engagement encouraged omy, these changes produced significantly cess of the Kurdistan Region over the last are considered in the establishment of ment of unique regional economic condi- the re-integration process. At the same higher levels of economic growth and a and his BA from the University of New decade. The KRG’s regional economic economic micro-regions, a stable base for tions that would help lay the groundwork time, the KRG actively consolidated the developmental trajectory in the Kurdistan South Wales in Politics & International Relations and Economics in 2003. Dr. strategy constitutes a radical departure economic development is created. Ethno- for ambitious economic regionalism. regionalization of its economy within the Region that diverged substantially from Anaid taught at the University of Sydney from the status quo in Iraq, a country culturally homogenous sub-state regions In the wake of the 2003 Iraq War, the limits of the Iraqi constitution. It often the rest of Iraq. before joining UKH. He often comments that has always emphasized centralized have both the sense of purpose and the KRG was able to link Kurdistan’s market faced fierce resistance in doing so from Small regional economies like that in international media as an expert on policymaking. On a broad-based level of flexibility for competitive engagement to the global economy by encouraging an federal authorities in Bagdad who had a of the Kurdistan Region are more com- economic and political developments in analysis, the regionalization of economic in broader regional and global markets. influx of foreign investment, promoting strong appetite for centralization, despite petitive because of their flexibility in the Kurdistan Region. management is supported by the follow- The implementation of micro-regional the private sector, and paving the way the socio-political restructuring that had adjusting to the rapid structural eco- ing factors: economic policies explains the economic for the marketization of the local econ- occurred in post-Saddam Iraq. The Iraqi nomic changes that characterize the 1. The global economy is undergoing success of many sub-state entities, includ- omy. The smaller size of the Kurdistan federal government failed to use the modern global economy. Incorporating two complementary structural changes: ing Scotland and Catalonia in Europe or Region’s economy and its relatively cohe- Kurdistan Region’s economic success as ethno-religious, cultural, and historical a) Micro-regionalism, or the decen- Quebec in North America. sive socio-political structure gave KRG a model for the rest of Iraq and was more factors into regional economic devel- tralization of economic management Favorable conditions for the devel- decision-makers more flexibility. In the inclined towards re-centralizing policies opment plans for the rest of Iraq would to regions within countries, where opment of a regional economy in the following years, Kurdistan’s oil and con- designed to contain the KRG’s efforts to form a stable socio-economic base for the economic policymaking is devolved to Kurdistan Region gradually emerged struction sectors attracted a substantial assert regional autonomy, particularly in micro-regionalization of the Iraqi econ- sub-state regional governments. The after the de facto separation of Kurdistan amount of global capital to the Region. the oil sector. omy. This, in turn, would contribute to decentralization of economic manage- from the rest of Iraq in 1991. Prior to this, The KRG is also aware of its compar- The global trend towards macro-re- the overall economic development of the political autonomy is the remnant of a ment to smaller regional economies the Kurdistan Region had been locked in ative advantage in other areas such as gionalization required access to wider country. It would also deliver a platform discredited political culture inherited increases the competitiveness of these a hostile geopolitical environment that agriculture, water resources, and tour- national and regional markets for the to pursue local political ambitions and from decades of centralist and militaris- markets by enhancing their ability to aimed more for its destruction than its ism. However, the development of non- Kurdistan Region. The KRG promoted the create an environment of healthy eco- tic rule in Iraq. adjust to rapid changes in the global successful economic development. In the oil sectors requires regionally adjusted Kurdistan Region as a largely independent nomic competition among the regions of The economic and socio-politi- economy. years since the Region achieved autono- policies that address the negative conse- economy with a distinctive ethno-histori- Iraq. Furthermore, these policies follow cal empowerment of Iraq’s distinctive b) Macro-regionalism, or the pooling mous status, though, its unity of purpose quence of a dependency on oil income cal character that was looking for greater current global economic trends and will regions, not a policy of centralization of national markets partially managed and relative ethno-cultural homogene- that often defines resource-based econ- recognition outside Iraq. In the meantime, pave the way for the healthy and mutually designed for the purpose of domina- by suprastate entities (e.g. the European ity have contributed to a developmen- omies. Such policies could include chan- the Iraqi government’s outdated and alien- beneficial reintegration of all Iraqi regions tion and control, is the key to a suc- Union). Macro-regionalization enables tal trajectory very different from that of neling oil revenues towards the education ating centralist policies combined with in the long run. cessful and prosperous Iraq. Given the national economies to become more other parts of Iraq. The developmental and infrastructure sectors, in addition the Kurdistan Region’s increasingly con- Kurdistan needs the Iraqi market, fundamental divisions reflected in the competitive in the global economy by divergence between Kurdistan and the to capital investments in modernization structive economic ties with Turkey to and Baghdad will benefit from an eco- internal and external socio-political forc- allowing them to access additional mar- rest of Iraq was initially limited in light efforts and human capacity development produce a drift away from Baghdad on nomically prosperous and politically es that are now pulling Iraq apart, any kets and affording them greater global of the influence of common econom- needed to build a productive and com- the part of Iraqi Kurdistan’s leaders that stable Kurdistan. A misguided fear of attempts at renewed centralization will market power. ic constraints such as dependency on petitive labor force. occurred in parallel with the warming of Kurdistan’s economic success and its be counterproductive. A 64 — Kurdistan Review Invest in Group — 65 B BUSINESS

Driving Growth Facilitating Investment

IIG: Which demographics and seg- shifts between the regions, because IIG: How did RS come to be Iraq’s ST: Private equity is a different ball ments of the market do you find most we cannot move vehicles between the premier brokerage firm for foreign game. The challenges facing private equity promising for the growth of car owner- Kurdistan Region and federal Iraq. I hope investors? are more significant in many respects than ship in Kurdistan? that eventually there will be some sort of ST: For any firm to become premier in the challenges facing stock market inves- FA: The country has displayed very a free zone between the two or between any industry requires hard work and team tors. However, at this stage of Kurdistan’s fast growth in the past few years– it has neighboring countries, so that we can effort. We are in a service industry, and, development, private equity funds will been the fastest growing country in the import the vehicles directly into the free according to our clients’ testimony, we have increasing numbers of opportuni- region. As GDP per capita increases to zone and then move cars to Kurdistan or have managed to provide quality service ties. The country and the KRG are like an approximately $5,000 per year, we will federal Iraq as per actual demand. This not only by Iraqi standards, but also by open canvas, and they can draw whatever begin to see more and more families and would make our operations much more global standards. When I first moved back they want on it. Alas, while things are individuals buying cars with better qual- efficient, to the ultimate benefit of our to develop the firm in Iraq, I had to answer quickly changing, I believe that private Moh’d Fuad Anaswah — ity– more than just a means of transpor- end customer. Shwan Ibrahim Taha — a simple question: if I were in my previous equity funds would still encounter sig- CEO, Niva Car Trading tation. People begin to look at cars as a Chairman, Rabee Securities (RS) position, a fund manager working for the nificant difficulties while investing here, means of entertainment and seek smart, IIG: To what extent does access to likes of Templeton and Soros, what type as the Iraqi and Kurdish investment envi- Fuad Anaswah provides IIG insight green, and luxurious automobiles. We finance limit people’s ability to buy cars Shwan Taha provides IIG with of intermediary would I want to assist me ronment for private equity is still largely into the opportunities, as well as broadly cover the market from the low- in Kurdistan? Is this changing? insight into the growth and while investing in a very difficult and new underdeveloped. the challenges, in maintaining the er end up to the higher end. Ford suits FA: Access to finance is one of our major evolution of the Iraq Stock market? RS was modeled as an answer to skyrocketing growth of the Kurdis- this strategy very well. It is not cheap, challenges, both as a company and for Exchange (ISX) and the Erbil Stock that question. There were no short cuts IIG: How do you foresee the over- tan Region’s retail and fleet auto- but it is not expensive, and it offers very retail finance for our customers. Some Exchange (ESX), and discusses and the development did not happen over- all development of the ISX and Iraq’s mobile sector and explains how high value for the money. We start with local banks do offer retail financing the opportunities and challenges night. This is now six years in the making. investment environment in the medi- Niva has become a central player in small, entry-level cars and move up to for car loans. This is at high rates, with of investing in stocks and private As our reputation grew and we were able um term? the market. higher-end luxury cars and trucks. In short repayment periods. However, it equity in the Kurdistan Region. to increase interest in the market, clients ST: Although the ISX’s market cap has coming years, we expect overall increases is inconsistent at this stage. Some loans started to approach us, and we increased increased quickly, it has done so from in demand for luxury, safety, intelligence, are easy to acquire; some are very dif- our market share, dominating the ISX. a very low base. Thirty years of war and comfort, and we are well positioned ficult. Financing through banks is still and sanctions have taken their toll on to provide that. somewhat below our expectations and IIG: Does RS intend to get involved in the economy and the development of ambitions. Because retail financing is the ESX? Is there interest regarding the the market. Banks and telecom domi- IIG: In what ways have you stream- crucial to car sales, we believe that our ESX coming from the fund managers nate the ISX in terms of market capital- lined the process of getting cars into sales numbers will also grow as financing that you work with? ization. However, this is normal at this the country? improves. ST: We certainly intend to be part of the stage of the ISX’s development. We will FA: Logistics does present major chal- ESX, and we are looking forward to being start seeing other sectors coming to the lenges. For our cars coming to Kurdistan, IIG: Car insurance is still not widely brokers and bankers taking advantage of market and increasing their presence in we import cars through Turkish ports used in Kurdistan. What is your take on the opportunities the ESX will provide. the future. Our clients are very aware of and truck them to our local show- the future of the auto insurance sector? The interest from our clients in investing these shifts in other markets, and we are rooms. Because of regulatory differ- FA: When our customers purchase cars, About on the ESX is also there. However, mar- looking forward to seeing such shifts on ences between the KRG and Baghdad, we heavily encourage them to buy car Shwan Taha has been Chairman of kets are only as good as the companies the ISX. There is no reason why the ISX About these cars can only be sold in Kurdistan. insurance. The sector itself is grow- Rabee Securities since 2008. Taha listed on them. We are therefore optimis- should not be as big as the markets in Fuad Anaswah has been the CEO of Safety and quality standards in the KRG ing, with Asia Insurance serving much came to Rabee Securities with over ten tic that, in addition to directing funds to Saudi Arabia or Turkey. With the right Niva Car Trading since 2011. Previously, are very strict. While our cars all meet of the market. However, the culture of years of experience managing money invest on the ESX, we will be instrumental economic policies, that development he was the founder and CEO of KADDB these standards, the compliance proce- using insurance has not yet been inte- in the MENA region, first working in bringing new companies to the market could be achieved quickly. Obviously that Investment Group and Managing dure is expensive and time consuming. grated into society. Of course, shifting in emerging markets at Franklin as well. Having facilitated Asiacell’s IPO will also bring with it increased liquidity Director of Jordan Light Vehicle Templeton from 1997-2006, before This procedure has not yet been imple- risk to insurance companies is preferable in 2013, we are well positioned to do so. and the attention of the larger pension Manufacturing, KADDB's Jordanian- managing a hedge fund sponsored by British joint venture. He holds a Masters mented for importing cars into the coun- to carrying it yourself, but, at this point, George Soros from 2006-2008. Taha funds, and thus more investments into degree in Industrial Engineering try. However, once it is, Ford's cars will it is still relatively rare. There is a poten- holds a B.A. in Biomedical Engineering IIG: What are the challenges of private the country. It is a virtuous cycle, and it all Management from Jordan University comply with international standards, tial, I believe, for significant growth in from Case Western Reserve University, equity investment in the Kurdistan starts with the government believing in, and a Bachelors degree in Mechanical regardless of regulation or local policy. this sector. Insurance is still a very young and an MBA from George Washington Region or Iraq more broadly (as com- and encouraging the private sector with Engineering from Sheffield University. This becomes problematic if demand industry here. A University. pared to stocks)? the right economic policies. A 66 — Kurdistan Review Invest in Group — 67 B BUSINESS

Financing Development Expanding Local Market Share

IIG: How would you describe BBAC’s IIG: How would you describe the land- IIG: How has North Bank’s strategy directly with us. Most of these banks goals in the Kurdistan Region? scape of private banking? Is there signif- evolved since 2004? target services to their home country CB: About ten years ago, our bank felt the icant room for further growth? NJ: Broadly, we have shifted from look- businesses and citizens that invest here. need to begin operating in the Kurdistan CB: The last three years witnessed an out- ing internationally for growth to seeking Moreover, their terms and conditions Region following the promulgation of standing development of the local banking domestic market share. In 2008, we made do not allow them access to the Iraqi the 2006 Investment Law, which grant- sector. Indeed, more foreign banks have this pivot towards focusing on the local markets that we have access to. As such, ed investors incentives, privileges , and entered Kurdistan as well, particularly market, which is a huge market. North many businesses and individuals in Iraq administrative and fiscal facilities. We from Lebanon. Five Lebanese banks are Bank has now been a premier bank in and the Region prefer to use local banks were also encouraged to enter the market currently operating in the Region, and five Iraq for several years. To the extent that we such as ourselves. Finally, given the size by what we perceived was a gap in bank- others are awaiting final licenses from the can operate internationally, we have very of the economy relative to the size and ing experience in the Region. Central Bank of Iraq to enter the market. good connections to neighboring coun- number of private banks in Iraq, we are We entered the market with the inten- It is noteworthy that all of these banks are tries, including Jordan, Lebanon, Saudi not afraid of increased competition– Chawki Badr — tion to help finance investments in all among the top banks in Lebanon, and all Nawzad Jaff — Arabia, the UAE, Bahrain, Kuwait, and there is room for everyone. Eventually Assistant General Manager, sectors, but specifically targeted housing, are members of Alpha Group, with depos- Chairman, North Bank Turkey. They have significant interests there will be increased competition in International Expansion, BBAC services and infrastructure. Since initi- its of at least $2 billion apiece. Despite in businesses in Iraq and the Kurdistan the banking sector as Iraq's economy ating our operations in Kurdistan, our the increased competition, we believe Nawzad Jaff provides exclusive Region. We work with their banks, and continues to take off, and the market will Chawki Badr provides IIG with bank has focused on offering all of the that opportunities are still numerous insight into the opportunities through them we are linked, to some become increasingly populated. Even exclusive insight into BBAC’s banking services offered in our branches and promising. There are many invest- present in the Region’s fast- degree, to the international markets. this is welcome, however, as the increas- decision to enter the Kurdistan in Lebanon, in line with local laws and ment projects still under preparation, the growing banking sector, as well ing number of international banks will Region, the bank’s strategy for regulations. We are able to deliver prod- Region’s infrastructure is in need of fur- as challenges faced by banks in IIG: Within the local market, how continue to open doors to broader mar- financing many of the Region’s ucts and services quickly and at high ther development, and the international the Kurdistan Region, including would you characterize your strategy? kets for North Bank and the Iraqi market major infrastructure and develop- quality. Thus, our bank has been very standard ratio of bank branch per capital international financial integration. NJ: We focus primarily on corporate in general. ment projects, and the significant well received by businesses and individ- has not been reached yet. The internation- banking, but we work in retail banking potential for further growth in the uals in Kurdistan. al standard is 10,000 inhabitants for each as well. For our corporate clients, we pro- IIG: North Bank is known for offer- Region’s banking sector. bank branch, while in Iraq the number is vide letters of guarantee for contractors, ing very high interest rates on depos- IIG: What opportunities do you see, 30,000 people per branch. Moreover, the bid bonds, loans, lines of credit, bridge its– around 6% APY on fixed deposits and how is BBAC capitalizing on them? ratio of cash credits granted by Iraqi banks loans and other short-term loans, as in savings accounts. Are these rates CB: Kurdistan is witnessing an unprece- to the GDP of Iraq does not exceed 8.5%, well as long-term loans. On the retail sustainable? dented economic boom, in line with our and the relative contribution of the bank- banking side, North Bank is the largest NJ: There is an old saying that “some- expectations we set upon coming here. ing sector to Iraq’s GDP is still very modest. creditor to the private market. We offer thing is better than nothing,” which we This economic growth is largely due All of these factors indicate that potential car loans and, to a smaller extent, con- employ in our business. Our goal is to to the policies adopted by the KRG to growth in this sector is still significant. struction loans and mortgages. This is grow in market share. Furthermore, encourage foreign and domestic invest- challenging, as there is not currently a interest rates in Iraq should be high; ment, as well as the Region’s remark- IIG: What demand have you seen from mortgage system in Iraq; we make our there is a lot of business to be done in able security situation. These factors corporate clients? own individual loans to people for such rebuilding the country and economy, so have produced important investment CB: Since we started our operations, most purposes. The demand in this area is huge there is high demand for financing. We opportunities. of our credits went to large institutions and far exceeds our capacity and abili- lend at 11%, and we pay our depositors Kurdistan’s recent Sectors such as construction, ser- and projects. This is due to the lack of ties. This allows us to choose the most 6%. The 5% gap is more than enough economic growth vices, and tourism have truly taken off basic legal requirements and assuranc- eligible clients. In this way, we have no to cover our operational expenses and as a result of these factors, and the con- es for retail credits, and the absence of problems regarding default with the loans provide us a profit. And of course, as has resulted in large struction of essential infrastructure in institutions to support the banking sec- we extend. interest rates drop, so will ours. We funding needs by the the Region is still in progress. Industry tor, such as insurance companies. The used to pay 9% and lend at 17%-18%, has also been booming in recent years. high number of major investment proj- About IIG: There are many foreign banks but as the country has developed, and companies involved. Kurdistan’s recent economic growth has ects, which almost outnumber small Nawzad Jaff has been Chairman of entering the market. How do you per- will continue to develop, interest rates North Bank since 2005. Originally resulted in large funding needs by the and medium size projects, encouraged ceive this increased competition? drop. If you look at our balance sheet, we BBAC has considerably trained as an engineer, Jaff has focused companies involved. BBAC has con- us even further to fund such projects. on business and finance since 1991. NJ: We very much welcome these banks. loan up to 80% of fixed deposits, and the contributed to many siderably contributed to many of the Currently, we are considering entering In addition to his leadership of North They open doors to international mar- rest we use for small private loans and of the Region’s major Region’s major projects, particularly by into an even larger funding operation Bank, he is involved in engineering, kets for us. Additionally, they typical- overdrafts. In this regard, the numbers granting documentary credits for their in partnership with a number of other construction, and real estate develop- ly have a different customer base than demonstrate that our interest rates are projects. financing. Lebanese banks. A ment in the Kurdistan Region. North Bank and tend not to compete well calibrated. A 68 — Kurdistan Review Invest in Group — 69 B BUSINESS

Retail Giant Bringing Global Standards IIG: What initial challenges did you face gap in those offerings. We have major IIG: How would you characterize the NP: We offer a broad range of services in Kurdistan? strength in our home offerings– carpets, potential of the banking industry in to our clients. Perhaps most in-demand BM: Finding suitable real estate has been decor, cutlery, etc.– that are not widely the Kurdistan Region and how does in the Kurdistan Region is our personal a challenge, and, as such, our strategies available here. Then, of course, our fash- İş Bank’s long-term vision fit into the debit card service, which is unique in have evolved with what works. When we ion lines cover the entire family, from future of the sector? the Region. Also in personal banking, first entered the market, we drove around babies and children to adults. NP: Overall, Iraq’s banking sector is still we will offer online banking to clients in the city to scout out potential real estate underdeveloped. Past and current per- the Region soon. Underpinning all of our options. As we started calling landlords, IIG: International retail is much newer ceived political instability has translated services is our efficient and high-quality we began to develop a broader network to Kurdistan. How does this affect your to the country’s banks being relatively customer service, which abides by world- of building owners and managers. Once operation and strategy? isolated from the international financial wide standards. For our commercial cli- we had a broad set of options, we studied BM: To establish ourselves initially, we system. As such, banks within Iraq and ents, we offer foreign trade transactions, traffic patterns to get an idea of demand came with two value brands to test the the Kurdistan Region tend to operate on cash and non-cash loan transactions, as Bhupesh Malhotra — for our businesses in each location. This market and broadly establish our pres- Nejdet Polat — a limited, local level, and capital accu- well as international financial trans- Country Manager, Landmark, Iraq was clearly a very challenging way of ence. This is still our main strategy. We Manager, Erbil Branch, İş Bank mulation in the country and Region has fer services, using our global financial going about selecting real estate, espe- want to be in all of the key locations in the been limited. However, this is changing network. Bhupesh Malhotra speaks to IIG cially with language barriers, no unified country where malls exist. In some cases, Nejdet Polat provides insight into with the entrance of foreign banks like regarding the opportunities and building standards, and no access to we would prefer to open independent- the Bank’s strategy in the Kurdistan ourselves, as well as the expansion of local IIG: How competitive is the banking challenges of pioneering foreign drawn up floor plans. Oftentimes there ly on a stand-alone basis, but that poses Region and Iraq, and discusses the banks in the Region. Capital is returning industry in the Kurdistan Region, and investment in the Kurdistan is no power or other utilities working its own set of challenges. Another key ways in which the Region’s banking to the Region, and financial infrastructure what kind of trends have you been wit- Region’s retail market. in the buildings. Title deeds are another to our operations is to employ local staff sector is becoming increasingly is being developed. İş Bank has major nessing in banking sector? challenge; it is unclear who actually owns whenever possible. This is really the only competitive. advantages in entering the Region, in NP: At this point, the sector is not very much of available property. This initially way that our business can operate. A final that we are based in Turkey and there- competitive—there is still plenty of room provided challenges for us. challenge for us is access to reliable data.. fore nearby. We understand the business for expansion and entrance of new banks. We are currently creating a database so practices in Iraq, the Kurdistan Region, That said, we are certainly witnessing a IIG: What is your timeline for reaching that, once we have a few years of data and the broader Middle East, and more- rapid increase in the number of banks full capacity in Kurdistan? behind us, we will have benchmarks with over, we bring expertise that will benefit coming to the Kurdistan Region. Given BM: The major factor with this setback which to base future targets. the Iraqi and Kurdish banking sector. We its quick economic development, we was delays in the malls. Malls did not acti- predict that conditions in Iraq and the are aware that the Region is garnering vate on the schedule we had drawn out. IIG: How do you foresee the evolution Region will continuously improve, and more and more interest from major Construction delays can range from six of the sector over the next 5-10 years? that growth will continue on track. As international banks, and we are aware months to 1.5 years. The primary factor BM: In the next 5-10 years, we will see such, we are excited to become one of that competition will increase. However, contributing to these delays is that owners major growth. Many brands are entering Iraq’s most vital financial institutions. more major international banks in the use their own personal money to finance the market very quickly. I don't think it Region will lift the banking standards in the malls' development, so if they have will even take five years. The country has IIG: What strengths does İş Bank bring the Region broadly—overall, the transi- personal liquidity problems, the whole to keep up with the entry of international to the local banking sector? tion to a more competitive and globalized development comes to a standstill. We business houses, particularly in regard to NP: As the Iraqi financial system is rela- banking sector is good for the economy believe formal financing is a challenge transportation, logistics, infrastructure, tively isolated, İş Bank is unique in that it as a whole. currently, and this causes significant and improving rules pertaining to visas is able to bring an international network delays. Our perception is that this scenar- and housing. Visa processing is arguably of services to multinational and domestic IIG: What are İş Bank’s goals in the io will improve, as several international the most important element right now businesses and individuals. İş Bank pro- Kurdistan Region for 2014 and beyond? banks have entered the market. if the country wants to activate foreign vides a broad range of services, drawing Does İş Bank have any plans for expan- investment and develop its own compe- on cutting edge financial technologies. sion in the Kurdistan Region? IIG: How would you characterize the tent workforce. Additionally, a free trade We are constantly innovating, as well as NP: In March of 2014 we opened a branch way that Kurdistan fits into Landmark’s zone and open skies policy would be more increasing the breadth of services we offer. in Baghdad, and we plan to open a branch portfolio? than enough to establish Kurdistan on About in Dohuk by the end of the year. Beyond BM: We are in the medium market seg- the map. However, this must all be done Is Bank is a premier Turkish financial institution. The bank offers commercial IIG: What specific services does İş Bank this expansion in capacity and reach, our About ment– we cater to the masses. Our prices quickly. The government must now react and personal financial services to offer to its clients? What demands have strategy is to increase the volume and effi- Bhupesh Malhotra has more than 20 are very competitive and offer the best to direct the market where the state wants corporate and individual clients, and you seen from corporate clients, and ciency of our services in international years of experience in diverse industries possible value with design in mind. This it to go. The risks and concerns are based has been present in the Kurdistan to what extent is İş Bank well suited to transactions and intermediation, for both and is currently based in Erbil directing strategy is well suited for the Kurdish on what is happening around us; business Region since 2011. meet those demands? our local and multinational clients. A the Landmark Group’s local presence. market, because there seems to be a large is moving forward as planned. A 70 — Kurdistan Review Invest in Group — 71 B BUSINESS

The Big Box Comes to Kurdistan

IIG: Do you see room for other retail IIG: How do you assess the transfor- giants in both the food and nonfood mation of the market since you started sectors here in Kurdistan? your operations here? JMB: For the food business, we believe JMB: There are two main challenges. The that the current players will be the players first is that we are in a country where 90% in the future. A new entrant can come at of what we sell is imported, so you need any time, but the market is not mature to set up your operation with distribu- for some types of brands. We are seeing tors and there can be importation issues. FOCUS: ECOCEM more and more middle market brands. The second is that this is a new market, so Being here and having opened our first we need to drive people into our hyper- Finding Synergy in Unlikely Places hypermarket, with other hypermarkets markets. We need to bring them the right in the pipeline, we are gaining market products at the right price. Other people Faruk Holding, in partnership with Lafarge, has found an innovative method of using Slemani’s waste to partially Jean Marie Boixel — share. Kurdistan is an emerging market in this business tend to sell some products fuel the city’s major cement plants—reducing industrial CO2 emissions, lowering operational expenses, cleaning Country Manager– Iraq, SI Retail and, in time, other brands will come. at a loss– with either no margin or a neg- up the city’s water and soil, and improving urban safety in the process. As part of Lafarge and Faruk Holding’s We are here. Carrefour is here. A lot ative margin– and compensate by selling interest in improving Slemani and assisting the Regional Government, the two parties are jointly initiating a Jean Marie Boixel predicts a of Turkish retailers are here and have other products. We want to try to sell all bright future for hypermarkets aggressive expansion plans. We are pos- the products in the store at a low price – comprehensive service to sort municipal solid waste in order to produce refuse-derived fuel (RDF) and reduce like Auchan in Kurdistan. itive on what we are doing with hyper- not just bakery items. We prefer to have landfill waste to less than 20% of its current volume. markets, and we believe that new brands ten clients spending $10 each rather than will come in the future. one client spending $100. lready well known for solving The RDF plant, operated by Ecocem/ Slemani municipality to consume 1,000 A problems through innovative Environmental Solutions Limited, a tons of garbage per day, increasing 3% Aand high-quality private sector company established by Faruk Holding annually. This represents over 40% of investment, Faruk Holding is pushing and Lafarge Industrial Ecology, will be Slemani’s total current waste production, Rapid Expansion the boundaries once again. The Slemani based in Tanjaro, just south of Slemani. and there is ample room for expansion. governorate produces hundreds of tons Municipal solid waste trucks will drop off In the first year, Ecocem plans to pro- IIG: Where would you place the IIG: What is your expansion strategy? of garbage daily. As Slemani grows, this roughly one thousand tons of waste per duce 130,000 tons of RDF, which will Kurdistan Region’s retail market in CD: Our target is to open ten hypermar- has begun to create environmental strains day to the plant. The waste is then sorted, cover roughly 25% of Lafarge/Faruk comparison to other markets in the kets in the next five years. We are very for the city. Landfills, scattered around and 3-5% of it, primarily scrap metal and Holding’s cement plants’ fuel needs. As region? positive on this region and we have put a the outskirts of the city, take up a massive plastic, is removed to be recycled. Water Faruk Holding and Lafarge push towards CD: When we studied some of the char- lot of effort into it. We have set up a head- amount of space. In some cases, such as comprises roughly half of the waste. To their goal of powering their plants entire- acteristics of the market in the Kurdistan quarters and a team of almost 50 people in Tanjaro to the south of the city, urban dry the waste sufficiently to be used in the ly from RDF, much more RDF will be Region, we saw that the penetration rate to run this operation. Now we have 200 expansion is nearing these dump sites, pre-calciner, Ecocem will employ bacteria produced and much more waste recycled. (the percentage of sales of food and non- people working for us in Kurdistan. Every which release gases that pollute the city’s in a process of bio-drying, which will heat This project seems to benefit every- food products made through the mod- time we open a hypermarket, we will add air and pose major fire hazards. In a city and dry the trash. Unusable trash will be one involved. By producing their own ern grocery format) was below 5%. If 150-250 people. We do not know exactly that depends on its aquifers for fresh water, separated and sent to a landfill, and the fuel rather than depending on oil suppli- you look at the United Arab Emirates, what the speed of expansion will be, but we the dump sites also pollute local ground- dried, shredded RDF will be trucked to ers, Faruk Holding and Lafarge not only for example, 60% of total sales are made are planning to have five hypermarkets in water. Surprisingly, though, Lafarge and the cement plants. All in all, only 12-20% improve the predictability and indepen- Christophe Durand — through hypermarkets or supermarkets. Erbil, three is Slemani, and two in Duhok. FH have found opportunity in this refuse. of the original trash delivered to Ecocem dence of their cement plants, but they Expansion and Business Development, In Saudi Arabia, it is 45%. In Turkey, Lafarge and Faruk Holding’s major will be returned to a landfill. The rest will also lower operational costs through SI Retail it is 20%. We believe that there is the IIG: How would you assess the invest- cement plants in Slemani– Bazian, Tasluja, go on to productive uses– even the mois- establishing a cheaper fuel supply. Much potential for a massive increase in hyper- ment environment in Kurdistan? and Gasin Cement Company– require ture removed will be purified for reuse. more important, however, is the impact Christophe Durand talks with market and supermarket sales in this CD: This is a very interesting market in tons of fuel for cement clinker production. Faruk Holding and Lafarge hope the project will have on Slemani’s envi- IIG about SI Retail’s expanding country. Even though every country is terms of investment. The investment laws The pre-calciner and kiln are operated to have the whole operation running ronment and society. Groundwater will operations in Kurdistan and the different, there is a trend towards the and the environment are very encour- at around 1,400 degrees Celsius. At this smoothly by the end of 2015 and have be cleaner, soil will be more productive for opportunities he sees in the retail development of hypermarkets every- aging in Kurdistan. Compared to other temperature, refuse-derived fuel (RDF)– aspirations to eventually run their plants agricultural purposes, the air will be fresh- real estate sector. where in the world. We believe that markets, it is easier to set up and start dried, shredded garbage, essentially– can primarily on RDF. As Slemani grows er, and the city will be more secure as land- what has been seen in the Middle East a business in Kurdistan. It is also very be used to efficiently fuel the chambers economically, industrially, and demo- fill fires diminish. While heavy industry in general in the last 10-15 years is very important for us that we are able to own and is burned so hot that carbon emissions graphically, its production of waste is and environmental improvement often close to what we see when we look at 100% of the business. We also appreciate are diminished. The process produces less predicted to grow in equal measure. A seem at odds with one another, Ecocem the Kurdistan Region. We believe that the support of the Board of Investment smoke and pollution than typical burning parallel expansion of RDF use is built demonstrates that synergies between the we have a very favorable environment to access land. We do not need a partner of trash, as well as less CO2 than the heavy into the Ecocem contract. Ecocem holds two can be found– to the benefit of com- for hypermarkets. like in other countries in the GCC. A oil that currently fuels the cement plants. a 20-year renewable contract with the munities as well as balance sheets. A 72 — Kurdistan Review Invest in Group — 73 ENERGY THE REVIEW Energy

SECTOR AT A GLANCE

Oil Reserves 45 Billion Barrels

Gas Reserves 165 TCF

Oil & Gas Investment $ 20 Billion PROPERTY MANAGEMENT Oil Production 400,000 bpd (2014) FACILITY MANAGEMENT 2 million bpd (2020) OPERATIONS MANAGEMENT Refineries bazian, Kalak Forging Ahead TRAINING While Kurdistan’s vast hydrocarbon reserves are powering economic growth, the Region is boosting its $7 Billion Power Generation role as a key energy provider to the world’s markets. 36N specialises in the management and Investment by 2016 he past year was a time of growth customers around the world. In addi- delivery of integrated facility services to for oil and gas production in the tion to a recently completed pipeline that clients throughout Iraq. TKurdistan Region. Kurdistan is allows the Kurdistan Region to export oil home to an estimated 45 billion barrels independently through Turkey, the KRG Annual Growth of oil reserves as well as 165 trillion cubic plans to build a second, 1 million-bdp-ca- 15% (Electricity) We manage assets and service contracts feet of gas resources. Oil production in pacity oil pipeline to transport heavy 85+15O the Region is expected to rise to a record crude from Kurdistan’s northern oil for the public and private sectors, across high of 500,000 bpd at the beginning of fields to international markets and raise a diverse range of portfolios. 2015 from a level of around 250,000 bpd oil production to 2 million bpd by 2020. 3,886 MW at the beginning of 2014. The KRG is also planning to commence Total Capacity The KRG’s Ministry of Natural gas exports to Turkey in 2016. The KRG's Power Gen. (2014) Resources (MNR) announced that the agreement with Turkey foresees an ini- Kurdistan Region has exported over 34.5 tial export of 4 billion cubic meters in Erbil Basra million barrels of oil between January- 2017, and envisions gas exports eventu- For inquiries December 2014. In total, around $3 ally climbing to 10 billion cubic meters [email protected] Naz City Road off 100 Meter Str. Office 3, Al Zahra Building billion-worth of oil has been sold to per year by 2020. Tel: +964 662 618 855 (next to Maxi Mall), Olympia Str. Tel: +964 662 618 855 Invest in Group — 75 E ENERGY Did you know? The Kurdistan Region has exported over 34.5 million barrels of oil in 2014. In total, around $3 billion-worth of oil has been sold to customers around the world.

Production Rebounds Refineries Over 30 companies An ISIS charge towards the borders of production there to 200,000 bpd by the bpd at the beginning of 2015. Over the In March 2014, Qaiwan Group began the Kurdistan Region at the beginning of end of 2014. Oryx’s operations at Demir summer, Canada’s WesternZagros for- a bidding process for the third phase of from 19 different August 2014 prompted the evacuation of Dagh had a capacity of 5,000 bpd in 2014, mally declared a commercial discovery expansion at its Bazian refining facilities countries are staff by major international energy firms with the company projecting capacity to with KRG authorities for the Kurdamir near Slemani. The company’s facilities in the area, yet production levels have rise to 40,000 bpd in 2015. Operations block it operates jointly with Talisman there make gasoline, diesel, and kerosene operating in the remained largely unaffected. Oil produc- continued at Gulf Keystone’s Shaikan Energy. WesternZagros estimates that for sale to domestic consumers, as well as tion during the height of the crisis at the field, although the company evacuat- the Kurdamir field holds around 1 bil- naphtha and fuel oil for industrial uses. Kurdistan Region beginning of August averaged around ed its staff and increased security at the lion barrels of contingent oil resources Qaiwan expects to finish construction by 360,000 bpd, down just 5,000 bpd from site. Gulf Keystone aims to increase oil and nearly 1.6 billion barrels of prospec- the end of 2017 and will increase refining levels before the ISIS offensive against production at its Shaikan operations to tive oil resources. WesternZagros also capacity from the current 34,000 bpd to Kurdish forces. Genel Energy exceeded 40,000 bpd and eventually reach pro- operates in the Garmian block, where 84,000 bpd, adding facilities for crude its 2014 production target of 200,000 duction levels of 100,000 bpd once a its Sarqala well is expected to produce distillation and naphtha hydro-treating. bpd. The company has interests in the field development plan has been agreed up to 10,000 bpd of oil through the sec- The company is also designing a 110-km Region’s two largest oilfields at Taq Taq for the site with the KRG. Currently, ond half of 2014. Pending KRG approv- pipeline to link its expanded refining and Tawke, with estimated gross proven production at Gulf Keystone’s Shaikan al of its field development plan for the operations to nearby oilfields. and probable reserves of 1.3 billion bar- operations is averaging around 23,000 Garmian block, WesternZagros aims to The Kurdistan Region is also home to rels. Both fields operated as usual despite bpd. Taqa, the state-owned oil explora- raise oil production at the site to 35,000 the Kar Group’s Kalak refinery near Erbil, the surge of ISIS forces in August, and tion company from Abu Dhabi, saw its bpd. Russia’s Gazprom Neft has begun which has a refining capacity of 100,000 the firm maintained combined produc- exploration operations at the Atrush site exploratory drilling at the Shakal block bpd. Kar Group plans to expand capacity tion levels of nearly 250,000 bpd as of disrupted by ISIS activities, but the group and commenced geological surveys at the to 200,000 bpd in the years ahead with November 2014. DNO has achieved maintains that the interruption of work Halabja block. The company is also set to the assistance of American engineering production levels of 130,000 bpd at its will not affect its plans to begin oil pro- become the main operator of a project in firm Ventech. Tawke operations and aims to increase duction at the site in the area of 30,000 the Garmian block in 2015. Natural Gas Companies & Blocks The Kurdistan Region possesses approx- 36% stake in the Bina Bawi gas field at a exploring supplying gas to the Kurdish imately 165 trillion cubic feet of gas cost of $150 million. This agreement gives market. The company recently joined with Addax Petroleum Exxon Mobil Hunt Oil Company OMV resources. At the end of 2013 the Turkish Genel sole ownership of the Bina Bawi DNO to enter into a groundbreaking Gas Taq Taq Al Qush, Bashiqa, Ain Sifni Bina Bawi, Sarta, Rovi government and the KRG signed the field, in addition to the Miran gas field it Sales and Purchase Agreement with the Pirmam, Betwata, Chemchemal, Kor Mor KRG-Turkey Gas Sales Agreement, also controls. Genel further announced KRG. Under the agreement, Genel and Afren Arbat East, Qara KAR Group which included plans for the construc- the conclusion of a combined production DNO have been supplying an average of Barda Rash, Ain Sifni Hanjeer Khurmala Petroceltic tion of a pipeline to export natural gas sharing agreement with the KRG for the 1.7 million cubic meters of natural gas per Chevron Gazprom Neft KNOC Dinarta, Shakrok from the Kurdistan Region to Turkey. The Bina Bawi and Miran fields that promis- day to the Duhok power station from the Qara Dagh, Sarta, Rovi Garmian, Shakal Bazian, Qush Tappa, Agreement foresees an initial export of es to bolster revenues and decrease risks Summail field they operate jointly near- Sangaw South, Hawler Repsol 4 billion cubic meters in 2017 and envi- associated with operations. The large gas by. Joint production for the companies’ Crescent Petr. Genel Energy Qala DZE, Piramagrun Khor Mor, Taq Taq, Tawke, Duhok, Marathon Oil sions gas exports eventually climbing to reserves at the two fields will likely be cru- Summail operations in the Duhok license Chemchemal Miran, Bina Bawi, Chia Harir, Safeen, Sarsang, Talisman Energy 10 billion cubic meters per year by 2020. cial to the KRG's efforts to meet export area averaged 2.35 million cubic meters Surkh, Ber Behr Atrush Topkhana, Kurdamir Turkey, which used nearly 40 billion cubic goals under the KRG-Turkey Gas Sales per day through the summer of 2014. Dana Gas meters of gas in 2013, is set to become one Agreement. The Bina Bawi and Miran Pearl Petroleum, a consortium formed Khor Mor, Gulf Keystone MOL Taqa Chemchemal Shaikan, Sheikh Adi, Akri-Bijeel, Shaikan, Atrush of Europe’s top three consumers of energy fields hold an estimated 238 billion cubic by Dana Gas and Crescent Petroleum, has Ber Behr, Akri-Bijeel Chemchemal, Kor Mor in the next decade, and the agreement meters of combined natural gas reserves seen combined production levels at its DNO Total holds out the option of increasing export and have the potential to export up to 20 Khor Mor and Chamchamal fields attain Tawke, Duhok, Erbil Hess Murphy Oil Safeen, Harir, Taza capacity to 20 billion cubic meters per billion cubic meters of gas to Turkey per an average of 9.5 million cubic meters Shakrok, Dinarta Central Duhok WesternZagros year in the future. year over the next two decades. per day and continues to deliver gas via HKN Energy Oryx Petroleum Garmian, Kurdamir Genel Energy announced in Genel is also in discussions with the pipeline to power stations in the Slemani Sarsang Hawler, Sindi Amedi November 2014 that it had purchased the KRG to arrive at a Gas Sales Offtake area, supplying nearly 4 million residents entirety of Austrian energy firm OMV's Agreement for its Miran field and has been of the Kurdistan Region with electricity.

76 — Kurdistan Review Invest in Group — 77 E ENERGY

Electricity Demand for electricity in the Kurdistan energy shortages that had previously includes sites at Baadre, Chamchamal, Distribution Region has increased from 925 mega- plagued the Region. The KRG earmarked Duhok, and Erbil. The KRG has indicat- While the private sector handles electric- watts in 2004 to nearly 4,000 megawatts $440 million in its 2013 budget for 112 ed its preference for gas-fired plants due While residents of the ity generation in the Kurdistan Region, in 2014. The KRG Ministry of Electricity projects with a combined value of near- to their efficiency, ease of construction, Kurdistan Region could the KRG controls electricity distribu- 8,000 MW predicts demand for electricity to grow ly $1.5 billion in support of its plans to and scalability. tion and monitors energy consumption Installed Capacity (2016) fifteen percent annually over the next expand the Region’s electricity generating Since 2003, the private sector has only make use of two among the regional populace. The KRG’s three years, noting that it has grown by capacity by another 3,000 megawatts. This invested around $5 billion in electrici- hours of electricity Ministry of Electricity provides techni- this amount for the previous three-year type of investment appears to be paying ty generation in Kurdistan. One major cal and logistical support to companies period. The KRG plans to fully meet off– the Region, which experienced fif- private player, Mass Group, operates per day in 2007, that generate the Region’s electricity, and $1 billion the demand for electricity in 1,000-megawatt gas pow- power supply has now producers underline the importance of Budget for ongoing projects Kurdistan by 2016 through The KRG plans to fully meet the er stations in Erbil, Slemani, the KRG’s efforts to provide security relating to the transmission sector the expansion of electricity and Duhok. Mass Group has reached an average both generally and for specific projects. generating capacity to 6,000 demand for electricity in Kurdistan enlisted Turkish construction of 23.5 hours per day. The KRG has already spent $1 billion megawatts, and officials look by 2016 through the expansion of firm Enka to increase capac- on electricity transmission projects and $7 billion to begin exporting electricity ity at its Erbil power plant, Generating capacity will actively seek out private investors in electricity generating capacity to Power generation investment to other areas of Iraq and oth- Kurdistan’s largest, to 1,500 has been expanded the future if public funds cannot meet by 2016 er countries once local needs 6,000 megawatts, and officials look megawatts by early 2015. To regional needs for electricity distribution. are fulfilled. The Kurdistan do so, it will convert the Erbil from 482 megawatts in At present, all of the Kurdistan Region’s Region already exports elec- to begin exporting electricity to other Gas Power Station from sim- 2007 to around 3,000 cities and districts, as well as most vil- tricity to the neighboring Iraqi areas of Iraq and other countries once ple-cycle to combined-cycle lages, are connected to a national power 15% provinces of Diala, Kirkuk, gas turbine technology. The megawatts today. supply network. Targeted Annual Growth Rate and Mosul. local needs are fulfilled. revamped plant will meet Electricity generating nearly 25% of the Kurdistan capacity in the Kurdistan Region has teen blackouts in just one month in 2009, Region’s energy needs. Similar conver- grown by leaps and bounds in recent has not experienced a power cut since sions began at the Slemani and Dohuk Since 2003, the private years. While residents of the Kurdistan March 2010. Gas Power Stations in 2013 and will soon sector has invested around Region could only make use of two hours The Kurdistan Region’s power gen- increase capacity at each plant to 1,500 of electricity per day in 2007, power sup- eration capacity is primarily managed megawatts as well. ply has now reached an average of 23.5 by the private sector, which provides In 2012, the KRG signed an agree- $5 billion hours per day. Generating capacity has the bulk of Kurdistan’s electricity gener- ment with Korean engineering in electricity generation in been expanded from 482 megawatts in ating infrastructure. The electric power firm Posco for the construction of a Kurdistan. 2007 to around 3,000 megawatts today, industry relies largely on gas-fired power 300-megawatt steam-powered electric- made possible by the KRG’s decision to stations that are supplied from fields at ity generating facility near Erbil, the involve the private sector in power pro- Khor Mor and Khurmala, among others. first government-controlled plant in the duction in a bid to overcome the chronic This network of local gas power stations Kurdistan Region.

Carduchi provides intelligence and insight on the Kurdistan Region/Iraq. Our weekly reports contains local media content, politics, political risk, 50MW Solar Projects analysis and media round of the week & economic development relevant to Renewables Scale industry and oil sector. The reports cover nuances of Kurdish politics which is otherwise not reported in English media. Installed capacity for renewable energy sources in the Kurdistan Region remains quite limited. KRG officials confirm that renewable energy plays a minor role in meeting the Kurdistan Region’s power needs at the moment, but they point to the important 15+85P Our consultancy services includes: Political Risks | Due Diligence | Stakeholder Planning | Market Entry Strategy | role alternative sources of energy play in their strategic energy outlook. The Region’s Investment | Procurement | Insight | Analysis two hydroelectric power plants at Darbandikhan and Dukan provide 300 megawatts of electricity at peak capacity, and the KRG is currently carrying out a feasibility study for wind power. Private sector solar projects have so far been limited to a relatively Carduchi Consulting small scale of around 50 megawatts. While the KRG does not believe that renewables london, erbil, slemani are practical for meeting the entirety of the Region’s energy needs, Kurdish leadership uk: +44 (0)7882933905 does emphasize a growing role for renewable energy in a holistic strategy to meet their +44 (0)2082400824 ambitious electricity generation goals. kurdistan: +964 (0)7708680986 A 78www.carduchi.com — Kurdistan Review Invest in Group — 79 E ENERGY Annual Growth in Max. Demand POWER PLANTS IN REVIEW 2004 – 2014 DEMAND The Kurdistan Region will have 8000MW 2000 of installed capacity in 2016. 1726 Erbil 3886 MW Power Plants – Total Installed Capacity (in operation) 1440 Slemani 1350 1441 Dohuk

6400MW 3000MW 3500MW 1076 Average produced power (2016) Capacity in Summer (est.) Capacity in Winter (est.) 1000 1096 918 1000 793 694 858 613 698 Existing Power Plants 546 610 559 410 538 362 421 455 HYDROPOWER STATIONS DIESEL POWER STATIONS 353 231 Dukan Power Station Installed Capacity 2014 Total: 4230 0 Designed Capacity: 400MW ERBIL 29MW YEAR 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Average Production: 150MW DUHOK 29MW SLEMANI 29MW ERBIL (SAQAR) 10MW Darbandikhan AKRA-DUHOK (SAQAR) 10MW Designed Capacity: 249MW KIFRI-SLEMANI (SAQAR) 10MW ONGOING POWER PLANT PROJECTS Average Production: 100MW CHWARTA-SLEMANI (SAQAR) 10MW SLEMANI (SAQAR) 15MW Power Plant Used Fuel Status KOYA-SLEMANI (SAQAR) 17.2MW GAS POWER PLANTS CHWARQURNA-SLEMANI 20MW ERbIL KAR GROUP Erbil (1500MW) and Slemani (1000MW) Gas Power Stations are (SAQAR) KHURMALA 1000MW Dual Fuel 4 Units Simple Cycle will be operational in September 2014 supplied by natural gas through pipelines from the Kormor gas CHAMCHAMAL-SLEMANI 24MW COMBINED CYCLE POWER (Diesel Oil & Natural Gas) 2 Units Combined Cycle will be operational in 2016 fields (170Km Pipeline to Erbil Power Station; 60Km to Slemani (SAQAR) STATION Power Station). 8 units in both Erbil and Slemani in operation.

SLEMANI Power Plant Implemented by Used Fuel Status Heavy Fuel Oil Number of Units: 30 x 1.7MW TASLUJA 51MW Completion Date: September 2014 PIRDAwD – ERbIL The Power Station consists of 8 units Simple Cycle (GE ERBIL 1500MW Mass Holding Frame9) and 2 units Combined Cycle. 8 units of Simple COMBINED Dual Fuel Cycle (8 X 125MW) in operation. 2 units Combined Cycle (Diesel Oil & Natural Gas) POSCO ENC CYCLE POWER Company (2X250MW) under construction. The first unit of combined ERbIL / KHAbAT STATION Thermal Number of Units: 2 x 150MW cycle (250MW) became operational in September 2014. ERBIL 300MW Completion Date: 2016

CHAMCHAMAL-SLEMANI SLEMANI 1500MW Mass Global Dual Fuel 8 Units (GE Frame9) in operation. SLEMANI QAIWAN GROUP COMBINED CYCLE Company (Diesel Oil & Natural Gas) 2 Units (Combined Cycle) under construction. BAZYAN 750MW Combined Cycle Contract has been signed between Ministry of Electricity and Qaiwan POWER STATION Group. Project commenced in 2014.

SUMEL – DOHUK The Power Station consists of 8 Units Simple Cycle (G.E. ERbIL KAR GROUP DUHOK 1500MW Mass Holding Dual Fuel Frame 9 – 125MW). All units (Simple Cycle) in operation. Heavy Fuel Oil Contract has been signed between Ministry of Electricity and KAR COMBINE CYCLE POWER HARIR 200MW Company (Diesel Oil & Natural Gas) 2 units Combined Cycle under construction Group. Project commenced in 2014. STATION

bAADRA – DOHUK 13 X 13.6MW POLTEX BAADRA 150MW DOHUK Natural Gas All Units in operation since September 2011. Contract has been signed between Ministry of Electricity and Poltex. INTERNAL COMBUSTION Implemented by Heavy Fuel Oil ZAKHO 800MW (Back up Diesel fuel) Project commenced in 2014. ENGINE Poltex

80 — Kurdistan Review Invest in Group — 81 E ENERGY

Source of Inspiration

IIG: Could you brief our readers regard- IIG: What kind of year was 2014 for the ing developments at the Qara Dagh, oil and gas industry here in Kurdistan? Sarta, and Rovi blocks in 2014? What DM: Overall 2014 has been a good year are your plans for 2015? for the Kurdistan Region’s oil and gas DM: Chevron’s drilling program in Rovi industry with a substantial increase in and Sarta blocks has made good progress. activities. More companies were drill- Chevron has also acquired 2D seismic ing, acquiring seismic data and working data for Rovi/ Sarta. towards meeting their PSC commit- Drill Stem Tests (DSTs) were start- ments, and declaring commerciality. ed in both Rovi and Sarta in June 2014. The recent deal between Erbil and The DSTs would enable Chevron to Baghdad is a very encouraging develop- gain a better understanding of the hydrocarbon potential Donnie MacDonald — and to make Declaration of Chevron is pleased that President & Country Manager Commerciality decisions. in the last 12 months Chevron Iraq We have partially completed flow testing both wells and it has contributed a total of IIG talks to Donnie MacDonald are encouraged by the initial $1.9 million towards sup- about recent developments at tests. Chevron plans to con- Chevron's Qara Dagh, Sarta, and tinue the DSTs at Rovi and porting Kurdistan Oil and Rovi blocks, and the trends in Sarta when it resumes opera- Gas Humanitarian Initiatives Kurdistan's oil and gas industry. tions. In Qara Dagh, Chevron plans to proceed with the 2D (KOGHI) in response to the seismic data acquisition pro- huge influx of refugees and gram when it resumes opera- tions in the Kurdistan Region. internally displaced persons development, so the target production entered Kurdistan around 2006 and took Chevron is pleased that in (IDPs) who have taken refuge mentioned by Minister Hawrami is pos- risks – geopolitical and geological. They the last 12 months it has con- in the Kurdistan Region. sible. A lot of joint effort will be required discovered oil and put Kurdistan on the tributed a total of $1.9 million from the industry and the government global exploration map. As the industry Our vision is to build towards supporting Kurdistan to achieve the projected production. in the Region matures, we will witness Oil and Gas Humanitarian Initiatives ment that demonstrates the willingness of Undoubtedly, the Kurdistan Region has consolidation and more experienced a legacy position (KOGHI) in response to the huge influx both sides to work out a resolution on the the potential to emerge as a leading con- companies operating in the Region. It for Chevron here in of refugees and internally displaced per- hydrocarbon and revenue sharing laws. tributor to global oil supplies by the end demonstrates confidence in the contract sons (IDPs) who have taken refuge in the of this decade. terms and business environment. Kurdistan. While we Kurdistan Region. Chevron contributions IIG: The MNR set an export goal of Our vision is to build a legacy position are still in the early have funded Save the Children (STC) and 2 million bpd for Kurdistan by 2019. for Chevron here in Kurdistan. While we IIG: What potential is there for phase of our growth, About International Rescue Committee (IRC) Do you think that is achievable? How are still in the early phase of our growth, Kurdistan to become a significant play- Donnie MacDonald worked with Texaco programs. would you define Chevron’s role in this it is for anyone to see that the Kurdistan er in the regional energy industry? it is for anyone to see from 1980 until its merger with Chevron In 2013, Chevron built six computer strategy? Region has all it takes to become a major DM: The KRG considers the hydro- in 2002. He was educated in the UK that the Kurdistan labs and two football fields in the com- DM: The Kurdistan Region is still rela- player in the global energy market. carbon sector a priority, and the MNR, and has worked on projects around the Region has all it takes world, including in Nigeria, Brazil, and munities it operates in. Our 2015 social tively under-explored and we believe the under the guidance of Minister Hawrami, the UK. Prior to his current position investment plans have a diverse range Region has potential to become a promi- IIG: Which trends do you see affecting is being proactive in putting the required to become a major in the Kurdistan Region, MacDonald of projects focused on Chevron themes nent player in the oil industry. There are energy companies here in the medium legislation, processes, and procedures in player in the global was in charge of Chevron’s business of health, education, and economic more than 40 operators working in the term? place to ensure the success of the oil and development in the Middle East. development. Kurdistan Region at various stages of DM: Entrepreneurs and small companies gas industry in Kurdistan. A energy market. 82 — Kurdistan Review Invest in Group — 83 E ENERGY

First Mover

IIG: What has Qaiwan's strategy been to capacity at the refinery to 90,000 bpd. achieve such impressive growth? The plan includes an expansion of all of SH: Qaiwan's strategy is to always be a the units at the refinery, including devel- first mover. We have demonstrated this opment of a new gasoline processing in several sectors. We are the largest inter- facility. Our gasoline production facilities national oil trading company from the will include continuous catalyst reform- Region, our Bazian oil refinery is one of er (CCR) technology. This technology only two in the Region and is continuing is the first of its kind in the Kurdistan to expand, and our development projects Region, and it will make our gasoline are unparalleled in Slemani and the wider unit the largest in Kurdistan. Total cap- Kurdistan Region. However, being a first ital expenditure on this expansion will mover means taking on increased risk. be over $1 billion. Saad Hasan — Risk and reward are inherently bound CEO, Qaiwan Group together, and, fortunately, we have been IIG: Qaiwan Group is also building a successful in our management of risk. gas power plant at Bazian. Could you Saad Hasan provides IIG with As a result, Qaiwan Group has grown brief our readers about this project? exclusive insight into the Qaiwan very quickly in 2012 and 2013, posting SH: We have been awarded a contract to Group’s strategy, as well as its latest over 100% year-on-year growth for both build a 750MW power plant. We have projects and developments. years. 2014 will, unfortunately, present signed the contract, and we are at the end increasing challenges. The economic stages of our preparations for the plant. environment in the Region is more chal- We are currently partnering with an orig- lenging than in previous years, as political inal equipment manufacturer, and have tensions in the Region and the broader opened tenders for EPC contracts. The Middle East are directly and indirectly site preparation is in progress, and we are affecting the business and economic land- targeting the completion of Phase One of scape. However, we are targeting similar the power plant by the second quarter of growth numbers to those that we have 2015. Phase One will establish the plant posted in previous years. Qaiwan Group as single cycle. Once completed, the pow- always targets operations at the highest er plant will be upgraded to a combined level possible, and we are in a position cycle plant, which increases the capacity to overcome the challenges that 2014 is and efficiency of electricity generation. presenting. Phase Two, which will make the plant we became able to effectively and easily which provides them insufficient support. We are the largest in- combined cycle, will be completed in reach our end users in our lines of busi- The major, global investment banks have IIG: Qaiwan Group’s expansion of its 2016. The total capital expenditure of ness. Through this, global companies historically had a limited presence in the ternational oil trading Bazian refinery is one of its largest cur- this project will be $600 million. have recognized that we deliver results Region. Fortunately this is beginning to company from the rent projects. Can you tell us about this faster than others. When you are a reli- change, with some major internation- expansion? IIG: How has Qaiwan Group been so able performer and committed to your al banks openings branches here. Still, Kurdistan Region, our SH: The third phase of the Bazian refin- successful in attracting foreign partners project, it is easy to find good partners. many are not active in a way that satisfies Bazian oil refinery is ery expansion began near the end of for joint ventures? the major need in the Region for project 2011. We started by developing the SH: Qaiwan Group is now beyond the IIG: Qaiwan Group clearly has many finance. Improved financing will be one one of only two in the Qaiwan Group concept and the front-end engineer- level of just being a local company. In the high-capital projects. How does Qaiwan of the key needs for Qaiwan in the future, Region and is continu- Qaiwan Group is a major, international ing design (FEED), in partnership with late 2000s, Qaiwan initiated a strategy of finance its projects? to continue to expand and continue our group of companies based in Slemani Technip, a French engineering firm. We spreading around the world and open- SH: Thus far, Qaiwan Group has self-fi- development. There has been limited ing to expand, and our and Dubai with a portfolio including oil have recently invited bids for engineer- ing several global offices. This strategy nanced all of its projects. Banking and talk of listing publicly on the Iraq Stock refining, energy trading, power gen- development projects eration, real estate construction and ing, procurement, and construction included connecting with many major access to finance in the Kurdistan Region Exchange or Erbil Stock Exchange to development, and hospitality. Qaiwan (EPC) to carry out the remainder of the players. Ultimately you must commit; is one of the biggest challenges to busi- finance our growth. However, these plans are unparalleled in is among the most active, influential, project. This expansion will add 50,000 you must perform at the best interna- nesses here. Banks do not have a sover- are probably a long way off. For the imme- Slemani and the wider and fast-growing companies in the barrels per day (bpd) of crude distilla- tional standards to be recognized world- eign guarantee in the Region and must diate future and for our current projects, Kurdistan Region. tion capacity, which will increase total wide. Through this expansion strategy, work through the Central Bank of Iraq, we will likely continue to self-finance. A Kurdistan Region. 84 — Kurdistan Review Invest in Group — 85 E ENERGY

Global Ambitions

IIG: What are MOL Group’s objectives, and renovation of schools and commu- and what is your strategy to achieve nity halls, as well as by purchasing items them? such as school buses, generators, and AD: Having done the groundwork in school supplies in partnership with the 2013, MOL Group is ready to increase local communities and in line with our production significantly and to become sponsorship and donation policies, such a sizeable international upstream player. as drilling water wells. On the other hand, Our goal is to achieve a real change. Our the on-going training program of eight key focus areas are the Kurdistan Region MNR employees at two Hungarian uni- of Iraq (KRI), Pakistan, the North Sea, versities is of national relevance, as is the and CIS. We expect to book significant training of 13 Kurdish diplomats last year reserves from Kurdistan, Kazakhstan, and in Budapest. Alexander Dodds — our new North Sea assets. Although we E&P Executive Vice President, will be on a growing trend by the end of IIG: What does R&D mean for MOL MOL Group 2014 organically, we also aim to be active Group? inorganically. We have a very strong bal- AD: Successful companies are always Alexander Dodds discusses ance sheet, so M&A will definitely play innovating, always committed to finding the ways in which the a significant role in our efforts to reach ways to gain the competitive edge. This is Kurdistan Region adds value the critical mass required to become one true for MOL Group as well; research and to MOL Group’s portfolio and of the best upstream companies. We will development is one of our strategically discusses MOL Group’s strategy carefully evaluate all upcoming oppor- important activities while we invest in the going forward for increasing tunities and focus on value creation, not future of our operations. We are facing production, creating value, and just volume growth. new technical challenges during our daily investing in the communities in operations and managing these challeng- which it operates. IIG: What are your activities in the es can be successful if we deliver applied Security in the Kurdistan Region is rela- operates six production units with more Kurdistan Region in terms of sustain- and effective R&D ideas. Monitoring of tively good and incidents in the Region than 1700 service stations in 11 Central able development? new international development results is remain sporadic, isolated, and much less and Eastern European countries, all sup- AD: At MOL Group the concept of part of our operation in order to imple- frequent than elsewhere. Although there ported by a far-reaching logistics system Our good relationship About sustainable development and its robust ment the best available technologies at are manageable marketing and securi- and driven by supply chain manage- with the KRG covers Alexander Dodds has over 30 years framework covers six areas of focus, MOL Group. MOL Group as an operator ty challenges, on the whole the region is ment. Our aim is to increase profitability of experience in the international including climate change, communities, can best benefit our partners if successful full of opportunities and the future looks through improved efficiency, more flexi- not only cooperation upstream oil and gas arena, with and human capital resources. Strategic R&D project results are implemented, very promising. MOL Group is pleased ble operations, and continuous evaluation in the oil and gas broad experience in exploration, objectives have been defined in all six where it is possible. to be part of the developing story of the of new business and investment opportu- development, and production, and has areas, and our ambition is to be in the Kurdistan Region and is committed to nities. As MOL Group Upstream has suc- industry, but also the worked in North and South America, top 20% of the industry in sustainabili- IIG: Within MOL’s portfolio, where facing and resolving challenges. cessful exploration activities in Kurdistan, development of local the North Sea, the Middle East, Asia, ty performance. Our good relationship would you place your Kurdish blocks the Downstream division is also going to and Russia. His recent assignments with the KRG covers not only coopera- in terms of risk, expectations, and IIG: MOL Group has extensive down- evaluate market conditions by preparing communities and local include being Executive Director and tion in the oil and gas industry, but also opportunities? stream expertise, largely through their detailed market analysis and investigating Executive Vice President at TNK-BP content. and President & General Manager at the development of local communities AD: In general, the KRI’s business envi- projects in Europe. How would you potential investment opportunities in the ExxonMobil Qatar Inc. Dodds holds a and local content. In the KRI we mostly ronment, thanks to vast hydrocarbon assess the market for downstream Region in our next strategy planning pro- BSc in Civil Engineering and a Master’s focus on local stakeholders in the Akri- potential and the entrance of companies investment in Kurdistan? cess phase, which will be finalized later degree in Petroleum Engineering. Bijeel area by supporting the construction new to the Region, is relatively positive. AD: MOL Group’s Downstream division this year. A 86 — Kurdistan Review Invest in Group — 87 E ENERGY

Energizing Kurdistan

Focus: 36N IIG: Could you offer us an assessment BK: Our refinery is vital for the economy of the company’s main achievements of Kurdistan. When Beiji Refinery was Bringing the Best International Practices to Kurdistan in 2014? attacked by the enemy this year, we saw BK: 2014 was an exciting year for us. We Kurdistan affected by lack of fuel deliv- s Kurdistan’s economy has grown Kurdistan Region with an experience To do so, 36N and other facilities man- continued to grow our upstream busi- eries. We must be self-sufficient, and the and developed in recent years, that mirrors the standards of quality and agement companies with a focus on ness. In May, we signed a production goal of the KRG is to be self-sufficient. So Ainternational firms have increas- customer service they could expect to international standards will have to sharing agreement with the Nineveh we continue to grow our refinery to meet ingly faced the dilemma of choosing encounter in their home markets. “We are prove to the Kurdish market that the Governorate to explore and produce the demand. We are currently at 100,000 how to administer the offices and facili- very mindful of transferring those same value of the services they provide is oil and gas in the Mahkmour area. We bpd. A 20,000 bpd condensate plant will ties they occupy. Companies new to the types of global best practices and know- defined as much by quality as it is by are excited to rapidly implement this in be commissioned in 2015. We will add Kurdistan Region are often either forced how and expertise here to Kurdistan,” price. That argument is often challenged 2015 with three well work-overs and a another 60,000 bpd of refining capacity to juggle facilities management services Colin Gaskin, 36N's Executive Director, in Kurdistan’s still maturing economy, seismic program. We assisted the MNR in the next 24 months. Kurdistan became themselves alongside their main corpo- explains. To do so, 36N employs skilled and the costs associated with the com- Baz Karim — in bringing important fields back online self-sufficient in jet fuel this year. That was rate interests or turn to an array of local expatriate staff that try to convey their pany’s aspiration to meet global stan- President & CEO, KAR Group after ISIS caused problems in northern an exciting step. contractors that may or may not achieve experience and insights to local work- dards in its industry can sometimes Iraq. In our midstream business, we sus- the quality standards they are accustomed ers. The company also conforms to the place it at a competitive disadvantage. IIG talks to Baz Karim about KAR's tained pipeline flows to meet the MNR IIG: Could you brief our readers on the to in the rest of the world. Now, firms international standards set out by many of “I will not shy away from saying that it Erbil Refinery and the Group's goal of 400,000 bpd of exports by the end progress of KAR's power generation specializing in the provision of facilities the world’s leading facilities management is sometimes difficult,” says Al-Jebouri, ambitious future plans in the of 2014. We linked the Bai Hasan and and distribution project? management services are increasingly associations, including the International “because we are sometimes seen as not Kurdistan Region. Avana fields to Kurdistan’s pipeline net- BK: We commissioned our power plant stepping into the Kurdish market and Facility Management Association being entirely competitive with the mar- work. In 2015, we will rapidly expand the and the 400 KV substation in 2014. We trying to win over corporate clients with (IFMA) and the International Sanitary ket, but that is mainly due to the fact that system with new field tie-ins, pump sta- have not been fully operational due to international credentials and promised Supply Association (ISSA). we are here to implement processes, pro- tions, and the addition of a 36-inch line fuel supply, but I am happy that the gas cost and time savings. cedures, and standards that haven’t been between Khurmala and the Zab River. In sweetening plant at Khurmala is currently 36N, established in 2012, is a leading put in place in Kurdistan as of yet.” For the downstream business, we commis- in commissioning and should provide facilities management firm that has seen Al-Jebouri, the advantage of the low ser- sioned our 640-MW power plant, and gas to our power plant before the end its portfolio of clients in the oil and gas vice charges offered by some competitors we made great progress on a 60,000-bpd of 2014. In May, we signed an export and real estate sectors expand with the We are here to can be illusory and often translates into refinery for Nineveh. We hope to finish credit facility with German Hermes and overall growth of the Kurdish economy. implement processes, lower quality service that can quickly the Nineveh Refinery in Q4 2015. This Commerzbank to purchase an additional The company aims to create value for lead to spiraling repair costs, miscom- will bring important fuels to the area two turbines. So when we add these and its clients in Kurdistan by removing the procedures, and munication, and decreased asset values. once it is stabilized. our combined cycle phase, we will be a need for them to divert crucial financial standards that haven’t “Facilities management is one of those 1.2-GW power plant. and human resources from their core sectors where it is sometimes difficult to IIG: What sort of production do you see businesses towards property manage- been put in place in understand the value of these services if the Khurmala field potentially having? IIG: The KRG has ambitious plans to ment and the responsibilities associated Kurdistan as of yet. you haven’t been exposed to them until BK: We currently produce 105,000 bpd become an energy provider to Western with it. 36N offers its customers a range something happens. Then you under- from Khurmala. We started installation markets in the long term. How would of round-the-clock services in areas stand,” he argues. of a new 100,000 bpd processing facility. you describe the future of Kurdistan as including cleaning, engineering, general The firm has set its sights on manag- Rapprochement between Baghdad This will be online by mid-2015. We are an energy provider to Western markets, maintenance, catering, and health and ing assets for Kurdistan’s medical sector and Erbil on budget and oil issues is a piloting a water injection project now that and the KAR Group’s contribution to safety training. Contrasting the services and the regional government, though promising sign for continued growth will allow us to sustain 175,000 plus bar- the realization of this target? provided by his company with the com- the goal to diversify 36N’s client base was in the energy and real estate sectors rels of oil production for many years. We BK: We like targets, and thus far we have plications associated with firms manag- temporarily set back this year by budget that underpin the facilities manage- have started to explore deeper horizons been able to meet them. The pipeline sys- ing their own facilities, managing partner disputes between Erbil and Baghdad. ment industry in Kurdistan. In the of the subsurface at Khurmala, and we tem must be expanded rapidly to meet Mario Al-Jebouri contends, “It is much Now, with a durable settlement between industry’s quest for new clients and a have found additional oil and gas plays. these goals, and we are working hard to easier for a company like us, because we the two sides in place that has seen the greater market presence, though, the About We are evaluating that data and expect do so. The pipeline continues to deliver Baz Karim is the founder of KAR have a magnitude of clients, to have econ- restoration of the Kurdistan Region’s continuing process of educating com- to produce gas and condensate from the crude to international markets via the Group. As one of the leading oil and omies of scale and efficiency that no other budget, the company's leadership is panies operating in Kurdistan about gas industry figures in the Kurdistan Upper Qamchuqa in the near term. port in Ceyhan, and we do not have company, no matter how large or small, optimistic that it will be able to secure the merits of an internationally mind- Region, he follows the guiding principle disruptions due to the lack of a market. can achieve on its own.” government business as well as clients in ed, holistic approach to facilities man- of establishing a stable model of Iraqi IIG: How would you assess the role of These are all positive things. I feel strongly 36N aims to present internation- other sectors that complement its current agement will likely prove crucial in the employment for both operations and KAR’s Erbil Refinery in Kurdistan’s that infrastructure and crude availability al companies setting up shop in the strength within the oil and gas industry. coming year. A investment activities. energy market? for export will be on target. A 88 — Kurdistan Review Invest in Group — 89 E ENERGY

Securing Industry Shifting to Production

IIG: What are some of the major ele- training, we believe that this can be IIG: How have the company’s activi- ments that your companies focus on in addressed. Essentially, Stirling Group is ties developed since your entry into the particular in Kurdistan? very much focused on developing train- Kurdish market? BO: Overall, one of the key sectors that ing courses, training personnel, and MA: MOL Group’s presence in the The combination we focus on in Kurdistan is oil and gas. enabling the IOCs to have the right lev- Kurdistan Region dates back to of sizeable onshore We believe that technology and safety el of health, safety, and environmental November 2007, when MOL was award- solutions can help to make the Region a record, as well as the right level of human ed two exploration licenses. Due to a resource potential, safer and more secure place. We want to resources to be able to operate efficiently. relatively early entry into the Kurdistan relatively favorable allow the international oil and gas compa- As international companies arrive, they Region of Iraq, MOL Group established nies (IOCs) to forget about external secu- bring high standards for health and safety, a strong position and had an excellent economic terms and rity challenges and focus instead on their which have not been previously present in relationship with local communities low geological risk core business of drilling and production. Kurdistan. Fire codes, for example must and the government. As we have three Botan Osman — Another focus of both companies is to be followed. Through fire response train- Majdi Ahmad — significant discoveries in both blocks, makes the Kurdistan Country Director, create a Kurdish cadre in our businesses ing and top quality equipment, we are Managing Director, Kalegran our primary aim is currently to devel- Region a highly Restrata & Stirling Group and the localization of the Region’s health introducing a new level of quality to the op and commercialize the discoveries. and safety industry. health, safety, and environment area, and Majdi Ahmad provides IIG with Our focus has shifted from exploration attractive investment Botan Osman offers insight into we are receiving positive feedback both exclusive insight into Kalegran’s activity to field development and early proposition, which how the Region’s Health, Safety, IIG: What specific challenges does from industry and the MNR. We are ambitious development of the production. Security, Environment (HSSE), and Restrata face in Kurdistan? opening a new training center this year, Akri-Bijeel Block and shares his has been recognized security technology landscape BO: For Restrata, the challenges here which we will use to bring best practices optimism regarding the future IIG: Can you update us on the status by more and more are changing and developing, and are related to security. Vigilance is what in health and safety training to Kurdistan of the Kurdistan Region as of the Akri-Bijeel Block? When is the predicts significant future growth makes Kurdistan's security so strong, for the first time. an investment destination for Field Development Plan expected to international E&P and opportunity in the sector. and oil companies insist on being vig- international oil companies. be completed, and when will the field companies. ilant here, as they do everywhere else. IIG: How do you see the market for begin to produce commercially? We bring in equipment as well as exper- HSSE developing as the energy indus- MA: We can proudly report that produc- tise that have not previously been easily try in Iraq matures? tion has started from the Bijell field using available in Kurdistan, to facilitate vig- BO: We see the growth of the security the existing surface facility at the Bijell-1 ilant security. Additionally, we work to technology area as exponential. When site. The liquid handling capacity of the make processes as unobtrusive as pos- exploring for oil, there are limited needed EWT facility is 10,000 bopd, which is the IIG: How would you assess the sible. IOCs cannot face downtime, and inputs for security, but once production production target by the end of 2014. Kurdistan Region’s role as an energy cannot lose focus on their businesses. begins, there is more and more that must The ongoing work program contains hub in the medium term? We offer several unique technologies, but be protected, and once commerciality is the drilling of the Bijell-2, Bijell-4, and MA: From the geological point of view, the key is integrating them so that we are declared, companies know that they are Bijell-6 wells. All of them will be tied the Kurdistan Region is one of the most not focusing too little or too much on any staying. Right now there are a limited into the mentioned facility. The Field attractive regions in the world. The one problem. Once integrated, design number of companies that are produc- Development Plan is under preparation, Region has enjoyed significant explora- and training that allows the company ing, but this is increasing every year. As and the submission date was April 30th, tion success since 2004. The combination to employ the systems most easily is a this progresses, the more production that 2014. Our plan is very ambitious; we are of sizeable onshore resource potential, challenge as well, and requires very close happens, the more demand there will be going to conduct a 4-rig campaign from relatively favorable economic terms, and work with the client. To accomplish this, for security services and technology, now on until reaching the production low geological risk makes the Kurdistan we must understand the security prob- as well as HSE training and solutions. plateau. Region a highly attractive investment lems that they face before we can address Additionally, we see growth in non-oil proposition, which has been recognized them. Just going to a site and installing sectors such as hotels. We have done secu- About IIG: How does the company help devel- by more and more international E&P cameras is not useful if it is done without rity consulting for the most prestigious Majdi Ahmad has been working for op local staff? companies. Now the Region has reached About the understanding of the overall security hotels in the UAE, and we can replicate Kalegran since August 2010, first serving MA: Kalegran strongly believes in a more developed stage, where the key Botan Osman is the Country Director environment and challenges. that here. In the construction sector, new as Deputy Managing Director before investing in human capital. The com- challenge is to commercialize and mone- for Restrata and Stirling Group developments in Kurdistan do not always becoming Managing Director and pany provides on the job training for tize the exploration success of the Region. Kurdistan and Northern Iraq. Botan Country Chairman for the Kurdistan IIG: What has been Stirling Group's currently follow international health and fresh graduates by hiring them under Several field development programs have joined Restrata and Stirling Group from Region. Prior to his tenure with Kalegran, the KRG, where he served as the Head main focus here? safety standards. However, we believe that he held several technical and managerial the umbrella of the Growww Program, been started recently or will start soon, of the KRG Department of IT and IT BO: On the Stirling Group side, one this is changing rapidly with the entrance positions at MOL Pakistan Oil and Gas MOL Group’s unique recruitment and and the construction of a new pipeline to Advisor to the Prime Minister. He holds of the challenges that we are seeing is of global developers, such as Emaar, to the Company for 8 years. He received an development program. Moreover, the Turkey from the Kurdistan Region is also a BSc in Software Engineering from the localization of the oil and gas sec- market. As HSE compliance increases, so MSc in Petroleum Engineering from company provides local, international, a catalyst and a key step towards develop- Manchester University. tor. Through competency matrices and will demand for our services. A Miskolc University in Hungary. and in-house training to its employees. ing the Region’s oil industry. A 90 — Kurdistan Review Invest in Group — 91 E ENERGY

Changing Dynamics

IIG: How robust is Kurdistan's energy PSC, oil firms are paid a percentage of the industry? oil revenues as cost recovery and profit. ANALYSIS— BW: The building blocks for a robust Kurdish energy industry are in place: IIG: How could Kurdistan benefit of its Production & Monetization increasing production, oil-thirsty mar- gas resources? kets, a cooperative transit state (Turkey), BW: Gas can be instrumental to eco- From the accomplishments and challenges of 2014 and investment in export infrastructure. nomic diversification. The KRG has an to the upward trajectory of 2015, Kurdistan remains a The development of the KRG’s energy estimated 165 tcf of natural gas, most of industry has gone through phases. The which is associated with oil. Once devel- choice destination for energy sector investors. KRG started small with the so-called oped, the KRG can export gas, especial- “wildcatters.” The gains were solidified ly to Turkey, which sees gas as the real with the KRG's legal framework for prize for its cooperation with the KRG. Bilal Wahab — exploiting natural resources, including Less like oil, natural gas can have stronger Assistant Professor, American University the adoption of industry-favorite PSCs. In ripple effects in the economy by offering Brad Camp — of Iraq, Sulaimani (AUIS) turn, better-established companies have local industry a comparative advantage Energy Analyst been attracted to Kurdistan’s energy sec- for lower cost manufacturing and agricul- Bilal Wahab provides his exclusive tor. Following the mass of companies and ture. If exploited well, the KRG could also wo words will dominate the were completely destroyed by the enemy vastly improving security situation and the analysis of the changing dynamics blocks that have been awarded, the KRG export electricity. In terms of the envi- Kurdistan history books for leaving stranded oil and missed revenue emergence of better geo-political relations in Kurdistan’s energy sector and is eying the last phase: consolidation of ronment, gas is cleaner. However, unlike T2014: ISIS and oil exports. While opportunities. As pragmatism set in, and 2015 indeed looks like another ban- regional geopolitics, arguing for the industry through mergers and acqui- oil, gas has not received due attention. ISIS spread its truly abhorrent ver- the newly constructed and operational ner year for the Kurdistan energy sector. more responsible management sitions by larger oil firms. Monetization Iraq currently flares about half of its gas sion of governance, the oil industry in Kurdistan pipeline network shined as a Gas is slated to be an important issue of the KRG’s energy sector and of oil is crucial for the success of this last production due to lack of capturing tech- Kurdistan emerged from the exploration beacon of possibility both for oil exports for 2015. The KRG will embark on a hydrocarbon revenues. phase, since, according to the terms of the nology– an obvious opportunity lost. and discovery phase to production and and political compromise. Many deemed major gas development program that will A monetization. Although many deemed the pipeline construction as an obstacle to see increased gas availability for domes- the KRG goal of one million barrels relations and asserted that it heightening tic power generation and industry as per day in 2015 as overly aspirational, tensions between Erbil and Baghdad, but well as gas production for export for the Transparency in Energy Sector works on the ground continued to prove events are showing that the pipeline sys- Turkish market. A new gas regime has otherwise. Oil companies endured the tem is a linkage and an opportunity. The been established offering new investment n another step forward for transpar- and projects. The largest recipient of these ambition of a nasty enemy and quickly Kurds have committed 300,000 barrels per opportunities with measurable returns for IN NUMBERS ency in the Kurdistan’s energy sector payments in 2013 was the Ministry of accelerated production of petroleum in day of pipeline space to move stranded investors. Billions in new foreign invest- Iand finances, the KRG Ministry of Finance, which received nearly $1.4 bil- 2014. At the end of 2014, production in oil from greater northern Iraq to interna- ment is needed to exploit the gas oppor- $9.7 billion Natural Resources (MNR) released its lion– $1.1 billion of which went to reim- the Kurdistan Region stood at approxi- tional markets. With declining oil prices, tunities, and this will greatly boost the MNR Revenue (2007-2013) comprehensive Annual Report in April burse the costs of fuel provided by the mately 600,000 barrels per day. Exports increased flows are necessary to bridge overall economy of Kurdistan as we move 2014. The report detailed all revenues KRG to Kurdish citizens, while another via pipeline sustained 450,000 barrels the shocking budget issues facing Iraq. through 2015. As reliable gas comes to $8.8 billion received by the MNR for hydrocarbons $274 million was allocated to efforts to per day with the remaining 150,000 bar- Oil prices will continue to make head- market, new industries will emerge lead- production, as well as all of the MNR's improve liquidity in Kurdish banks. rels per day being delivered to the local lines in 2015. The unprecedented declines ing to additional foreign investment and MNR Spending (2007-2013) funding for other ministries and projects The report drew upon data stretch- refining market. Kurdistan’s peer group in the oil price at the end of 2014 will employment opportunities. The dawning in the Region. ing back to 2007, providing an inter- for oil exports includes countries such as sustain in 2015 and cause revenue gen- of the gas age will pay dividends for gen- 239 million barrels According to the report, the MNR esting look at growth in both revenues Brazil, Ecuador, Indonesia and the UK. eration issues for oil producing countries erations and allow for a more diversified Total KRG Oil Consumption (2013) received $9.7 billion in total revenues and and public spending since that time. The Continued expansion of production throughout the world. Governments liv- and productive economy. had $8.8 billion in costs over the 2007- MNR's annual revenue jumped from in 2015 will see Kurdistan eclipse oth- ing the largesse period of oil prices above From the accomplishments and chal- $872 million 2013 period, resulting in a net $920 mil- $29.6 million in 2007 to nearly $2.9 bil- er producing countries, such as Oman, $100 per barrel will have to reassess gov- lenges of 2014 to the upward trajectory of lion surplus. In 2013, however, the MNR lion in 2013, while spending increased Azerbaijan and Algeria, and continue to ernment spending and think austerity. 2015, Kurdistan remains a choice destina- Total Operational Costs and Overhead (2013) ran a $1.2 billion deficit due to increased from just $6,382 in 2007 to over $4 bil- forge its place as a world oil producing Although short-term pain is inevitable, tion for energy sector investors. The years payments to KRG institutions, receiving lion last year. and exporting leader. especially in Iraq which is so highly tied of exploration and discovery are deliver- $2.9 billion in revenues while spending The report also demonstrates the Geopolitical relations on energy issues to oil exports for government revenues, ing production and development. The $2.8 billion $4 billion. Operating profits, however, dominance of the Tawke and Taq Taq made notable progress at the end of 2014 a reset of spending and reprioritization challenge of an enemy is building smart Total Operating Revenue (2013) jumped 47.3% from $1.33 billion in 2012 oilfields in terms of production and oil and are on a positive path for 2015. As toward efficiency will benefit longer term resilience and resistance. The emergence to $1.96 billion in 2013. sales. Of the $779 million received in oil new leaders settled in their positions in growth. As oil companies decide where of self-sufficiency is delivering mutually $1.96 billion The report also details the MNR's sales (including exports) in 2013, the two Baghdad, constructive engagement on the to invest, the relatively cheaper oil pro- respectful regional cooperation. Indeed Total Operating Profit (2013) overhead costs, one-off costs, and its pay- major fields contributed $745.2 million, energy sector emerged. Previous evacu- duction costs in Kurdistan will be prime Kurdistan remains as a choice destination ments for KRG ministries, governorates, or 95.7%, of that year’s total sales. A ation routes for oil from Iraq to Turkey targets for oil investors. Match that with a in the energy world. A 92 — Kurdistan Review Invest in Group — 93 E ENERGY

As of 2009, the Kurdistan Region had not exported a single barrel of crude and was only producing a ANALYSIS— few thousand barrels of oil per day. Kurdistan Energy Update Now, just six years later, the Region 2015 brings new challenges but promises to be the is promising to produce a million best year yet for Kurdistan's energy sector. barrels per day within a year's time as new fields come online and existing fields double their production capacity.

Shwan Zulal — s of 2009, the Kurdistan Region In the wake of the capture of Mosul by Production at major fields is set to dou- Baghdad, however, has not yet come but the government is signaling its open- Director, Carduchi Consulting had not exported a single barrel ISIS and the Iraqi army's desertion of its ble in 2015. Experts expect production at around to this idea and has refused to ness to investment in these untapped Aof crude and was only producing posts in Kirkuk, Peshmerga forces moved Tawke to reach 200,000 bpd by the end drop lawsuits in US courts against vessels reserves. Managing a rapid expansion a few thousand barrels of oil per day. Now, to fill a threatening power vacuum that of the year. Taq Taq should add anoth- carrying exported Kurdish crude. in crude production alongside efforts to just six years later, the Region is promis- had formed on the Kurdistan Region's er 60-70,000 bpd, approaching Tawke's Despite a slump in oil prices, exploit gas reserves in producing fields ing to produce a million barrels per day borders. The Kirkuk oil fields have since production figures. Khurmala is also Kurdistan should see an array of invest- will likely be a challenge for oil compa- within a year's time as new fields come come under KRG control. With the crude expected to expand production to the ments in new fields and new production nies and the government, although the online and existing fields double their they produce stranded due to unusable same levels. New fields are also set to facilities in 2015. A route for exports has potential rewards could be great. production capacity in an unprecedent- pipeline infrastructure, the KRG has come online. Taqa's Atrush field, Gulf been established, and the ISIS threat has The Kurdistan Parliament is consid- ed expansion of the Region's oil and gas made use of this oil for its own domestic Keystone's Sheikhan field, MOL's oper- receded. At the same time, many opera- ering a draft law authorizing the govern- industry. needs. This, in turn, has freed up more ation in the Akri Bajeel block, and Oryx's tors have declared commerciality and are ment to issue bonds in order to finance A combination of factors, including crude from Kurdish fields for export. Demir Dagh field are all poised to pro- contractually obligated to enter the pro- projects like gas developments and power sound investment policies and shifting The KRG's Ministry of Natural duce in 2015. duction phase. Two years ago, the MNR plants, although many MPs are not yet The KRG Ministry of geopolitical circumstances, has prompted Resources (MNR) expects to export Looking at the figures above, the found it difficult to press for production convinced of its merits. It is not clear if this expansion. The big push to increase 800,000 bpd of oil by the end of 2015. The picture looks very promising for the plans, because the only available export the law will pass in its current from, but a Natural Resources production and exports came after recent agreement between Baghdad and Kurdistan Region, and the target outlined route relied on transporting oil by truck watered down version of the legislation is expects to export Baghdad expressed its vehement oppo- Erbil provides a mechanism to restore by the MNR looks plausible. The question and there was great uncertainty about the likely to make it through Parliament. The sition to Kurdish control over oil polices Kurdistan's budget in return for the of payments to oil companies still remains future of crude exports. After a year of law's passage will help finance large proj- 800,000 bpd of oil and the Region's decision to grant its own KRG's assistance exporting 550,000 bpd an issue, however. In Iraq's 2015 federal successfully selling millions of barrels of ect including new gas processing facilities, by the end of 2015. production sharing contracts. In January of oil for the Iraqi government (250,000 budget, funds for cost recovery by IOCs crude on international markets, although refineries, and power plants, as well as 2014, Baghdad cut off the Kurdistan bpd from fields within Kurdistan; 300,000 will be included in the KRG's 17% bud- not without problems, the prospect of the expansion of existing infrastructure. The recent agreement Region's budget after the completion bpd from fields near Kirkuk). The deal getary entitlement. Given the shortcom- exporting oil is very much a reality and Liquidity issues, a financial crisis, bat- between Baghdad of a pipeline allowing independent oil seems very promising, but so far few ings of the Iraqi budget and the KRG’s the question now is infrastructure capac- tles to establish a route to market for oil exports. Export volumes increased gradu- details have been discussed. tenuous financial situation– starved for ity rather than politics. exports in the face of court challenges and Erbil provides a ally and are currently above 280,000 bpd. In 2015, both sides will be searching cash by Baghdad over the last year – pay- from Baghdad, a collapse in crude oil mechanism to restore Turkey, more than any other player, for a way to restore trust and solve the ments to oil companies in the first half of Gas Development prices the Region depends on to pay its has made exports possible. Over the last bevy of disputes brought to a head over 2015 are likely to be intermittent, as they The KRG has ambitious plans to develop bills, and war with the so-called Islamic Kurdistan’s budget in five years, Ankara has proven to be a reli- the eight years of former Iraqi PM Maliki’s were in the later half of 2014. Kurdistan's gas fields in 2015, and a recent state over the past year all drove home return for the KRG's able business partner for the KRG, despite divisive tenure. The most contentious The KRG insists on its right to export deal with Genel Energy to develop the the need to bolster Kurdistan's econom- occasional political differences. Exports issue will be oil, which also entails ques- oil at levels beyond the 250,000 bpd it Miran field is part of this drive. The MNR ic and strategic resilience. In 2015, the assistance exporting from Ceyhan continue, and the KRG is tions concerning company cost recov- has recently agreed to market through will be taking on the task of processing Region aims to raise oil exports to levels 550,000 bpd of oil for able to sell oil through Turkey despite ery, budgetary funds still owed to the SOMO (Iraq’s State Oil Marketing natural gas and is looking at large invest- that will give it the option of self-suffi- opposition from Baghdad and discour- Kurdistan Region, and the KRG's right Organization) in order to cover its bud- ments in the gas sector. Many gas fields in ciency if hostile regional forces reassert the Iraqi government. agement from the US. to export crude independently. get shortfall and pay oil companies. Kurdistan have not yet been developed, themselves. A 94 — Kurdistan Review Invest in Group — 95 E ENERGY

ANALYSIS Registering an Oil Services Company in the Kurdistan Region of Iraq Incorporating a Local Oil Services Company: Alain Hannouche — of constitutionally designated authority. issuing registration certificates, so a num- The most common legal entity in Iraq is company in order to get the mandatory Head of Erbil Office, The laws pertinent to the registration ber issued by the MNR is a company’s the Limited Liability Company (LLC). preapproval of the Ministry of Natural Hannouche Associates of oil services companies are the “Iraqi only reference and proof of registration Joint Stock Companies in particular Resources for the completion of their reg- Civil Law No. (40) of 1951,” “Companies in the Kurdistan Region. need special approval from the Council istration process. An oil services oreign oil services companies Law No. (21) of 1997,” and “Foreign At the same time the registration of Ministers in order to be established and After a company is incorporated, it can company’s decision looking to establish a presence Branches and Representative Offices process is initiated or shortly thereafter, are generally chosen only when required begin the process of obtaining a registra- Fin the Kurdistan Region of Iraq Regulation No. (5) of 1989,” all of which firms must file an application accompa- by law, when other common legal forms tion on the Vendors’ List at the Ministry to open a branch are subject to the special directives and have been enacted by the Iraqi Parliament nied by all required supporting docu- of entities are still not available. of Natural Resources. The Ministry has in the Kurdistan requirements of the Ministry of Natural and ratified without amendment by the ments from their parent company with Much like the branch opening pro- made Vendors’ List registration a strict Resources (MNR) in Erbil, most of which Kurdistan Parliament. In addition, the the Companies’ Registrar at the Ministry cess, a registration application must be prerequisite for all oil companies and Region, rather than involve mandatory prerequisite approvals Ministry of Natural Resources in Erbil of Trade and Industry in order to open filed with the Companies’ Registrar at the their suppliers in the Kurdistan Region, incorporating a new for the completion of the registration pro- regulates the registration process through a branch. The Companies’ Registrar will Ministry of Trade and Industry. It should and it forbids companies currently oper- cess for operations in Kurdistan. the directives it issues. This array of laws transfer the application to the Ministry of be noted that a local LLC can be whol- ating in the oil and gas sector from deal- local company, offers The details of these conditions and and the powers reserved for Kurdish Natural Resources for preapproval of the ly-owned by a foreign parent company ing with any supplier whatsoever that is the advantage of a the practical constraints posed by their authorities mean that the legal framework branch opening, which will be suspend- or by foreign individuals. not included on the list. application need to be fully understood discussed in this guide will apply primar- ed until the Vendors’ List registration is After the application’s submission and Companies that opt for a local LLC quick, straightforward and taken into account when planning ily in the Kurdistan Region and differ completed. After preapproval is granted, its transfer to the Ministry of Natural frequently do so because of the legal and process for establish- the legal structure of any company’s greatly from the conditions and require- a company’s application to open a branch Resources, proceedings start to differ con- financial protection this route provides presence in the Kurdistan Region. This ments imposed in the rest of Iraq, even is transferred back to the Companies’ siderably from those under the branch for the parent company, but often have to ing a legal presence in is especially true with respect to the dif- though processes in both areas are based Registrar, where the parent company’s opening process. Unlike branches of for- look for practical ways to overcome the the country. ferences between requirements to register upon the same laws and regulations. application documents are examined in eign companies, local LLCs are required obstacles associated with incorporation a branch of a foreign oil services company order to move forward with the standard to insure a contract or a subcontract requirements and prerequisites. and the incorporation of a local entity. Registering a Branch of a branch opening process and complete the with a registered, currently operating oil A Foreign Oil Services Company: registration. Applicable Laws: Nearly all foreign entities have the ability An oil services company’s decision to The Republic of Iraq is divided into to open a branch in the Kurdistan Region, open a branch in the Kurdistan Region, The Comment two legal jurisdictions– that of the Iraqi though legal procedures differ based on rather than incorporating a new local The great promise of Kurdistan’s oil sector has placed it on the federal government and the separate their field of activity. As a prerequisite, company, offers the advantage of a quick, radar of most oil and gas companies operating in the Middle East, jurisdiction of the Kurdistan Region oil services companies need to be regis- straightforward process for establishing but planning that ignores the Region’s unique legal structure can of Iraq. This means that each company tered on the Vendors’ List at the Ministry a legal presence in the country. In many quickly lead to detrimental consequences. It is therefore beneficial needs to be registered separately in each of Natural Resources in Erbil. This reg- cases, this proves to be the decisive fac- for any company looking to enter the Iraqi oil services market to fully of the two regions. Furthermore, the istration can be initiated electronically tor for companies that opt for the branch understand the practical implications of the conditions imposed by Kurdistan Parliament holds the power and followed through with the Ministry solution, despite the financial and legal Iraqi law and the Ministry of Natural Resources described above. to ratify, amend, or reject laws enacted in order to obtain a registration number. risks such a setup poses for the parent by the Iraqi Parliament in certain areas For the time being the Ministry is not company.

96 — Kurdistan Review Invest in Group — 97 DELOITTE How to Start-Up Doing Business in the Kurdistan Region

Deloitte in Kurdistan Understanding local How will you benefit? requirements is key to success Using our expertise to add value and reduce risk Operating in over 150 countries around the world, Deloitte, the In a raw and lucrative market such as the Kurdistan largest professional services firm in the world, is recognized for Region of Iraq, there are definite opportunities; its talent, scale, position and size. Our firm brings the experience hence, patience and local relationships are essential that you require to mitigate the risks and challenges that your business might face in Kurdistan. We have a deep understanding ingredients to a successful entry. of the local statutory accounting and tax compliance requirements; The Kurdistan economy is heavily reliant on oil accordingly, many of the world’s largest companies operating in revenues, but recognizing that oil export receipts the Region rely on our know-how. cannot keep pace with spending for reconstruction, Knowledge and value the Kurdistan Regional Government introduced new Our team has extensive working knowledge of Kurdistan’s legislations in an effort to attract private sector and investment and regulatory climate. We are well placed to provide foreign investment. These new measures are meant support with regards to accounting, corporate income tax, and to boost Kurdistan’s economy driving non-oil GDP up. social security filing obligations, and to create lasting value. With The primary beneficiaries are many industry such full-time dedicated resources on the ground in our Erbil office, Deloitte’s practice in the Kurdistan Region blends global knowledge sectors including, but not limited to: construction and local expertise, a factor which we believe sets our firm apart. and construction materials, branded consumer goods, healthcare, technology & electronics, retailing, Deloitte’s Kurdistan practice provides comprehensive and financial services and capital markets. integrated solutions Deloitte is among the region’s leading professional services This start-up guide is designed to walk a new firms, providing audit, tax, consulting, and financial advisory entrant through the key steps in setting up a business services through 26 offices in 15 countries in the Middle East, with in Kurdistan. Please note that this guide is general in uninterrupted presence since 1926. Deloitte has a legal entity scope and should not be relied upon as legal, tax or registered in Erbil with dedicated resources on the ground available other professional advice specific to your industry, to meet with clients of the public and private sectors locally and to liaise with regulatory and tax authority personnel as required. country of origin and business structure. Subsequent changes in or to the foregoing (for which Deloitte Commitment to being at the fore of supporting our clients shall have no responsibility to advise readers) may As you grow your business in Kurdistan, we will be available to help result in the information provided by Deloitte being you every step of the way. We will work with you to ensure that you are kept up-to-date on developments in the Kurdistan Region rendered invalid. regulatory and tax areas. We would like to thank Hannouche Associates With a globally connected network of member firms, Deloitte for providing the legal section of this guide. We brings world-class capabilities and high-quality service to clients, hope that you will find this to be informative and delivering the insights they need to address their most complex your experience here in Kurdistan enjoyable and business challenges. Deloitte's professionals are unified by a collaborative rewarding. culture that fosters integrity, outstanding value to markets and clients, commitment to each other, and strength from cultural Respectfully, diversity. They enjoy an environment of continuous learning, challenging experiences, and enriching career opportunities. Deloitte's professionals are dedicated to strengthening corporate Ayad Mirza, responsibility, building public trust, and making a positive impact in Country Managing Partner, their communities. Iraq Deloitte & Touche Management Consulting, WLL

Invest in Group — 99 HOW TO START UP DELOITTE

• An LLC can own a motor vehicle but its 2.2 Practical guidelines foreign shareholders cannot own such • Incorporation time: 10 – 12 business days. vehicles in their own names unless they • Branches of foreign companies must hold a one year residency permit. keep the same name and ownership Choice of entity and legal • An oil services LLC needs to win a structure of the parent company. contract with an operating oil company • The parent company is financially and business structure in order to be granted the preapproval of legally liable for the branch’s activities. the Ministry of Natural Resources on its • Branches of foreign companies cannot As a general rule, a foreign company that is passport copy and/or other local incorporation. own real property. “carrying on business” in the Kurdistan identifications, and a power of attorney in • The approval of relevant syndicates for region of Iraq is required to establish a favor of a Kurdistan region lawyer to be 1.3 Foreign entity as a shareholder the branch registration is more costly legal presence in the region (e.g. company, signed by all individual shareholders. In case the LLC will be partially or wholly than the same approvals required for the In case the LLC branch office, etc.). While there is no • A copy of the leased premises’ contract in owned by a foreign entity, the latter must incorporation of an LLC. will be partially or specific definition as to what constitutes the Kurdistan region. have been incorporated for more than one • Branches of foreign companies can own a wholly owned by Iraq’s Companies “carrying on business”, typically an • Evidence of residency of proposed year. The documents below are to be motor vehicle. obligation would arise when the company managing director in the Kurdistan provided by the foreign entity. All • Branches of foreign companies are a foreign entity, Law 21 (of 1997) as obtains premises (including rented region. documents must be translated to Arabic exempt from the classification the latter must be amended in 2004, premises), retains personnel on a more • A minimum share capital for an LLC of 1 and certified at the Iraqi embassy in the requirements of the Ministry of Planning. incorporated for which is adhered to than temporary basis, or in general, enters million IQD must be fully paid up prior to entity’s home country: • Branches of foreign companies registered more than one in Kurdistan allows into agreements meant to be directly completion of the registration process (oil • Articles of Association in the Iraqi Kurdistan region cannot year. for several types performed in the region. services companies shall have a minimum • Certificate of Incorporation operate in Federal Iraq. Iraq’s Companies Law 21 (of 1997) as share capital of 2 billion IQD). • Last filed financial statements • The parent company needs to have been of legal business amended in 2004, which is adhered to in • An LLC must have one managing director • Resolution to own an LLC in the Kurdistan incorporated for more than a year in structures. Kurdistan, provides for several types of and must appoint a statutory accountant Region order to be allowed to register a branch in Principally these legal business structures. Principally these and a statutory lawyer. The latter two the Kurdistan Region of Iraq. include joint stock include joint stock companies, limited must be Iraqi nationals while the 2. Registering a branch of a • A branch of a foreign oil services companies, limited liability companies, joint liability managing director could be a foreign foreign company company is not required to secure a companies, sole proprietorships, and national. 2.1 Legal requirements contract with an operating oil company in liability companies, branch offices. • An application form must be completed. order to be granted the Ministry of joint liability Below we set out to list some of the 1.2 Practical guidelines • Certificate of Incorporation of the Parent Natural Resources preapproval on its companies, sole more important legal requirements and • Incorporation time: 15 – 20 business Company registering the branch office. registration. proprietorships, practical guidelines necessary to set up the days. • Articles of Association/Charter of the and branch offices. two most prevalent legal structures in • An LLC can be wholly owned by a Parent 3. Residency permits Kurdistan: Limited Liability Companies and foreign citizen or a foreign entity. • Company and a Resolution to open a • Locally incorporated LLCs and branches Branches of Foreign Entities. • The maximum number of shareholders is branch in the Kurdistan region of Iraq. of foreign companies have the same 25. • A Power of Attorney from the branch rights regarding residency permits. 1. Registering a new Limited • An LLC may engage in any activity other director and authorized signatory in favor • The LLC or the branch, is the only branches of Liability Company (LLC) than banking, financial investments and of a Kurdistan region lawyer to undertake required guarantor for the issuance of foreign companies 1.1 Legal requirements insurance. registration procedures. residency permits for the company’s registered in the • A corporate name must be reserved at • An LLC is required by law to hold two • A copy of the leased premises’ contract in director, shareholders and employees. the local Chamber of Commerce. General Assembly meetings per year. the Kurdistan region. • Individuals entering the Kurdistan region Iraqi Kurdistan • An application form must be completed. • An LLC is allowed to own real property • Evidence of residency of proposed through a visa issued by the Iraqi Region cannot • Articles/Memorandum of association even if wholly owned by a foreign citizen managing director in the Kurdistan Region. embassy are not eligible for residency operate in Federal must be drafted and signed. or a foreign entity. • All documents must be translated to permits. Iraq. • For each corporate shareholder: a • An LLC incorporated in the Kurdistan Arabic and certified at the Iraqi embassy • The Ministry of Interior issues two types certificate of incorporation; articles of region cannot operate in Federal Iraq. in the entity’s home country. of visas: visit visas and work visas. The association/charter, last filed financial • An LLC incorporated in the Kurdistan • A branch must have one managing latter is the only type of visa enabling the statements and a power of attorney in region can open a branch in Federal Iraq. director and must appoint a statutory foreign individual to issue a residency favor of a Kurdistan region lawyer is to be • An LLC is subject to the classification accountant and a statutory lawyer. The permit. signed by the authorized signatory of the requirements of the Ministry of Planning latter two must be Iraqi nationals while corporate shareholder. when such classification is required to the managing director could be a foreign • For each individual shareholder: a enter into a certain contract or tender. national.

100 — Kurdistan Review Invest in Group — 101 HOW TO START UP DELOITTE Taxation Registered companies and branches of foreign As a semi-autonomous Region, the forwards, but in accordance with Iraqi Kurdistan Region has introduced certain Income Tax Law No. 113 of 1982 as entities are required to make annual corporate tax laws and practices that diverge from amended in 2003: the position in Federal Iraq. This section • Losses incurred during the year may be The current income discusses corporate income tax; including carried forward for a maximum of five tax rate for all tax filings with the Income Tax Directorate issues such as compliance, income tax rate, consecutive years, to be offset against industries is a flat and loss carry forwards. profits generated from the same source 15% calculated Transfer pricing, capital gains, as the original loss. based on the (ITD), and make payment of corporation tax, withholding tax, employment tax, social • Up to 50% of the taxable income in a security contributions, VAT/sales tax and year may be sheltered by brought net accounting by 30th of June following year-end (Note: import, export and customs duties are also forward tax losses. profits per discussed. • To the extent that an entity is loss audited financial making, the tax authority may seek to statements; the statutory filing deadline is 31 May, but a 1 1. Corporate tax assess the entity on a deemed profits 1.1 Compliance basis, which would effectively disregard however, it is not month extension is in practice applied by the • Entities are required to register with the any losses incurred in the current year uncommon for Income Tax Directorate (ITD) in Kurdistan and deny the entity of tax relief for the ITD to assess Region for corporate income taxes. carried forward losses in future periods. corporate income tax authority to all businesses). • The Income Tax Directorate (ITD) taxes based on typically requires Kurdistan entities to 2. Transfer pricing pre-determined complete the tax registration by way of • There are no formal transfer pricing rules their first corporate tax filing. in Kurdistan Region. industry sector • Registered companies and branches of • The tax authority, however, reserves the deemed profit foreign entities are required to make right to adjust transactions, for tax schedules. annual corporate tax filings with the ITD, purposes, which they consider not to be and make payment of corporation tax, by at arm’s length. 30th of June following year-end (Note: 4. Import – Export the statutory filing deadline is 31 May, but 3. Capital gains • All companies are allowed to issue an foreign employees. Foreign employees a 1 month extension is in practice applied • There is no separate capital gains tax import/export license. can legally perform their duties based by the tax authority to all businesses). regime in Kurdistan Region. Currently, three • The type of products that needs to be only on their residency permit. • The penalty for late filing is currently 10% of • Gains and losses realized by a Kurdistan imported must be specified in the license • Legal disputes arising out of the the tax due, capped at IQD 75,000 per year. entity on disposal of non-current assets is industrial free application. employment relationship fall under the classified as ordinary income and is zones are under • The ports of entry that will be used by jurisdiction of a special labor court. 1.2 Corporate income tax rate subject to corporate income tax at the consideration as the company need to be specified in the • The current corporate income tax rate for applicable corporate income tax rate. approved projects license application. 6. Free zones all industries is a flat rate of 15%. • The tax law does not specifically provide by the board of • Once the license is issued, it must be • Currently, three Industrial free zones are • According to the tax law, if supporting for a tax on gains realized by a non- The Kurdistan notified to the relevant ports of entry. under consideration as approved projects books and records are maintained, resident. However, there are provisions Investments. They Region does not • A ceiling for the value of goods imported by the Board of Investments. corporate income tax should be included within the tax law which the tax currently impose are the Duhok, throughout the year must be specified in • The Duhok industrial zone is already calculated based on the net accounting authority could use to seek to assess tax Erbil and Slemani the license. Once the limit is reached, implemented and more investors are profits per audited financial statements. on a gain realized from the disposal by a withholding industrial zones. imports are suspended until the ceiling is sought to submit proposals for industrial • In the absence of audited financial non-resident of Kurdistan assets. taxes on service adjusted accordingly. projects. The Erbil industrial zone has statements and supporting payments and reached the final setup stage and soon documentation, it is not uncommon for 4. Withholding tax dividend payments. 5. Labor law investors will be requested to submit their the ITD to assess corporate income taxes • In practice, there is no withholding tax on • No minimum requirement on the number proposals for prospective projects. The based on pre-determined industry sector dividends. of local employees in a company is two Sulemani industrial zones offer great deemed profit schedules. • A tax of 15% should apply to payments of imposed on all types of entities. potential for investments; one of the interest to non-residents but this is not • All employment agreements must be zones is currently being developed, and, 1.3 Loss carry forwards always consistently applied. either in Arabic or bilingual, with Arabic master developers are being sought for Kurdistan Income Tax Law No. 26 of 2007 • The Kurdistan Region does not currently being the prevalent language. the other one to propose scenarios of and its subsequent amendment Law No. impose withholding taxes on service • No work permits are required for local or developing the area for industrial projects. 20 of 2011 are both silent about loss carry payments.

102 — Kurdistan Review Invest in Group — 103 HOW TO START UP DELOITTE

5. Employment tax • Entities registered in Kurdistan Region • Employers are required to pay 12% of the » Custom duties, taxes, import licenses • Health and environment. must register with the ITD for salary in respect of their employees on imported vehicles, equipment, • Science and technology research, and employment taxes with respect to their working in the Kurdistan Region of Iraq. instruments, etc, provided they are information technology. In order to avail employees working in Kurdistan. • Exemptions are available to foreign imported within two years of approval by • Modern communication and transport. of the provisions • Employment tax filings are due annually nationals working in the Kurdistan Region the Investment Commission Chairman. • Banks, insurance companies, and other by 30th of June following year-end. if covered in their home country and Custom duties and taxes on imports of financial institutions. of the Investment Employees working » • Employees working in the Kurdistan proof of coverage is documented with the linens, carpets, furniture and other • Infrastructure projects, including Law, the Kurdistan in the Kurdistan Region are subject to personal income social security office. renovation items once every three years construction, reconstruction and housing entity is required Region are subject tax at a rate of 5% on their income in • Such proof must be authenticated by the for hotels, hospitals, universities, schools, projects, roads and bridges, railways, to obtain an to personal income excess of IQD 1,000,000 per month. Iraqi embassy in the country where the and tourist institutions. airports, irrigation and dams. investment license tax at a rate of 5% • Social security contributions withheld foreign employee resides. » Custom duties for five years on • Free zones, modern commercial markets, from the employee are deductible when imports of raw materials for production. and relevant advisory services. in respect of the on their income calculating taxable income. 7. VAT/Sales tax • Employment of foreign workers provided • Education at all levels, within the specific project. in excess of IQD • Both foreign and local Iraqi national • There is currently no VAT or sales tax no capable Iraqis are available. Foreign framework of the educational policy of 1,000,000 per employees are assessed tax on the same levied on goods or services in the workers may repatriate earnings. the Region. month. basis. Kurdistan Region. • Equal treatment of foreign investor and • Any project in any other industry which capital as national investor and capital. the council agrees is covered by the 6. Social Security contributions 8. Import, export and custom • An investor may transfer his investment provisions of this law. • All employers operating in the Kurdistan duties totally or partially to another foreign or to Region are required to remit Social • Under Iraq domestic legislation, customs a national investor, or may assign the 3. Licensing procedures Security and Pensions Contributions duty on goods brought into Iraq is project to his partner with the approval of In order to avail of the provisions of the (SSPC) for their employees in the generally 5% of the CIF value of the the board. Investment Law, the Kurdistan entity is Kurdistan Region. goods imported. • Services provided by the Kurdistan required to obtain an investment license in • There are two components to the SSPC: • Customs duty exemptions may be Regional Government to the boundary of respect of the specific project. The Employees are required to contribute 5% available for goods and equipment the project, such as water, electricity, following are necessary procedures when of their monthly salary. The employer imported in connection with upstream oil sewage, public roads, submitting a request: deducts at source this amount from the and gas activity, or goods imported on a telecommunications, etc. • The entity is required to submit an employee’s salary. temporary basis. • Foreign or domestic insurance and application to the Board of Investment additional incentives for projects in “less accompanied with documentation that developed areas” and “joint projects” would assist in obtaining the exemption between Kurds and foreigners. e.g. description of the project, copy of the • Protection under the Supremacy of contract (if available) and a summary of Investment Law Kurdistan Law (Art. 115 of Iraq’s how the project would contribute to the Constitution) whenever there is any development of the Region. contradiction between this law and “other • The board will have to decide on the Law No 4 of 2006, Law of Investment in approvals) should benefit from: relevant laws,” the provision of this law application within 30 days from the date Law No 4 of the Kurdistan Region (the “Investment • Total ownership of project land allowed, shall be applicable. of fulfillment of the technical, legal, and Full repartition of 2006, Law of Law”) provides for tax incentives and except investors may not own land • An investor’s initiative and technical economic conditions and requirements. exemptions for foreign investors in the containing oil, gas or mineral resources. know- how are protected under this law • The board shall then consult with project investment Investment in the Kurdistan Region who are involved in • Full repartition of project investment and and any person, by virtue of his post, who competent authorities on the advantages and profits is Kurdistan Region certain qualifying projects. The Investment profits. discloses any information, will be of issuing the license and such authorities allowed and upon (the “Investment Law sets out specific projects which are • A foreign investor shall be entitled to punished. will give their viewpoint for the liquidation or Law”) provides for considered to qualify for an investment send his capital back abroad upon acceptance, rejection or amendment disposal of the license. In general, projects involving vital winding up or disposal of the Project 2. Eligible projects request within 30 days from the date of tax incentives and sectors, such as electricity, agriculture, without prejudice to applicable laws and The provisions of this Law shall apply to the board’s referral of the application to project, a foreign exemptions for health and environment, infrastructure and regulations regarding taxes and customs. the projects approved by the board in one them. investor shall be foreign investors education, etc. qualify as eligible projects. • Exemption from the following taxes: of the following sectors: • If the application is rejected, the applicant entitled to send his in the Kurdistan » All non-custom taxes and duties for a • Manufacturing industries, electric power may raise an objection to the president of capital abroad. Region who are 1. Key provisions of the period of ten years from the date and related services. the council within 15 days from the date Investment Law production commences or the date • Agriculture, whether crop growing farms or of the rejection notice. involved in certain According to the Investment Law, projects services are offered. animal farms, forestry and related services. • The president of the council will have to qualifying projects. which qualify for an investment license » Custom duties on imports of spare • Hotels, tourist and recreational projects, respond within 30 days and his decision (and which have obtained the requisite parts up to 15% of project cost. funfairs, and amusement parks. shall be conclusive.

104 — Kurdistan Review Invest in Group — 105 HOW TO START UP DELOITTE

This guide has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this guide. Deloitte, Deloitte & Touche (M.E.) and Deloitte & Touche Management Consulting, WLL would be pleased to advise readers on how to apply the principles set out in this guide to their specific circumstances. Deloitte, Deloitte & Touche (M.E.) and Deloitte & Touche Local statutory accounting Management Consulting, WLL accept no duty of care or any liability for any loss occasioned to any person acting or and auditing requirements refraining from action as a result of any material in this guide. There is a requirement for Iraqi entities to auditor and/or the accountant must have • It also provides for unified depreciation About Deloitte submit annual audited financial statements the audited financial statements stamped methods and tables by industry sector and Deloitte refers to one or more of Deloitte Touche Tohmatsu to the Companies Registrar and General by the Institute of Accountants and asset type. The financial statement presentation Limited, a UK private company limited by guarantee, and its Commission for Taxation. The financial Auditors. follows that numbering scheme and provides for network of member firms, each of which is a legally separate statements must be in Arabic and in • Typically, five originals are needed: a uniform design to all financial statements with and independent entity. Please see www.deloitte.com/about accordance with Iraq’s Unified Accounting » Two original copies to be kept by the extensive statements, analysis and tables to for a detailed description of the legal structure of Deloitte System (IUAS). Strictly, Iraqi corporate law company support every single line. Touche Tohmatsu Limited and its member firms. requires that Iraqi entities maintain Arabic » One original copy to be kept by the Deloitte provides audit, tax, consulting, and financial accounting books and records inside Iraq. local auditor 4. IUAS manual and guide advisory services to public and private clients spanning » One original copy to be submitted to • The Unified Accounting System (UAS) manual multiple industries. With a globally connected network of 1. Local statutory accounting the Companies Registrar on or before consists of the following main chapters: member firms in more than 150 countries, Deloitte brings requirements April 30th following year-end » The general framework of the chart of world-class capabilities and high-quality service to clients, • For companies that maintain an ERP » One original copy to be submitted to accounts delivering the insights they need to address their most system in a language other than Arabic, the General Commission for Taxation on » Explanations of the chart complex business challenges. Deloitte has in the region of all of the General Ledger line item or before June 30th following year-end » Handling of transactions 200,000 professionals, all committed to becoming the transactions as shown on the ERP system » Accounting books standard of excellence. There is a must be translated into Arabic on a 3. 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They enjoy an environment of continuous learning, and records under International establishment of a committee which was » Budget planning challenging experiences, and enriching career opportunities. annual financial Accounting Standards, an annual formed by representatives of various » National accounts Deloitte's professionals are dedicated to strengthening statements in conversion to the Iraq Unified Accounting governmental institutions and accounting » Mechanization of UAS corporate responsibility, building public trust, and making a Arabic and in System is mandatory. experts. • The guide to Unified Accounting System positive impact in their communities. accordance with • The aim was to establish a Unified includes the basic forms of the financial the Iraq Unified 2. 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It financial control. » Manufacturing, trading, profit and loss, and services firm established in the Middle East region with is noteworthy to mention that currently, • The final version of the guide to the appropriation account uninterrupted presence since 1926. none of the international accounting firms Unified Accounting System was » Profit and loss account for completed Deloitte is among the region’s leading professional services have a local audit license to be able to presented in March 1981. contracts firms, providing audit, tax, consulting, and financial advisory sign off on the IUAS financial statements. • The primary objective of the Unified » The statement of current operations services through 26 offices in 15 countries with around 3,000 • The audited financial statements must Accounting System is to provide a » The statement of the total added value partners, directors and staff. 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It has received numerous awards in the or by the branch manager in the case of a used across various industries. » The accompanied detailed statements last few years which include Best Employer in the Middle East, foreign branch. • It provides for a rigid numbering scheme (disclosures and footnotes) best consulting firm, and the Middle East Training & • A third signature from the company’s for asset accounts, liabilities, equity, Development Excellence Award by the Institute of Chartered statutory accountant is required. revenue and expenditure accounts and Accountants in England and Wales (ICAEW). • Once signed off, the local licensed for multiple sub-accounts per category. © Deloitte & Touche (M.E.). All rights reserved.

106 — Kurdistan Review Invest in Group — 107 REAL ESTATE & CONSTRUCTION

THE REVIEW Real Estate & Construction

SECTOR AT A GLANCE

58,690-unit Annual Housing Demand

$13.7 Billion $ Total Investment (2006-2012)

166 Total Projects (2006-2012)

$1.3 Billion $ Investment Needed through 2020 The New Trend 283,000 units Housing in need Real estate and construction, two of Kurdistan's of rehabilitation most quickly changing sectors, saw important advancements in standards and financing in 2014. 6,057 Acres As a central driver of the growth in by foreign companies entering Kurdistan. Land Allocated foreign and domestic investment in In many respects, 2014 saw the initial Kurdistan, construction and real estate rumblings of many consequential shifts have drawn a huge amount of resourc- in the sector. es to the Region–$13.7 billion in Board Trends that have gained steam in 2014 700% increase in of Investment-licensed housing projects and will persist in coming years include supply across (not including commercial or industrial a move towards increasingly high qual- all sub-sectors space) alone since 2006. They are also, ity builds, standardization and enforce- (2017) however, two of the most quickly chang- ment of construction and development ing sectors in Kurdistan, with shifting standards, and, in the longer term, a dynamics in the quantity and quality of stronger and more liquid market with construction, as well as the quality of res- the increased use of financing and insur- idential and commercial space demanded ance in the sector.

Invest in Group — 109 R & C REAL ESTATE & CONSTRUCTION Did you know? The KRG will need to invest a minimum of $172 million per year. %700 $13.7B $1.3B Increase in supply across all Investment Needed Total Investment subsectors by 2017. (until 2020)

As quantity meets demand, In the wake of shifts in the larger econo- Consumers tend to buy houses and apart- Trends that have gained however, and global my, changing demands have driven each ments in cash, as there is no mortgage companies set up shop in of these trends. For example, internation- market. Developers are similarly limited steam in 2014 and Kurdistan, quality is now al oil companies (IOCs) that have flocked in terms of risk and leverage, as they can- will persist in coming securely in the spotlight. to Kurdistan in recent years to begin not finance major development projects, years include a move In many respects, 2014 has exploration for hydrocarbons are now stunting the quality and quantity of real towards increasingly seen initial rumblings of moving into the production phase. Such estate built in Kurdistan. Lack of insur- many consequential shifts in a shift means they will be in Kurdistan ance also means that homeowners cannot high quality builds, as the sector. more permanently and will require more secure or leverage their properties. well as standardization staff. This translates to higher demand While building standards do exist, for graded office space and high quali- they are seldom enforced. This ultimate- and enforcement ty housing in the real estate sector (and, ly leads some developers to build cheap, of construction and conversely, less demand for long-term shoddy projects that can sometimes development standards. hotel stays and smaller, cheaper forms pose safety risks. High demand and the of housing or office space). Other indus- nascent nature of the market have created tries moving into the Kurdistan Region a degree of “short-termism” among some and small or medium-sized enterprises developers, as cheap, quickly built proj- Space for Industry (SMEs) will likely take the place of IOCs ects are expected to be quickly profitable. In addition to these eye-catching devel- in temporary or more affordable spaces, Indeed, with the Kurdistan Region’s high opments, investments in industrial space reflecting the increased segmentation of rents, such developments often are. This are also gaining steam. Along with Erbil’s the market. dynamic is quickly changing, however, four current industrial zones, four new The sector still faces many challeng- as the real estate market and the Region’s zones are slated to open, including a es. The Region's financing and insurance economy and overall business environ- Heavy Industrial Zone, Agro-Industrial markets are still immature, leading to per- ment mature. Zone, a Petrochemical Zone, and Hawler verse effects and inefficient outcomes. Industrial City. Much of the new indus- trial space is occupied by the oil and gas Establishing Standards Breaking New Ground industry, with 270,000 square meters Shift in Focus: Quantity to Quality While market demand is pushing quality Amid these changes, new ground is explicitly allocated to the sector. Having started with very little develop- in UB Plaza, established by UB Holding. the quality of the Kurdistan Region’s real higher, this shift is still a work in progress. quickly being broken in the sector. IKG The primary challenge faced by indus- ment at all just a decade ago, the construc- As more companies make simi- estate supply is quickly improving. The Low quality building methods still per- Property projects a 700% increase in trial real estate relates to the way that land tion sector’s focus has logically been to lar transitions, either initially into the primary motivator for this change is the sist, as unified building standards are still supply across all subsectors by 2017. is zoned in Kurdistan. Industry is often build as much and as quickly as possible. Kurdistan Region or into high quality demand for quality in the market. Factors not broadly enforced by the KRG. The High-profile commercial and residential developed on land zoned for agriculture. As quantity meets demand and global permanent space, more developers are seen as essential for international busi- sector is unable and unwilling to police projects are going up quickly. New hotels While this has yet to present serious chal- companies set up shop in Erbil, however, pursuing quality in their new develop- nesses are still only sporadically applied. itself, and market demand can only do so are scheduled to open their doors on and lenges to industrial companies operating quality is now securely in the spotlight. The ments. The Erbil Business and Trade Many private sector changes could much to motivate developers to conform around Gulan Street in 2015, big residen- on this improperly zoned land, it does major international companies that are Center, a new space slated to open its move the construction sector in the right to international building standards. tial developments on the outskirts of Erbil create concerns for companies planning beginning to establish themselves perma- doors soon, consulted with IKG Property direction. Increased use of construction The leading international firms operat- are in progress and will greatly expand to invest over the long-term. Farmland nently in Kurdistan are demanding graded early in the development process to supervision to ensure that construction ing in Kurdistan would like to see a more residential real estate supply in 2-3 years, remains at risk of being compulsorily tak- office space. TAQA, the national energy ensure that its floor plans, designs, and and development firms carry out design robust regulatory and legal environment. and much-needed office space is increas- en back by the government, according to company of Abu Dhabi, is only the most safety standards were up to the expecta- and engineering work in a manner that Planning, building regulations, and build- ingly coming online. Empire World, the IKG. International tenants are starting to recent IOC to move from its previous villa tions of global companies. is true to plans and building standards ing control need to be rigidly enforced highest profile mixed-use development vigorously assess land title implications in Italian City to a dedicated, more per- According to experts, some of the new could improve quality. This would hold with particular regard to structural integ- in Erbil, is incrementally rolling out new on long-term tenure. Public-private manent office in Empire World. Others, office space that is due to go on the market builders accountable to both designers rity and safety. They see the establishment space, with international oil companies cooperation to re-zone and redefine land including Gulf Keystone and Standard still does not adhere to international stan- and project owners. of universally enforced standards as nec- quickly relocating to the site's premier for industrial use could ameliorate this Chartered, have moved into office space dards for global organizations. However, essary to the progress of the sector. office and residential facilities. situation and clarify the issue.

110 — Kurdistan Review Invest in Group — 111 R & C REAL ESTATE & CONSTRUCTION Top Projects Qaiwan Qaiwan Group is the developer will be over $150 million. of many of the construction Qaiwan's Sulaymaniyah Heights projects now underway around project is a luxury housing de- Slemani. velopment located in the Azmar Qaiwan has completed Mountains overlooking Slemani. phase one of Qaiwan City, a When it opens it is slated to be 360-unit residential complex, the most advanced develop- and has nearly completed ment project in Kurdistan. The phase two, which will include development will include 2,200 about 1000 housing units. units of housing and apartments. Qaiwan is also overseeing the Qaiwan's capital expenditure on Qaiwan Towers development. The this project will be $500 million. project is the largest of its kind in Qaiwan Group is also devel- downtown Slemani. It consists of oping a more affordable project two towers and an adjoining mall. that will serve Kurdistan's middle High-profile commercial Commercial offices will occupy class while still maintaining high one of the towers, and the second quality standards. The Qaiwan and residential projects will house the Slemani Rotana Heights Apartments project will are going up quickly, big Hotel. Qaiwan aims to complete eventually become an enormous residential developments the project in late 2015. The firm's 6,000-unit apartment complex. capital expenditure on the project It will be completed in 2016. on the outskirts of Erbil are in progress and will greatly expand Erbil Arjaan Kurd Towers Erbil business residential real estate The 20-story Erbil Arjaan by The Kurd Towers are a deluxe & Trade Center Beyond Erbil Finance and Insurance Rotana is a first-class mixed-use commercial and residential The first phase of the 200,000 m2 While Erbil has largely paved the way in Perhaps the most significant limit- supply in 2-3 years, and project that will provide serviced development by Faruk Real Estate. Erbil Business and Trade Center’s the real estate and construction sectors, ing factors in the sector are Kurdistan’s much-needed office offices and hotel apartments to The towers will comprise 265 (EBTC) Justice Tower will reach drawing more international investment nascent finance and insurance markets. space is increasingly clients in the Kurdish capital. Total residential units and 160 offices.The completion in the fourth quarter than elsewhere, Slemani is seeing major Alternatively, buyers can pay for housing investment in the project is $52 Kurd Towers will rise 175 meters, of 2015 at a total cost of $200 property development as well. Qaiwan in installments prior to receiving their coming online. million, with ownership divided as making them the tallest towers in the million. The EBTC will contain 1,100 Group is heavily investing in real estate and house. Effectively, there is no mortgage follows: Malia Invest Holding %60, Kurdistan Region and Iraq. offices ranging in size from 55 m2 plans to open Qaiwan Towers, a premier market. Ultimately this leads to sup- However common this may be in more SS Roza Offshore 30%, and DIVA to 4800 m2 that cater to local commercial space, this year. The devel- pressed demand for housing and real developed markets, it is not easily done Srl 10%. contractors and businesses as well as opment is set to house Slemani’s Rotana estate. in the Kurdistan Region. international corporations. Hotel in 2015. Qaiwan is also investing in For developers, the lack of financial There is reason for optimism, though. residential real estate with Sulaymaniyah markets also means suppressed real estate The lack of a financial sector has not been Heights, a luxury development contain- supply. Developers in the Kurdistan solely negative. The lack of a mortgage ing 2,200 units of housing. Meanwhile, Region must self-finance most of what market creates conditions where a real the firm is developing multiple high-end they build, translating to much less estate bubble would be nearly impossi- and mid-level housing projects, includ- risk-taking on their part and, therefore, ble– a serious concern in such a hot and ing the Qaiwan City and Qaiwan Heights fewer large-scale or ambitious projects. dynamic market. Of course, this one posi- developments. In total, Qaiwan Group Weak insurance markets compound tive aspect does not outweigh the negative. has over 9,000 new housing units slated each of these challenges. Homeowners In the longer term, development of the to come online in Slemani soon, with are at risk of losing a significant portion financial and insurance markets will be key several hundred already completed and of their assets, and are unable to leverage to unlocking additional growth and val- occupied. Additionally, international their properties for further investment. ue in real estate. While these markets are malls, long present in the Erbil market, “Once assets are insured,” notes IKG deepening thanks to the efforts of capable are now opening in Slemani. Majidi Mall Property Chairman Mario Al-Jebouri, and ambitious local and foreign banks and and Family Mall are now under construc- “investors can then look towards mon- insurers, their present weakness will likely tion there, while City Center Mall recently etizing the assets and releasing cash to present challenges to the broader economy opened its doors in the city. reinvest in other projects or sectors.” over the medium to long term. A 112 — Kurdistan Review Invest in Group — 113 R & C REAL ESTATE & CONSTRUCTION

Quality— A Growing Trend Global Design

IIG: Many foreign firms in Kurdistan So, the lack of a mortgage market and IIG: Would you say that construction of companies like us. It was challenging seem to be seeking out residential space. the lack of project finance to help inves- standards are improving in Kurdistan? to find a strategic partner that shares our How will this affect the commercial and tors and developers take on more risk What is SSH bringing to the market in values and can work productively with us. residential real estate sectors in coming has meant that the market has grown to this regard? Finally we entered into an MoU with an years? invest in quick return projects, rather YY: The market is not heavily regu- investment firm. As we are new here, we MA: This shift has already largely tak- than industrial development and other lated. We work closely with the public have yet to begin working on any projects, en place. The way this will change the longer-term ROI projects. Regarding sector and big construction compa- but we are hopeful that this will change dynamics is such that the market even- insurance, most people here do not nies, and we heavily stress the impor- very soon. tually dictates to developers how and know how insurance works, but this tance of playing on a level playing field what they should be developing. Some will change. Businesses want to know with other designers and contractors IIG: Which area of SSH’s work do you of the office space which is imminently that their buildings are insured, even in terms of quality and standards. Our see as being strategically most import- due to go online still does not adhere to if they are coming in as tenants. Once quality is on par with top internation- ant in Kurdistan currently? Mario Al-Jebouri — international standards for global orga- assets are insured, investors can then Yassin Younis — al designers, and we are confident that YY: We foresee many important areas for Chairman, IKG Property nizations, be it from security issues, effi- look towards monetizing the assets and GM-Kurdistan, SSH Design we are bringing improved quality and us focusing on building design and infra- ciency, or the quality of the build itself. releasing cash to reinvest in other proj- standards to Kurdistan. However, we structure. Construction supervision, as I Mario Al-Jebouri speaks to IIG The market is currently indicating these ects. It is certainly an aspect that has Yassin Younis reflects on SSH would also like to stress the impor- mentioned earlier, and master planning about the quickly changing issues to developers in Kurdistan, and we slowed growth, and it is critical that it Design’s entrance into the tance of having equally implemented also have significant potential here. In dynamics present in the Kurdistan can already see quality shifting upwards. is implemented in the near future. Kurdistan Region and discusses the and enforced standards and regulation. truth, however, the market is in need of Region’s real estate sector, its landscape of Kurdistan’s design and This improves the outcome for the cli- everything. The build environment has current challenges, and future IIG: What are the major challenges IIG: How is the real estate market development sectors. ents, the government, the contractors, a lot of scope for growth in Kurdistan, opportunities. related to creating stricter standards? changing as Kurdistan’s economy and the end user as a whole. When it and quality is increasingly important. MA: The challenge is to create a structure matures? comes to construction, one element that With new water systems, for example, within the bureaucratic institutions to MA: In terms of real estate, opportu- is missing is construction supervision. you cannot look to the short term. You create the leverage, capability, and man- nities exist across the board, but there The construction supervision team must must invest in quality, because major date to insure the proper implementation has been a change in the game itself. No ensure that the contractor is building the infrastructure projects cannot easily be of these standards across the board and longer can you invest in real estate and project true to the original design, with replaced every few years. without exception. They are building the guarantee major returns on investments. the right dimensions as well as the right reputation of the country and the sec- You must now be much more cautious quality and safety standards. This is why, IIG: Do you feel that momentum from tor. There must be a level playing field in the types of real estate you are invest- at SSH, we focus on four core compo- local contractors is heading towards between all developers, so that no one ing in. You must formulate your invest- nents: master planning, infrastructure, improved quality, or are many still look- feels that they are left out or focused ment strategy on sound feasibility studies, building, and construction supervision. ing for quick returns at the expense of on negatively. This will bring improved cash flow projections, and business plans. Construction supervision is particular- quality? standards of living and better quality Numbers, everywhere in the world, are ly important to keep quality standards YY: The government sector has certain- construction companies. If the basics very important in this regard– they are produced at previous stages. ly shifted towards quality. The gener- About are established, then there will be huge transparent and will lead investors to ask al theme is that they want to invest in Before establishing IKG Group in 2011, increases in quality in the sector. the necessary questions before investing. IIG: Did you break into this market on quality. When it comes to contractors, Al-Jebouri ran a private equity fund This has not been the case in Kurdistan your own or with a local partner? of course the contractors are builders in London, after spending several IIG: What effect has limited access to in the past. Returns seemed almost guar- YY: We have a strategic partner in at the end of the day, and they build to years in the financial sector. Between finance and insurance had on the real anteed. Now that there are far more play- About Kurdistan. When we enter new markets, what was designed. It is the responsibility 2002-2006, he served as an economic Yassin Younis has over 17 years of estate market? ers in the market, more competition, and we do so with local strategic partners– of the private developers to emphasize advisor to the Bulgarian Prime experience in the building industry. His Minister, as head of Bulgaria’s initiative MA: The fact that there is no proper more saturation, this has changed. You portfolio of work extends from the UK clients or contractors or sometimes other quality by choosing reputable design- to redevelop Iraq, and as head of mortgage market here means that a must look at what will satisfy demand to the MENA region. Prior to joining companies. In Kurdistan, we are looking ers. The private sector, in particular the Bulgaria’s Tourism Agency. He holds a large chunk of the population cannot in both current and future demand. You SSH, Yassin worked for Atkins UK as a to work with construction and develop- local developers, are moving gradually in bachelors degree in Civil Engineering afford to take advantage of new supply must look at what clients want now as design manager and with WSP UK as ment firms. There are many good devel- this direction as the market increasingly from the University of London. of real estate coming onto the market. well as 20 years from now. A Associate Director. opers, and we feel the market is in need demands quality. A 114 — Kurdistan Review Invest in Group — 115 R & C REAL ESTATE & CONSTRUCTION

Addressing New Developments Luxury Landmark

IIG: How would you define the com- near the airport. It represents an invest- IIG: There are several major new devel- pany’s goals? ment of roughly $100 million, including opment projects taking root in Erbil. DM: We have learned a lot from the the facilities. We anticipate that both the How is Arbil Mass City is unique? What market about how to design a business New Azadi project and Piroz will be fin- amenities will it offer? The first zone of that works for Kurdistan—what are the ished by the end of 2017. RAH: Arbil Mass City is a large-scale lux- around 400 villas will market needs in terms of individuals ury villas project. Our goal is to make the and companies, what is available in the IIG: What green initiatives are you development a vibrant and independent be completed by the market to achieve certain qualities, and working on in Atconz’s projects? city, and a safe, comfortable environment end of 2016. Total what is available in terms of raw materi- DM: As a matter of fact, we can to raise a family. The 1457 villas will bene- als and marketing tools. We try to mold announce to IIG for the first time that fit from diverse amenities, including clin- capital expenditure for these together into one model that works. we have recently begun a project of ics, retail spaces, supermarkets, a nursery, the project will reach Our ultimate goal is to develop a pro- recycling sewage water for irrigation in restaurants, cafes, sports facilities, and Dean Michael — gram for housing in order to participate Kurdistan. We have a system of waste- Rasheed Abu Hamad — many other entertainment outlets, among over $1 billion. Chairman & CEO, Atconz Group in resolving the issue of mass housing water treatment contained within the General Manager, Trillium Holding other features. Perhaps most importantly, attract foreign and local investment across for the needy. project, and we are self-sustaining. Arbil Mass City is naturally blessed with diverse industries spanning oil and gas, Dean Michael speaks to IIG Also, we are thinking of doing more Dr. Rasheed Abu Hamad over one million square meters of hilly retail, tourism, manufacturing, and real regarding Atconz’s ambitious IIG: Can you tell us more about this green initiatives with our Piroz Hotel discusses the Arbil Mass City topography that was kept untouched by estate. We are confident that the real estate development plans in the Kurdistan initiative? project. We will probably aim to have development and the potential for our architects, which will provide each market will blossom in the medium and Region and the current business DM: Iraq needs around three million the first LEED (Leadership in Energy further growth in Kurdistan’s real villa its own charm, privacy and view. long run, despite the current challenges and regulatory environment for housing units today, and we would like to & Environmental Design) project in estate sector. facing the broader region. developers. be central to meeting that need, because Iraq—which will be a major milestone IIG: Can you give us a timeline for the we understand our locality better than in the country’s history. completion of Arbil Mass City? How IIG: As an international construction most. Ultimately, this issue requires effort much is the project projected to cost? and development firm, what expertise between the private and public sector; IIG: How does the lack of a mortgage RAH: Arbil Mass City is divided into four and value does Trillium Group bring to the two must develop, in a joint effort, system affect your business? different zones, in addition to the cen- the local market? a model to resolve this issue together. DM: This is a major problem. Imagine tral amenity area. Each zone has its own RAH: Trillium Group has left its mark in Because Kurdistan is about 20% of the that a project sells units at $800,000 completion and delivery date. We broke each market we have penetrated. We are entire Iraqi market, we are looking at the apiece. People bring $800,000 in cash ground in mid 2013, and the first zone raising quality standards in the Region by needs of something like half a million in a sack, pay it, and get a house. This of around 400 villas will be completed by using international expertise in project units here in Kurdistan. And, when we is unheard of in any international oper- the end of 2016. Total capital expenditure management, quality assurance, creative speak of affordable housing, we mean ating system. Even $100,000-$200,000 for the project will reach over $1 billion. designs, and global procurement. We are decent quality units, not cheap quality. must be financed in cash. Alternatively, perfectionists, and, as such, we do not people pre-purchase new homes, where IIG: How do you foresee the real estate compromise on quality. Our standards IIG: How are some of the key projects the developer takes a deposit of 20%, market in Erbil and Kurdistan devel- cascade from the very top to the smallest On Piroz, we signed at Atconz Group like New Azadi and then 10% every six months and so on, oping over the medium and long term? element of our project. Our management Piroz developing right now? and delivers the house after 4-5 years. As RAH: With the ongoing political and philosophy is to employ international an agreement with DM: With New Azadi, we have handed a result of this, we have so far seen build- economical challenges in much of the specialists at the leadership level, while Starwood International over phase two and there is one phase ing, but we have not seen development. MENA region and specifically in Iraq, extensively sourcing and training local to go. We delivered almost 600 units Because of scarcity and the cash econ- the emerging economy of Kurdistan employees to become core members of for a four star chain to of housing. The New Azadi project is a omy, there is no freedom to put quality is attracting increasing attention from our team. Adding value to the Kurdish be built in a location dynamic process. When we started four into buildings. People accept low quality, the international business community. community at large is key to the long- years ago, it was a $100 million project. because they cannot finance higher qual- The Region’s stability makes it an attractive term success of our group. Additionally, we have near the It has since expanded, largely because of ity. Investors and contactors cut corners About base for business, and Erbil is the epicenter while Trillium is currently focused on Rasheed Abu Hamad has more than the dynamic change in the market. This for the lowest cost. There are no prop- of such interest. We believe that Erbil is the the real estate market, it is part of a larg- airport. It represents an 20 years experience in Real Estate has altered the phases, and the project is er feasibility or financing processes, and Development, General Contracting, next regional destination. This is not just er group that has affiliations with other investment of roughly now more than double. the results are stunted in terms of quality. and Oil & Gas trading services a personal opinion, but the result of many sectors, including energy services. Our $100 million, including On Piroz, we signed an agreement There is a fertile market for higher quality throughout the MENA region. He studies, reports, and research conducted board’s vision is to expand and diversify with Starwood International for a four development once we have mortgaging holds a PhD in Management and an by our international consultants. This city our presence to take an active part in the the facilities. star chain to be built in a location we have and banking involved, we hope. A M.A. in Civil Engineering. has all necessary strategic ingredients to broad growth of Kurdistan. A 116 — Kurdistan Review Invest in Group — 117 ICT THE REVIEW ICT SECTOR AT A GLANCE

3 Mobile Operators

Mobile 1090% +90O Penetration

3G Data Service

10% 2013 91+9O Internet Penetration 5050% +50O2018

Landline 928% +8O Penetration

Sector 7030% +30O Growth Stepping Forward

Annual Growth Kurdistan’s ICT sector started from almost nothing 5% Internet in 2005 and has since become one of the Region’s 95+5O Penetration most well developed and strategically important sectors. While challenges persist, Kurdistan’s ICT sector showed continuing signs of increasing Top Level Domain: .krd maturity and development in 2014.

Invest in Group — 119 ICT ICT Did you know? While the many advances in the Kurdistan Region’s ICT sector are to be commended, there are still gaps in the market—and still much room for investment in the sector’s continued growth.

The Kurdistan Region’s ICT sector had of 3G and 4G/LTE wireless technologies a good year in 2014. Given its strategic by major mobile operators, as well as local importance and relevance to the rest ISPs. Internet penetration, while grow- Internet penetration of the Region’s economy, security, and ing quickly, is still quite low by interna- rates have been climbing politics, it is important that the sector’s tional and regional standards. Within growth and development have been the finance sector, banks and financial steeply, with major strong. Internet penetration rates have institutions are not sufficiently integrat- growth in local Internet been climbing steeply, with major growth ed technologically to provide interbank services providers (ISPs). in local Internet services providers (ISPs). lending or ATM services—to the det- Mobile penetration rates– already rela- riment of both banks and consumers. Mobile penetration tively high at roughly 93% within the Finally, despite the efforts of very effec- rates—already relatively Kurdistan Region– are continuing to rise. tive training centers and heavy invest- high at roughly 93% Meanwhile, major ICT hardware manu- ment from both the public and private facturers are working their way into the sector in the Kurdistan Region’s human within the Kurdistan market, often through local distributors capital, the level of technological literacy Region—are continuing and partners. among much of the Region’s workforce to rise. The public sector is quickly developing is still relatively underdeveloped. While its own hardware to make the KRG work the many advances in the Region’s ICT more effectively and efficiently. However, sector are to be commended, there are while there is much to be pleased about still gaps in the market and there remains in the sector, there are still challenges. much room for investment in the sector’s Regulatory hurdles are slowing the rollout continued growth. FastLink is Annual growth in Kurdistan’s leader in %5 Internet penetration 4G 4G/LTE technology. Internet provision: Wired or Wireless The provision of Internet services in Within Erbil and Duhok, Newroz (both of which operate cables into Iran) market is not very competitive…fees are through 4G/LTE networks, is the Region’s Kurdistan started from a low baseline– Telecom is the central player in Internet as well as Newroz Telecom to distribute significantly higher than in Europe or the technological leader in this field. As While service and pricing the first international cables to bring data services provision thanks to its control Internet bandwidth in the governorate. US, which have much more developed regulators in both the federal govern- in and out of Kurdistan were only estab- of Kurdistan’s only fiber optic cables into By teaming with KurdTel, the operator of and liberal markets for these services.” ment’s Communications and Media for international data lished in 2007-2008 by Newroz Telecom. Turkey. The company was also the first landlines (which are still primarily stan- Deregulation in the international data Commission (CMC) and the KRG’s have greatly improved Since then, however, distribution and to bring fiber-to-the-curb (FTTC) tech- dard copper cables) in Slemani, GoranNet market may improve this situation. Ministry of Telecommunications (MOT) in recent years, “thus penetration have grown quickly. While nologies to businesses and residences in is working to develop an extensive fiber Additionally, expansion of wireless reduce the regulatory burden and issue there are still only three international fiber Kurdistan. Newroz Telecom's growth optic cable network in the city and hopes networks could allow for much faster licenses for more ISPs to employ fast new far the market is not optic operators carrying data to Kurdistan and investment have brought Internet to make fiber-to-the-home (FTTH) and increases in Internet penetration and wireless technologies, though, it is likely very competitive… fees (one through Turkey, two through Iran), connectivity to hundreds of thousands fiber-to-the-business (FTTB) infrastruc- much faster rates than would be possi- that the Region’s major ISPs will be quick are significantly higher investment in ICT infrastructure has of homes and businesses since its estab- ture widespread there, drastically increas- ble with the development of hardwired to follow. expanded the availability of services while lishment in 2005. More recently, the com- ing Internet speeds. infrastructure. While major mobile Some companies are already using than in Europe or the allowing Kurdistan to leap past traditional pany has begun aggressively pursuing Despite this progress, there is signifi- operators provide relatively slow GSM wireless technologies in innovative US, which have much stages of development followed by other wireless technologies, particularly 4G/ cant opportunity for further investment Internet to smartphone users, the use of ways. TarinNet, an ISP and ICT firm more developed and countries. While landlines have stagnated LTE services through FastLink, its sister in Kurdistan’s Internet services sector. the latest technologies in wireless data that provides the KRG with much of in Kurdistan for decades, leaving many company. Such technologies promise to Despite the currently low rate of Internet transmission, including 4G/LTE, is begin- its Internet coverage, uses a point-to- liberal markets for these without traditional phone services, new bring high speed broadband to more sub- penetration, Kurdistan’s international fiber ning to bring fast wireless Internet ser- point network of towers to distribute services.” companies are jumping ahead to develop scribers within cities, but also to smaller connections are becoming a bottleneck. vices to computer users that have limited data around Kurdistan using WiMAX fiber optic cable networks in their place. villages not previously served by ISPs. According to Aram Daro Noori, General access to hardwired options. FastLink, a technology. This allows high volumes of Fast data networks such as these not only GoranNet, a Faruk Group company, is Director of GoranNet, while service and company that uses small mobile devic- data to travel long distances without the provide fast Internet, but also VOIP phone the leading ISP in Slemani. The compa- pricing for international data have greatly es to connect computers, smartphones, expense or hassle of wired options or 4G/ and digital services and broadband TV. ny works with IQ Networks and Al Sard improved in recent years, “thus far, the and tablets to the Internet in Kurdistan LTE technology.

120 — Kurdistan Review Invest in Group — 121 ICT ICT

Mobile Operators Hardware & Infrastructure, Public & Private The Kurdistan Region’s mobile phone auctioned licenses to these three opera- more, suggesting that there is still ample The Kurdistan Region’s ICT system is, like The public sector carried out the larg- While budgetary constraints may delay operators are by far the biggest actors in tors. While there has been talk of the issu- room for growth in Kurdistan’s mobile all others, based on a foundation of hard- est ICT projects of 2014. The Department the project, its magnitude is bound to Iraq’s mobile sector. Asiacell, a Slemani- ance of a fourth mobile operator license market. Much of the future growth in ware and infrastructure. Firms such as of Information Technology (DIT) is over- make waves in the Region’s ICT sector based mobile operator (and Faruk by the CMC in recent years, little seems the Region's mobile sector, though, will Lebanon-based IT company CIS, as well as seeing the development of an intranet, and the whole of Kurdistan’s public sec- Group company) is the largest publicly to have come of it. come from deepening the services it pro- the aforementioned TarinNet, are quick- connecting all branches of the KRG. tor, as previously cumbersome processes traded Iraqi company, val- vides through mobile data ly importing cutting edge network and Under the plan, all KRG data would are streamlined. This will also create a ued at roughly $5 billion. provision and smartphone computing equipment through partner- be stored in a single, enormous data significant amount of work for foreign Zain Iraq, based in Baghdad The KRG's DIT spent the initial part of use. Only a small percentage ships with global leaders in the sector such center based in the Kurdistan Region. and local actors in the private sector. but with operations in the 2014 conducting research on what IT of the Region’s population is as Cisco, Microsoft, Alcatel-Lucent, and According to Hiwa Afandi, director of While the DIT is developing sensi- Kurdistan Region, has even skills are most in need of attention and estimated to use smartphones others. Such hardware is used across all the DIT, the project will bring major effi- tive and secure IT infrastructure itself, more subscribers through- with data plans, although sectors in the Region’s economy, enabling ciency gains to the Region’s public sector much of the Department’s work will rely out the country than Asiacell training in the public sector, and are trends in the sector suggest everything from inter-bank connectivity by centralizing many of the processes heavily on the private sector for consult- and is expected to list on the in early stages of rolling out training that this number is likely to to the development of private data centers and procedures that each agency cur- ing, advising, project outsourcing, and Iraq Stock Exchange soon. programs. As part of this process, the quickly grow. The Region’s for the Region’s largest companies. rently must undertake independently. equipment. Korek Telecom, based in mobile operators are currently Erbil, is smaller than the oth- department is also establishing an restricted to the provision of er two, but growing faster. internationally recognized certificate slow GSM data services, but Enabling the End User International telecommuni- center to increase the technological the CMC plans to auction While much of the Kurdistan Region’s writes bespoke software and creates pro- bringing cutting edge technologies and cations providers have taken licenses for 3G services to workforce has a basic command of com- grams that use the Kurdish language, while connectivity to the Region in addition notice of the potential of these literacy of employees. mobile operators soon, with puter use, employers believe that there allowing local companies to customize the to widespread employee training, the companies. Ooredoo (for- 4G/LTE licenses hopefully is still much to be desired in terms of software to suit their needs. The firm also goal of integrating IT literacy into soci- merly QTel), a Qatari telecom giant, is a The breakneck growth the sector has seen in the pipeline as well. Access to these the Region’s computer and technical lit- has a support team standing by in Erbil, ety requires public sector support and majority shareholder in Asiacell, Orange over the last decade is likely to begin lev- extremely fast wireless technologies is eracy. This is, however, quickly chang- something that many global software com- coordination. Fortunately, the KRG has (formerly France Telecom) holds a 20% eling off in coming years. The Region's predicted to encourage more mobile ing with the entrance of companies that panies could never provide in this market. made this a central focus of its policies. stake in Korek, and Zain Iraq is part of mobile penetration rate is currently esti- phone users to seek out smartphones and invest heavily in training their employ- Technological literacy, though, is According to Hiwa Afandi, KRG Director Zain Group, the MENA-focused telecom mated at 93%. Kurdistan’s neighbors in data plans, driving much of the sector's ees, public sector training initiatives, and probably most important for the future of IT, his office is working aggressively to giant based in Kuwait. The CMC has only the Gulf have rates approaching 120% or future revenue growth. independent training centers teaching growth of the ICT sector itself. Antoine educate members of the KRG’s expansive computer literacy. MSelect, an HR and Kawkabani, CEO of CIS-Iraq, a firm public sector in ICT skills and processes. recruitment firm, has recently opened that imports, installs, and maintains The DIT spent the initial part of 2014 Zain Iraq, training centers throughout the Kurdistan ICT equipment in the Kurdistan Region, conducting research on what IT skills are based in Baghdad Region. According to Allegra Klein, the considers the creation in Kurdistan of an most in need of attention and training but with operations centers' director, intermediate computing “IT-enabled society” to be essential not in the public sector. They are now in the in the Kurdistan Region, is one of the most in-demand courses that just for further growth in his sector, but early stages of rolling out new training has even more subscribers MSelect offers. There is reportedly still also for the development of Kurdish soci- programs. As part of this process, the throughout the country than much room for investment in the ICT ety and the economy more broadly. As department is also establishing an inter- Asiacell and is expected Mobile training sector, however. According to an employer that heavily invests in the nationally recognized certificate center to list on the Iraq Stock Godar Ibrahim, CEO of Awrosoft, “for capacities of his local workforce, he is per- to increase the technological literacy of Exchange soon. Operators both government and the broader popu- sonally pushing society in this direction. government employees. lation, there is a major gap in basic skills, He believes that more can be done, how- While much has been accomplished which presents opportunities for compa- ever. “Developing technical capacity in in terms of educating Kurdish society and 3 Korek nies willing to invest in training centers schools will help to mature the market in enabling Kurdistan's residents to take Telecom, based Asiacell, a and ICT-focused education.” the long term, as young students become advantage of the innovation and poten- in Erbil, is smaller Slemani-based Some firms are addressing this gap increasingly acquainted with, and inter- tial offered by the Region’s ICT sector, than the other two, mobile operator (and through the development of custom soft- ested in, technology and computing,” he full technological literacy will take time but growing Faruk Holding company) ware that is tailored to the needs of the told IIG. “A broad ICT system cannot be to develop. According to Kawkabani, “it faster. is the largest publicly traded Iraqi company, Kurdish workforce, providing local IT successful without educating students in takes an interested and engaged new gen- valued at roughly support to assist with any challenges end IT, and this must begin at a young age.” eration before the market for ICT can $5B. users might face. Awrosoft, for example, While the private sector is quickly truly mature.”A 122 — Kurdistan Review Invest in Group — 123 ICT ICT

1. The KRG is one of the first Mid-East governments to use Google Apps 2. Teams from Microsoft are training KRG entities Investing in the Future

IIG: What are the DIT's key projects? IIG: Are you cooperating with any other HA: The most important infrastructure countries to enhance the project? components for government are data HA: When we talk about IT, we are centers and inter-governmental access talking about a science that is indepen- networks. So, the two main projects that dent of geographical location or ven- 1 we are focusing on right now are, first, dors. It is a question of where in the the KRG's data center, which is current- world we find successful implementa- ly being commissioned. The designs for tion. We find a lot of successfully exe- Our Department will the access networks are also ready, and cuted IT and ICT projects in Dubai, and identify and develop the project is currently being commis- that is inspirational. In addition, the cul- sioned. We will have both the data cen- tural and social structure of the UAE critical ICT infrastruc- ter and access network ready in March is similar to that of Kurdistan in terms ture in the Region. We Hiwa Afandi — 2015. The access network will connect all of business environment and society. Head of the KRG Department of IT of the governmental entities, including all Like the UAE, we do not have sufficient also envision ourselves (DIT) ministries and departments, to each other expertise in Kurdistan to accomplish playing a central role and to the data center. The data center will everything ourselves. Smart outsourc- Hiwa Afandi describes the role of host critical data, critical servers, and will ing means being aware of what can be in developing an IT the Department of Information deliver e-services. At the same time, we outsourced and what is the core busi- framework for the gov- Technology (DIT) in building the are building an internationally recognized ness that benefits the country as a whole. Kurdistan Region’s IT and ICT testing center so the people of Kurdistan This is inspirational for us. We frequent- ernment and foreign infrastructure and discusses the can become certified in different fields, ly visit the country for CIO summits companies that enter opportunities for investors in the focusing on IT. We are also rebuilding our and maintain close relationships with sector. IT academy to facilitate training courses important private sector CIOs and gov- 2 the Region's IT market. for government employees. ernment leaders. Of course, we must take our own characteristics in terms of IIG: Can you tell us about the KRG data culture, landscape, and geography into IIG: Can you offer any success stories introduce LTE, for instance. This was the center you are building? account as well. from private companies in the Region? result of wise decisions to benefit from the HA: We are working with experts inside HA: The new KRG employees ID card know-how available from experts outside and outside of the country. We are benefit- IIG: How does the DIT promote private project, which is a joint venture between of the Kurdistan Region. ing from the previous experiences of other investment in the ICT sector? the KRG's DIT and AWRO Group, is a countries, specifically the UAE. We are HA: We believe that private-public successful example being carried out as IIG: What targets has the DIT set for learning from their mistakes and adapting partnership in IT and the ICT sector is we speak. the short term? their successes. We are building the system inevitable. No government in the world When it comes to the telecoms sec- HA: In 3-5 years, we envision that the to be a highly virtualized environment in can be successful in implementing all tor, companies such as Cisco, Huawei, Department will be one of the most which each ministry can own the infra- required IT projects on their own. This Ericsson, and others have been very suc- important entities of the government, structure as a service (IaaS), all of which simply is a huge undertaking requiring cessful in enabling our local telecoms to presiding over and governing the e-gov- DIT will be hosted in the virtualized environ- huge resources. We should be setting be operational. The telecom sector is ernment. Our Department will identify The primary objective of the DIT is to ment. This will, in turn, bring huge bene- policies, master plans, enterprise archi- not a sector where you can rely on your and develop critical ICT infrastructure in prepare government and society to About fits to the government, because none of the tecture, and frameworks for the majority own resources; it is a very internation- the Region. We also envision ourselves embrace IT as an enabling tool that Prior to becoming the Head of DIT, Hiwa governmental entities has to build their of projects, but private inclusion in our al field, where your interaction with the playing a central role in developing an is cross-functional and ubiquitous. In Afandi worked for several Departments order to do so, the DIT concentrates own data centers, which is a very expen- development is an absolute necessity. We big names is essential. In collaboration IT framework for the government and and Ministries of the KRG as Director of on capacity building, infrastructure IT. He studied at Hochschule Karlsruhe sive and complex undertaking requiring very much welcome and encourage pri- with these major companies, many local foreign companies that enter the Region's development, IT policy, and investment. Technik und Wirtschaft in Germany, highly trained staff to run and maintain. vate investment in our projects in a vari- businesses in the Region have found IT market. We will also implement The Department addressed these areas and holds an M.A. degree from the KTH In the way that ours is structured, every- ety of forms. Should companies decide significant success in the ICT sector. government-wide enterprise architec- of focus simultaneously in its quest Royal Institute of Technology in Sweden. thing is centralized with one single point to come to Kurdistan, we will offer help The Kurdistan Region was among the ture and contribute to overall capacity to create an IT-enabled society in the Afandi speaks six languages. of contact and security implementation. and guidance. few leading countries in the world to building. A Kurdistan Region. 124 — Kurdistan Review Invest in Group — 125 ICT ICT

Connecting the Region Expanding Access

IIG: In what ways is TarinNet expand- connection that all of the employees can IIG: Can you tell us about GoranNet’s operators of international cables. One ing Internet access in Kurdistan? use. This is largely why TarinNet is so progress in terms of developing is Newroz, which operates primarily in RK: Our current target markets are com- strong with business and government Slemani’s fiber optic network and FTTB Erbil and Dohuk, with some presence in panies, hotels, houses, shopping malls, clients. infrastructure? Slemani, and operates a cable connect- and restaurants. We have a point-to-point ADN: So far, GoranNet has six trial ed through Turkey. IQ Networks and system. We put access points where peo- IIG: What are your goals for 2015? projects in Slemani, most of which are Alsard Fiber, the two others, operate out ple concentrate. We have a network cov- RK: We would like to really develop our within the newer apartment complex- of Slemani and operate cables through ering Erbil, Slemani, and Duhok. We do fiber optic networks for our major cus- es that have been built around the city. Iran. not place limits on data use, and we are tomers. We will bring fiber-to-the-build- We have deployed fiber-to-the-home quite affordable. ing (FTTB) to more customers, which (FTTH), fiber-to-the-building (FTTB), IIG: What are your growth targets? will speed up connections considerably. and VDSL in these building complex- ADN: In terms of growth of subscribers IIG: Where do you see opportunities in Second, we would like to open a new es. We have been pursuing this project to GoranNet, we are seeing very quick Rebaz Kawa — the IT sector in Kurdistan? department specifically for network- Aram Daro Noori — alongside the local hardwired telephone growth. In 2012, our growth rates were CEO, TarinNet RK: Kurdistan's IT market is new. We do ing, covering both intranet and Internet. General Director, GoranNet network operator, KurdTel, as they have somewhere around 15-20%. However, not have professional, integrated com- Developing this department will take the license to operate and install fiber-op- since 2013, we have seen an increase of Rebaz Kawa discusses the panies to provide all services within the two years. There currently no compa- Aram Daro Noori provides tic networks in Slemani. We are current- 100-110%, and we expect growth at these trajectory of Kurdistan’s ICT sector sector. There is certainly space for these nies that focus exclusively on network- insight into GoranNet's plans to ly in the process of establishing a joint rates to continue for some time. and the steps that TarinNet is taking companies. However, until now, the com- ing, which represents a major gap in this enhance fiber optic and wireless venture between the two companies, to realize the sector’s potential. panies that come here tend to do poor market. Third, we would like to connect communications networks in the GoranNet and KurdTel. IIG: As an ISP, how would you charac- work and do not maintain a permanent all of TarinNet's towers with fiber optic. Kurdistan Region. terize the regulatory environment of presence. In networking especially, there Currently, they are connected through IIG: Can you tell us about the specifics the ICT sector, broadly? are very few companies in Kurdistan that microwaves, but cable will speed up the of this project? ADN: Much could be done to improve can effectively develop fiber networks in connections, providing better service to ADN: We plan for FTTH deployment the market and the overall system. We new buildings. For Internet and ISPs, the our customers. This will help in renew- in Slemani to be a five-year project. We have seen consistent improvements over market is already fairly saturated. Between ing all of my contracts with businesses plan to install roughly 50,000 FTTH the past two years. However, there is still TarinNet, Newroz Telecom, GoranNet, and the government. I would also like to fiber optic connections in three phases. a lot to be done, especially in terms of and others, there is less space within the run fiber cables to all of the government The first phase will be in parts of the city opening the market for an increasing market for Internet provision. However, ministries. where KurdTel does not have any pres- number of fiber operators and issuing we do need other services: IPTV, VOIP, ence yet. We will then move into the new- licenses for more cables into Turkey networking, intranet, data sharing, file IIG: Regarding networking investment, er neighborhoods built around the city. and Iran. Additionally, I believe that sharing between companies or govern- are you looking to go into partnerships Finally, we will build the network within the local government could open new ment branches or banks, web hosting, with foreign companies, or do you plan the boundaries of the city itself. Over five spectrums, particularly in the digital server hosting, and others. to work individually? years, depending on the exact technology dividend ranges, as television channels RK: We currently have a partnership and vendors we use, capital expenditure are going digital, opening addition- IIG: Are you planning to invest in 4G/ with B2MB, which is an affiliate of Cisco. on the project is expected to be between al space at lower frequencies. The 700 LTE wireless technologies, like some However, the company I would like to $25-50 million. MHz range, for example, could be very others seem to be doing? create would be much broader than what useful for LTE, both for operators and RK: Deploying 4G would require over Cisco currently offers. Finding compe- IIG: International cables seem to be a consumers. Deployment would be much $100 million to cover all of Kurdistan. tent companies in this market is, unfor- bottleneck in terms of bringing data in cheaper because the penetration of low- TarinNet We have a license to provide 4G, but use tunately, a challenge as well—you must and out of the country. Are there any er frequencies is much better than that Founded in 2005, TarinNet is one of it for WiMAX instead. Since Newroz really be able to judge the competence of plans for new cables into Turkey or of higher frequencies. Additionally, the the Kurdistan Region’s largest Internet Telecom has already begun providing companies before you go into business Iran? MOT could open new frequencies for service providers, as well as a central it, it is too late for us to invest enough to with them. Not everyone wants to come ADN: The market is not very competi- operators, which would create a health- player in fiber optic and wireless compete with them. Instead, we would here, and many that do will inflate their tive. The services that are provided by the ier market overall—both for operators network development, hardware like to improve our business through capabilities beyond what they are actu- About operators of the cables have improved and consumers. Unfortunately these distribution, web design, web hosting, point-to-point connections to business- ally capable of. It becomes challenging Aram Daro Noori has been General drastically over the past year, and the reforms are moving slowly. The dig- and commercial IT support. A Ster Director of GoranNet since 2005, es and homes. 4G is better for person- to find out which companies really do prices have dropped. However, fees are ital dividend ranges are occupied by Group company, TarinNet covers all initially joining the company in 2004 as of Kurdistan. The company serves al and home users, but less useful for come with expertise and professional- Co-Technical Manager. Aram holds an significantly higher than in Europe or the TV stations, and it is difficult to ensure over 1,000 business customers, business users. If you are a big company, ism. To some degree, this is also related undergraduate degree in Computers US, which have much more developed that these stations switch fully to digital over 150,000 home users, and all you probably do not want to provide to the nascent nature of this market; lots and Statistics from the University of and liberal markets for these services. broadcasting. However, it is very doable, government offices and employees in all of your employees with FastLink; of new companies come here, and the Sulaimani, as well as an MBA from the The Ministry of Telecommunications and something that the government can Erbil, Duhok, and Kirkuk. it is much easier to buy a fast Internet poor ones have not yet left. A American University of Iraq, Sulaimani. (MOT) currently has three licensed and should make progress on. A 126 — Kurdistan Review Invest in Group — 127 ICT ICT

Building an IT-Enabled Society Local Knowledge, Local Applications

IIG: How would you characterize CIS’s ICT infrastructure takes time and invest- IIG: How do you see the growth of the processes. Once this is completed, the strategy in the Kurdistan Region? ment. It takes an interested and engaged ICT sector in Kurdistan? KRG will be able to provide an increas- AK: When we initially penetrated this new generation before the market for ICT GJI: The penetration rates for mobile ing number of e-services to its citizens. market in 2012, we focused on major can truly mature. phones in Kurdistan are quickly closing in We have two recent success stories in accounts and large companies to devel- on 100%, and Internet is around 10%, but this regard: the EIA and the Ministry of op a foothold in the Kurdistan Region IIG: What role does CIS play in it is growing very quickly. It should reach Planning, which will serve as a model and the whole of Iraq. This has led to improving the Kurdistan Region’s ICT 50% by the end of 2015. We are expecting for future projects in other ministries. our involvement in major projects. For infrastructure? that the market for software and ICT in We provide these ministries with ful- example, we are currently partnering AK: CIS is attempting to initiate the pro- the future will be very high. We believe ly integrated packages that streamline with Falcon Group to establish the larg- cess by holding events that bring people that e-services will be a major source of everything from HR to security. Within est datacenter in the Region at Empire together to find solutions for broad prob- growth. This is why we believe in Core e-government, two major new initiatives World, at a cost of $3 million. However, lems. We have sector-related events that Banking and e-Payment solutions, and that we are working on are e-health and Antoine Kawkabani — now that we have established ourselves, include major IT companies as well as Godar J. Ibrahim — e-services in general. e-education. General Manager, CIS Iraq for 2014 CIS will target small to medi- solution-based events, where we convene CEO, Awrosoft um-sized enterprises (SMEs), which we policymakers, businesses, and IT compa- IIG: In what ways does Awrosoft work IIG: What private sector initiatives do Antoine Kawkabani discusses define as companies of fewer than 50 nies to discuss possible solutions to large- Godar J. Ibrahim speaks to IIG with the KRG to develop public sector you have in the pipeline? the maturation of the ICT market employees. scale problems. CIS’s breadth positions regarding the current opportunities projects? GJI: We currently have a major project in the Kurdistan Region and the us to bring people together to solve these and challenges facing Kurdistan’s GJI: Our vision is to work on digitizing with Newroz Telecom's ADSL system. role that CIS Iraq is playing in the IIG: What opportunities do you see in problems. While the problems of ICT ICT sector, the huge potential in Kurdistan. Central to this is the devel- Based on this, we are hoping to pro- development process. the ICT sector in the Kurdistan Region? infrastructure development can seem several ICT-related fields, and the opment of smart cities and e-govern- vide more telecom solutions in 2015. AK: We believe that there is huge poten- complex, our partners and subsidiaries potentially revolutionary shifts that ment. We have prepared a technical Additionally, we are working in collabo- tial in the market. We have found that bring a wide range of expertise to the e-government and e-services could team to directly address e-government ration with other companies to improve there is a significant market in the hotel table and can deliver integrated solutions. produce in Kurdistan’s government, and have developed integrated solutions, aspects of Kurdistan's financial sector. We industry, in multinationals that are economy, and society. including document management, corre- are currently working on developing new IIG: What specific services do your local spondence, archiving, HR, payroll, atten- e-payments solutions. In 2015, we hope With improved cooperation clients demand? dance, and accounting systems. Recent to have a credit and e-payments system AK: Our solutions department provides public-private IT projects that we have up and running. There is a lot of space for between the public sector our clients engaged and around the clock participated in have been hugely success- foreign expertise to develop banking ICT and local private sector partners, servicing of their equipment. Companies ful and powerful demonstrations of how infrastructure in Kurdistan. sign Service Level Agreements (SLAs) the private and public sectors can coop- as well as major IT vendors, with us, which guarantee next-day ser- erate in a way that creates very successful IIG: What major new steps could be solutions could be easily reached... vicing of equipment that we install. For outcomes. taken to bring ICT in Kurdistan to the critical IT infrastructure, such as equip- next level? The potential is truly enormous ment for security companies, Internet IIG: What are Awrosoft's key public GJI: A dream for me personally, and and could be realized easily if a service providers, mobile providers, and sector projects for 2015? a vision for the company overall, is to financial institutions, we offer 24/7 ser- About GJI: Currently, we are working on an establish a Science and Technology coordinated strategy is developed. vicing so that, if there is a malfunction, it Godar J. Ibrahim has over 10 years IT project with the KRG to create a Park (STP) in Kurdistan. After looking will be repaired immediately. These ser- of working experience in different KRG Employee ID system. This will at how ICT systems in developed coun- expanding into the Region, as well as in vices are incredibly important in some Telecom, IT, and computing sectors. be a major milestone on the path to tries operate, it has become clear that About education. We are particularly excited cases, as malfunctioning servers can cause Godar worked at Korek Telecom as e-government. Based on this, major developed countries invest heavily in Antoine Kawkabani has spent over 30 to develop IT systems for universities enormous losses to companies, security Data Service Director and Technical new services will be developed in HR, R&D. In Kurdistan, there are no active years with CIS, becoming Director of CIS Board Member, and at 7Netlayers and schools. We believe that developing issues, or other major problems. To ensure eHealth, security, and others. So, many R&D centers, especially in IT. We hope Iraq in 2012 after spending over 20 years (Wego) as Technical Manager and overseeing CIS’s Middle East operations. technical capacity in schools will help that we have capacity to provide these General Manager. He is the designer of our projects for the coming year will to establish an STP where several sci- Kawkabani holds a Bachelor’s degree to mature the market in the long term, services, we maintain stock and spare and developer of the first trilingual be based on our ID system. Secondly, ence and technology-inclined sectors from Beirut University College, and is as young students become increasingly parts for our equipment in the Region, (English-Kurdish-Arabic) dictionary in we have implemented a document and companies can work together to heavily involved in professional comput- acquainted with, and interested in, tech- and always ensure the availability of our Kurdistan, AwroDic. He teaches at the management system, which is central build and develop new ideas. ing and IT organizations in Lebanon. A nology and computing. technicians. A University of Salahaddin. to the automation of the KRG's internal 128 — Kurdistan Review Invest in Group — 129 TRANSPORT THE REVIEW Transport

SECTOR AT A GLANCE

2 International Airports

14,841 KM Road Network

4.5 Million Airport Capacity Planning to Expand The Kurdistan Region has plans to become an integral part of a much larger regional road and air 5.2 billion network. Investment needed $ through 2020 he Kurdistan Region's road and At present, there are a total of 14,841 air transportation networks are kilometers of roads in operation in the Tfundamentally important in Kurdistan Region. The KRG Ministry efforts to facilitate economic develop- of Planning (MOP) has evidently rec- 1.2 Million (2013) ment. Moreover, with trade between the ognized the economic importance of an Passengers at EIA Kurdistan Region and Turkey, Iran, and efficient and modern road network, and the rest of Iraq rising exponentially year- has targeted an increase in total available on-year, the local transportation network roads to 45,000 kilometers, as well as the will continue to play a critical role in sus- construction of new bridges and tunnels. taining growth. The ongoing construction along the route 15% Annual As such, a primary task facing the KRG connecting Erbil and the Haji Omaran Growth is the modernization, refurbishment, and border crossing serves as a good example 85+15O expansion of the current road system to of this emphasis. This work will expand ensure the timely delivery of goods and the critical road into a dual carriageway, services. The expanded passenger and and will utilize both tunnels and bridg- freight services on offer from the Region’s es to dramatically reduce driving time 27 Airlines two airports have also helped to further between the capital city and a critical Fly to Kurdistan enhance Kurdistan’s reputation as both a cross-border point. Similarly, the MOP viable and vital hub for international trans- has prioritized the construction of three portation. Moreover, with the proposed highways to connect the cities of Duhok, development of international rail systems, Erbil, and Slemani with each other, as well localized tram networks, and modern as countries neighboring the Region. The public transport, the sector remains a completion of these projects in a timely potential bright spot in the burgeoning and efficient manner will require an out- marketplace of the Kurdistan Region. lay of approximately $1.1 billion.

Invest in Group — 131 T TRANSPORT

KRG Deputy Prime Minister Qubad Talabani inaugurated the Cargo Village at Slemani International Airport in November 2014.

THE ROAD SYSTEM IN THE KURDISTAN REGION Slemani Erbil Duhok 5,673 km 5,391 km 3,777 km

Private Transportation Border Crossings The rapid development of the economy Kurdistan borders Syria to the west and such, wait times at Ibrahim Khalil can be Strategic Significance of has helped facilitate a booming person- has historically had one available border in the range of 2-3 days for trucks enter- Air Transportation al transportation market. The number crossing station located at the tri-bor- ing the Kurdistan Region and 6-7 days Kurdistan’s airports have played and will Middle East, or Asia for two years in a row. its history. The airport connects the of vehicles utilizing Kurdistan’s roads der area between Turkey, Syria, and for those exiting into Turkey. There are continue to play an essential role in its While EIA has earned itself a strong Kurdistan Region to 15 airports in 12 now exceeds 1 million, and that figure the Kurdistan Region. This location, four official border-crossing locations economic development. The geographic reputation internationally, the individ- countries and is served by 11 different is expected to increase in the coming also known as the Fishkhabour Border between the Kurdistan Region and Iran: location of the Kurdistan Region makes it ual services offered at the facility have airlines. Slemani Cargo Village was also years. Indeed, global brands such as Ford, Crossing, has been dramatically impacted Haji Omaran connects to Piranshahr in an ideal transportation hub and a gateway also developed transportation in the inaugurated at SIA in November 2014. Toyota, and Hyundai have all established by the instability in Syria and operates Iran, Penjwin connects to Bashmakh, to both greater Iraq and the Middle East Kurdistan Region as a whole. Dnata, one At the moment, AzmarAir is building significant footprints in the Region, as only infrequently, if at all. By contrast, the Parviz-Khan connects to Qasr-e Shirin, in general. As such, Erbil International of the world’s largest air services provid- Iraq’s first specialized cargo airport at have luxury names like Land Rover, Ibrahim Khalil station (which connects and Qaladiza connects to Sardasht. All Airport (EIA) and Slemani International ers, has been active on the ground at the SIA. The airport is planned to be Iraq’s Mercedes, Jaguar, and BMW. Luxury Turkey and the Kurdistan Region) is per- four checkpoints operate regularly and Airport (SIA) continue to see both pas- airport since March 2010 and has helped largest and will take a minimum of four vehicle sales figures are reported to have haps the most highly trafficked point in allow for the sustained movement of senger numbers and cargo volumes develop a wide range of services and years to finish. grown by over 250% in recent years, indi- the entire region. The location serves as goods and people between the Kurdistan increase at a consistent pace. operations that includes customer, bag- Construction at Duhok International cating that the demand for quality and the only official crossing point between Region and Iran. In 2013, approximately 1.2 million gage, and ramp services, cargo handling, Airport (DIA) is ongoing, with a projected reliability remains consistent. the Region and its northern neighbor. As total passengers utilized EIA (a 26% and ground support equipment main- completion date in 2017. Located 25 kilo- increase from 2012), and 38,572 tons of tenance. Another firm, Macair Flight meters to the west of the city of Duhok, the total cargo passed through the facility (a Support, functions as the exclusive pri- facility will feature a 3,850-meter-long run- Public Transportation 40.4% increase from 2012). The airport vate flight support provider at EIA. The way and multiple taxiways. Airport offi- The availability of public transportation 19.66 traffic-related fatalities per in the Region’s largest cities in early 2011. currently connects the Region with 30 company specializes in aviation services cials aim to see 328,000 passengers, 8,700 within the Kurdistan Region is inad- 100,000 people in the Kurdistan Region, The design for the Erbil network was different cities in 18 countries. Not sur- and handling, and it was the first fixed- tons of cargo, and 3,540 aircraft move- equate. Therefore, taxis and privately a figure far higher than the US (11.0) or completed in 2012, and designs for the prisingly, 90.3% of all arrivals and depar- base operation of its kind in the Kurdistan ments at the airport in its inaugural year. owned or operated mini-buses are the the UK (3.8). Slemani and Duhok systems were final- tures at EIA were international. The most Region. Macair provides a wide range of Administrators hope to be host to 1 million most common forms of public transpor- In an effort to alleviate some of ized at the end of 2013. In addition, all frequent destinations for flights from EIA services, including handling operations, passengers, 43,000 tons of cargo, and 9,840 tation in Kurdistan. this strain, the KRG Ministry of necessary feasibility studies have been were Turkey (27.5% of all flights), the UAE cleaning, detailing, security, and fuel- aircraft movements annually by 2035. The combination of increased traffic, Transportation has plans to implement completed, meaning the projects can (16.8%), and Jordan (8.5%). In recogni- ing for aircraft, as well as baggage han- The international airport in Duhok, limited route options, and a lack of safe- a modern bus system, which will utilize now advance to the budget allocation and tion of its rising passenger numbers and dling, catering, hangar space, and aircraft an updated cargo facility at SIA, and ty regulations have led to a dramatic rise high-speed metro buses to expedite fre- formal bidding stages. The details of the high standards of customer service, the management. the already strong shipping business at in the number of traffic accidents. Most quently blocked traffic flows. individual plans indicate that the three Emerging Markets Airport Show in Abu SIA has grown at a similar pace, albeit EIA hold the possibility of making the notably, a report by the Association for To further combat the lack of public networks will have a combined length of Dhabi has voted EIA the best emerging on a smaller scale. Over the course of Kurdistan Region a cargo hub for the Safe International Road Travel (ASIRT) transportation options, the Ministry set more than 150 kilometers and will require market airport with less than five mil- 2013, the airport welcomed over 300,000 Middle East and perhaps the broader indicated that there were approximately forth plans to construct tramway systems at least $4 billion in financing. lion passengers per annum in Africa, the total passengers for the first time in international market in the long term. A 132 — Kurdistan Review Invest in Group — 133 T TRANSPORT EIA at a Glance FOCUS: MACAIR Flight Support 947,600 23 15 Total number of passengers airports countries s a commercial pilot with over As part of its efforts to redefine stan- facility with exceptionally high attention in 2012 connected connected 14,000 hours of experience fly- dards for private aircraft services, Macair to detail, good customer service, and red to EIA to EIA Aing everything from small air- has outlined ambitious plans to expand carpet treatment for all of our incoming craft to Boeing jets and an FAA-licensed operations at EIA. Most notably, the com- and departing flights.” 27,859 tons airframe and power plant technician, pany intends to construct a fixed-base Macair’s determination to grow its Total cargo tonnage in 2012 27 airlines Macair Flight Support’s CEO Dori operation that will allow Macair to offer an operations in Kurdistan is underpinned Fly to Erbil Abouzeid aims to translate his per- array of aviation services including state- by the firm’s optimism regarding the sonal exposure to the global aviation of-the-art facilities, VIP lounges, crew rest future of the private aviation sector in the 2,590 business into innovation in Kurdistan's areas, 24/7 passenger concierge services, Region. The company's leadership cites Daily Passengers 17 13 private aircraft industry. Abouzeid has aircraft fueling, light maintenance, aircraft statistics from the Middle East Business Average Average founded two successful aviation com- charters, and aircraft sales and acquisi- Aviation Association revealing a 12% cargo commercial panies in the US, including Macair Inc., tions. Macair’s planned facilities will also year-on-year increase in total flight hours flights per flights per which is headquartered in California provide hangars to protect private aircraft logged in the Region in 2013 and point to week day and offers worldwide aircraft charters, from the extreme weather of the summer the convenience, time savings, and safety sales, and management. Since Macair and winter months in Kurdistan. At the that private aviation can afford business Flight Support started operations as an moment, Macair representatives are in leaders, while highlighting Kurdistan’s geographic position as a crossroads between Europe and Asia as a fundamen- tal advantage. Kurdistan’s security also feeds into Macair executives’ confidence in the long-term potential of Kurdistan’s private aviation sector. Abouzeid praises the support of the KRG for the region- al aviation industry, stating, “The KRG and the airport management have done a fantastic job of security at the airport. We feel very confident in promoting the The KRG and the airport and the security to business air- SIA at a Glance airport management craft operators worldwide.” have done a fantastic Despite promising signs of growth in job of security at previous years, there is no denying that Departures 14 airlines the airport. We feel 2014 has been a trying year for the aviation Fly to Slemani 106 & Arrivals industry in Kurdistan. The instability and per week very confident in promoting the airport violence in areas surrounding Kurdistan have tested the market and negatively 19 airports and the security to affected traffic at EIA, although Abouzeid business aircraft predicts a more promising business connected Passengers operators worldwide.” Malmo, Istanbul, Dubai, environment in 2015. Reflecting on the Dori Abouzeid, CEO, Macair Tbilisi, Dusseldorf, Munich, 2011 developments of the last year, Abouzeid Stockholm, Amman, Antalya, highlights Macair’s success in the face of Baghdad, Basra, Batumi, 248,152 the difficulties it has encountered. “There Beirut, Cairo, Erbil, London, exclusive private flight support provid- talks with airport administrators to deter- have been numerous challenges. Through Najaf, Doha, Tehran 2012 er at Erbil International Airport (EIA) mine the best location for the new facilities it all, we have been able to raise the bar in 2011, it has raised the standards in at EIA. Abouzeid predicts groundbreaking in customer service to exceed the high- 286,000 private aircraft services in Kurdistan. To for the project sometime in the third quar- est standards,” he emphasizes. With the 12 countries Macair’s leadership, that goal relies most ter of 2015 and estimates that it will take potential for recovery in Kurdistan’s pri- heavily on one key element– the quality approximately one year to reach comple- vate aviation sector and an unprecedented connected 2013 Sweden, Turkey, UAE, Georgia, of the firm’s staff. “In order to raise the tion. Emphasizing the significance of this expansion of Macair’s operations at EIA, Germany, Jordan, Iraq, Lebanon, bar, we felt that you have to first bring in a project to Macair’s overall growth strate- 2015 may prove to be a pivotal year in the Egypt, England, Qatar, Iran 300,000 good team and continually train them to gy in Kurdistan, Abouzeid explains, “We company's quest to build the best aviation make them better,” says Abouzeid. would be offering a full-service aviation services company in the region.A 134 — Kurdistan Review Invest in Group — 135 T TRANSPORT

Growing Rapidly The Hub IIG: Could you brief our readers about Azmar Air and its key projects? IIG: EIA has expanded significantly in and positions Erbil as not just a local BST: Azmar Air was established in capacity since dnata started operations airport, but as a larger regional hub. 2005. We are the fifteenth company in The new airport in there in 2010. How has dnata dealt with Establishing Erbil as a regional hub will the Middle East to have the International Slemani will be the this rapid expansion? have a considerable impact on the eco- Air Transport Association’s Safety Audit OM: Dnata has invested significantly in nomic development of the city of Erbil for Ground Operations certificate. We biggest one in Iraq. equipment and people over the past four and Kurdistan as a whole, generating manage ground handling, cargo, fuel, and It will be built at the years. We bring considerable expertise to income and creating jobs. catering services at Slemani International Erbil and believe we have supported the Airport (SIA). Azmar Air has been grow- same airport, with growth of EIA as a strong partner. We IIG: Do you have any concerns in terms ing 20% each year. We have about 600 the same runway and also believe that our customers know that of infrastructure being able to keep pace staff now. they are in good hands with dnata and with the expected growth? Baker Saeed Taufiq — We are also the first company in Iraq taxiway. We will be trust that we will deliver on our promises. OM: Infrastructure at EIA is continually General Manager, Azmar Air to have a private airport, and we are now closing the old terminal Oliver Mathwich — being challenged due to the rapid growth, building Iraq’s first specialized cargo Business Development Manager, dnata IIG: How can the Kurdistan Region which makes it challenging to achieve all Baker Saeed Taufiq speaks with airport in Slemani, which we will own and building a new one enhance its position as a hub for pas- our goals. The airport and dnata need to IIG about Azmar Air’s expanding completely. The new airport in Slemani with a hotel. Oliver Mathwich discusses senger traffic and cargo transshipment? act quickly and work together if we are to ground handling operations in will be the biggest one in Iraq. It will be dnata’s role in transforming Erbil OM: It is critical for EIA to continue succeed. Dnata has invested considerable Kurdistan and the company’s built at the same airport, with the same International Airport (EIA) into investing in the future. International amounts in infrastructure improvements, ambitious plans to turn its runway and taxiway. We will be closing a regional hub for transport and travelers are pleasantly surprised when such as cold storage for perishables, and Slemani base into a nexus for the old terminal and building a new one aviation and discusses the airport’s they arrive at EIA for the first time—pass- we will continue investing millions of international cargo flights. with a hotel. It will take a minimum of IIG: How does the current political sit- continued importance for the port control is quick and friendly, and dollars in equipment, facilities, and per- four years to finish. We are also building uation affect the growth of the aviation economic growth of the Kurdistan their luggage is often waiting for them at sonnel each year. the Slemani Cargo Village, which will be industry in Kurdistan? Region. finished in August. BST: As you know, all permission comes from the Iraq Civil Aviation Authority in Baghdad. No airline can fly to the Kurdistan Region without the approval of the ICAA. It affects us negatively. Airlines know that we have to get that approval from the ICAA, and then they come to us. On the other hand, we have been talking with Baghdad about taking on ground handling operations at the airports in Basra and Baghdad for a year now. We won a tender over seven international competitors. Until now, our case has been stuck in the Ministry of Transportation in Baghdad because of political problems. IIG: Do you believe that Slemani can We are waiting for the situation to change. be a cargo hub? BST: Iraqi airspace is a corridor for all IIG: What do you see in the future of the the baggage carousel. However, with the IIG: What are your goals for the the flights between the West and the East. aviation industry in Kurdistan? recent growth it is important to continue medium-term? Everyday there are around 300 flights over BST: The airline business is directly con- investing in new infrastructure to meet OM: Dnata constantly explores new Iraq, so Slemani is in a good position to be nected with people’s economic situation, demands, especially the peak times. opportunities in Erbil. We have new a point of connection between the West and the economic potential and growth Cargo is an interesting situation. ideas to increase our range of services. About and East. Through our cargo company, we of Kurdistan. We believe that the aviation Erbil has become the entry point, not We are also interested in investing in Oliver Mathwich has over 20 years of can provide the facilities needed for a hub industry will improve in the Kurdistan experience in the international aviation only for Kurdistan, but for the whole airport infrastructure in conjunction that can distribute cargo from Slemani to Region if the economic situation con- and travel industry with a variety of of Iraq. I walk through our warehouse with the airport authority to build the East. The new airport will play a cru- tinues to improve here. As I mentioned, major aviation companies. Prior to and often see shipments destined for EIA’s position as a hub for years to cial role in positioning Slemani as a cargo we would like to see Kurdistan become a working for dnata, Mathwich worked for Baghdad and sometimes even as far come, supporting Kurdistan’s contin- hub for the region. This is our main plan. cargo hub for the region in the future. A Air Astana as a senior manager. as Basra. This is a great success story, ued growth. A 136 — Kurdistan Review Invest in Group — 137 AGRICULTURE & WATER

THE REVIEW Agriculture & Water

SECTORS AT A GLANCE

Contribution 9010% +10O to GDP

1.2 Billion Investment needed $ through 2020

704 Million $ Total Investment Planting the Seeds

Population The Kurdistan Region's agricultural sector is looking relies on to meet local needs and enter the export market by 9% agriculture for their harnessing investment and new technologies. 91+9O incomes hile there have been signif- see its generally plentiful water resources icant improvements in the dwindle. Despite these obstacles, domes- Wregulation and infrastructure tic agricultural production continues to 250 Million supporting the Kurdistan Region’s water increase, and new treatment and process- The KRG's subvention resources, the same cannot fully be said ing facilities are helping to modernize $ (annual) for Kurdistan’s agricultural sector, which the Region’s water supply system. These has been negatively impacted by contin- efforts are expected to go a long way ued regional instability. Conflicts in Syria towards reducing wasteful usage practices and Iraq have limited export opportuni- that have long existed in Kurdistan. The ties, reducing the appeal of this prom- political stalemate that developed over 7% workforce ising sector for potential new entrants. the first half of 2014 compounded many Meanwhile, these issues have also hin- of these issues, as there was subsequently 93+7O dered the necessary process of diversify- very limited ministerial oversight for crit- ing the sources of Kurdistan’s agricultural ical areas of resource management. The imports. Despite some progress, the water arrival of a new Minister of Agriculture in 2.8 Billion resources of the Kurdistan Region remain June and a re-dedication on the part of the Projected Investment in a precarious position. As the countries KRG to policies of conservation and local $ 2013-2020 (water) surrounding the Region look to shore production may help to restore these vital up their own domestic water supplies, industries to the significant economic role the Kurdistan Region could potentially they have historically played.

Invest in Group — 139 A & W AGRICULTURE & WATER Did you know? According to the Board of Investment, a total of 25 agriculture projects (3.61% of all projects) have now been licensed. $704 M

Investment and Impact of Governmental Ideal Setting for Farming Cheap Imports Employment Transition The unique topography of the Kurdistan Markets in the major cities of the A 2014 study conducted by Rand Continued debate over political pow- Region makes it ideally suited to the Kurdistan Region are packed with fresh Corporation found that agriculture con- er and ministerial appointments lasted development of a prominent agriculture produce, delivered daily to ensure that it tinues to account for only a small percent- $430.4 until June, and allowed for only limited industry. The gentle hills and rolling plains is of top quality. The only problem with age (6.63%) of employment throughout government involvement in the promo- are ideal for the cultivation of wheat and this is that a significant majority of these the Kurdistan Region; this represents a tion, regulation, and facilitation of the barley (the two primary grains consumed items are imported from Iran, Turkey, 0.5% decrease from the previous year. agriculture industry in 2014. The Islamic Agriculture production has million by the Region’s population). Abundant and other countries in the surround- Employment rates in the agriculture League of Kurdistan (Komal) gained six water resources also allow for vegetable ing region. The KRG has made limited increased in key areas, ranging sector were higher in Slemani (7.7%) In terms of investment capital seats in the Kurdistan Parliament in the and fruit production, although not yet on steps to implement a tariff system that from a 33% improvement in than in Duhok (7.1%) or Erbil (4.9%). by governorate, Duhok leads 2013 elections, and was also given control a massive scale. Livestock represents yet would favor local production, but the tomatoes (136,054 tons) to a 454% Despite being identified as a priority the way, increasing its share to of the Ministry of Agriculture and Water another major opportunity for the Region’s widespread availability of cheap, foreign increase in okra (34,327 tons). development area, the agriculture sector $430.4 million (about 61.4% of Resources (MOAWR). On June 18th, the burgeoning agricultural industry, as meat foodstuffs further inhibits the develop- in the Kurdistan Region has seen limit- all agriculture investment) eighth cabinet of the KRG was sworn into remains the most critical element of any ment of the Kurdish agricultural system. ed investment in the past year. Board of Erbil office, and Abdulstar Majeed (the appoin- Kurdish menu. In addition, with the influx of foreign Investment (BOI) statistics indicate that tee from Komal) was named Minister products, dietary patterns and culinary a total of 25 agriculture projects (3.61% $263.1 million of Agriculture and Water Resources. practices have changed as items that were of all projects) have now been licensed Minister Majeed will be tasked with Slemani previously unavailable have now become for a total of $704 million (1.79% of all modernizing the MOAWR, improving ubiquitous. Kurdish farmers, who have a investment). Both of these percentag- $10.6 million sector infrastructure (namely in regards Infrastructure and long-established history of growing cer- es represent decreases from the corre- to factory farming), and developing new Knowledge Lacking tain crops, are not well suited to cater to sponding figures IIG reported in its 2013 long-term plans to promote food security While the Kurdistan Region’s transporta- this rapidly evolving market. report. Agriculture projects in the Erbil Agriculture continues to account and overall self-sufficiency. tion infrastructure has improved by leaps Governorate continue to receive the larg- for only a small percentage and bounds, it is still largely ineffective at est amount of allocated land (1,023 acres) (6.63%) of employment helping connect growers in remote rural compared to Slemani (24.5 acres) and throughout the Kurdistan Region. Value of Meat Industry areas with the urban centers that require Duhok (217 acres). However, in terms Although demand for red meat con- their produce. Local farmers complain of investment capital by governorate, tinues to increase, the available local that shipping options are, at best, inef- Duhok leads the way, increasing its Employment rates in agriculture supply does not. As a result, the Illegal fective and, at worst, non-existent. The share to $430.4 million (about 61.4% of Slemani (7.7%) Trans-boundary Animal Trade (ITAT) process of carrying products to market all agriculture investment). Erbil ($263.1 Duhok (7.1%) has flourished. Instability in surround- can therefore be time consuming and million) and Slemani ($10.6 million) con- Erbil (4.9%) ing countries has allowed for an influx deleterious to the quality and condition stituted smaller percentages. of animals from as far away as India and of produce. Similarly, a lack of storage Pakistan; this reliance on cheap and ille- facilities (specifically cold storage units) Opportunities and Challenges gally imported livestock has hindered provides little incentive for farms in the Wheat and barley remain the two biggest production totals including 15,204 tons efforts to increase local red meat pro- Region to expand their output capacities. crops in the Kurdistan Region, and com- of eggplant, 12,626 tons of onion, 88,063 duction. In addition, with no way to With a limited growing season and rapid- bined constitute a significant percentage tons of watermelon, and 47,610 tons of inspect or regulate these animals, there ly changing weather patterns, farmers can of all agricultural production. However, cucumber. Meat production (specifically is also potential risk in terms of human ill-afford to miscalculate projected yields. there have been dramatic improvements red meat) has also witnessed growth, as health. Indeed, with illegal markets still in As a result, there is little to no impetus for in other target areas. A study conducted local agriculture companies have begun operation and no centralized approach in local growers to expand their operations, by the Kurdistan Region Statistics Office pursuing mother herd agreements with place to combat cheaply available import- let alone consider shifting to factory-farm (KRSO) for 2013 found that agricul- their European counterparts. Fruit pro- ed meat, risks of disease or contamination systems that would better promote tural production had increased in key duction remains a primary area of need, remain constant. Increased government regional self-sufficiency. Instead, Kurdish areas, ranging from a 33% improvement with statistics indicating that production oversight is necessary to clamp down on farmers tend to rely on historical practices in tomatoes (136,054 tons) to a 454% and infrastructure costs associated with this issue. In addition, experts predict that and situation-specific knowledge rather increase in okra (34,327 tons). Foods fruit cultivation (specifically those that increased government subsidies to those than more modern techniques and are that make up a significant portion of necessitate orchard development) serve individuals or groups targeting domestic content to remain small-scale in terms the diets of people in the Kurdistan as a deterrent to small-scale local expan- animal farming could help promote the of overall operations. Region remained strong, with final sion into the sector. growth of a critical local industry.

140 — Kurdistan Review Invest in Group — 141 A & W AGRICULTURE & WATER

WATER RESOURCES DATA Region's Needs Existing Capacity Medium Term Target (2020)

10,000 MILLION 3 3 3 22% 2,256M M 72% 15,500M M Existing Water Resources M AGRICULTURE The Kurdistan Region is home to plentiful 78+22P 28+72P water resources, most notably its numer- ous river systems. Originating in south- ern Turkey, the Great Zab River serves 1000 MILLION M3 1000M M3 1300M M3 as a major water source for the Erbil and (from surface (for an estimated DOMESTIC WATER 100% & underground 100% population of 6M Duhok Governorates, while the similarly SUPPLY sources) named Lesser Zab River originates within 100+P 100+P inhabitants) the Kurdistan Region. The Sirwan and Declining Availability Alwan Rivers pass through the autono- Changing environmental conditions The KRG Ministry of 3 3 3 mous region from their respective ori- throughout the Middle East have had 200 MILLION M 200M M 300M M Planning estimates that (from surface (according to industrial gin points in Iran, while the Tigris River an increasingly measurable impact on the INDUSTRIAL USE 100% & underground 100% development forecast) traverses the Slemani Governorate, and Kurdistan Region. Also, the lack of devel- individual water usage sources) then runs along the southwestern border opment of water resources has caused within the Kurdistan 100+P 100+P of the Erbil Governorate for a significant significant damage to the entire agricul- distance. The KRG also operates dams tural sector, especially during dry peri- Region is approximately 20 MILLION M3 at the Region’s three major lakes: Mosul, ods. Recent reports which indicated an four times higher than LIVESTOCK 3 3 Dukan, and Darbandikhan. In addition, expected increase in drought conditions the World Bank standard. 100% 20M M 100% 25M M KRG sources note that Kurdistan is home over the next 30 years caused Iranian to 5,174 natural springs (the majori- officials to begin multiple dam projects, 100+P 100+P ty of which are located in the Duhok with an eye towards redirecting bodies of Governorate). As a result of these and water within the country towards areas increasingly reliant on the groundwa- other factors, studies have indicated that that are most in need of water resources. ter reservoirs for their water needs. approximately 50% of the water in the These projects could potentially sever The Ministry of Agriculture and Water Kurdistan Region exists domestically (in strategically significant waterways that estimates that there are approximately Infrastructure Needed to contrast to an estimated 8% in the rest flow from Iran into Turkey. Although 20,000 authorized wells in use, though it Fully Address Water Concerns of Iraq). dam projects in southern Turkey have is likely that around 18,000 unauthorized To counteract certain issues relating facilities for water processing, treat- had less immediate impacts on Kurdish or illegal wells operate on a regular basis. to the excessive consumption of water, ment, and recycling. To address this Overuse Fueling Depletion water resources, no formal terms have There are over 6,000 wells (legal and ille- the General Directorate of Water and dilemma, the KRG authorized the con- The sheer number of water wells cur- been agreed that would ensure that such gal) for agricultural purposes, and over Sewerage (operating under the umbrel- struction of wastewater treatment facil- rently in use (either for personal or bodies of water remain open and avail- 500 wells for industrial purposes. la of the Ministry of Municipality and ities in multiple locales throughout the commercial use) has helped provide a able. A United Nations Development Tourism) instituted a strategic plan Region. Construction at the $113 million greater portion of the population with Program (UNDP) study noted that relating to both the increase of available Goptapa Chamchamel Water Project, readily available water. However, taxes these factors have contributed to a 20% potable water and the treatment of the located in the Slemani governorate, is Studies have indicated on water are levied based on land size decrease in available water per citi- Region’s wastewater. The plan itself calls already underway, as is work at the $96 that approximately rather than on consumption. As a result, zen. Erratic weather patterns have also for a multi-phase approach to address a million Amedy Water Project (situated 50% of the water in the the KRG Ministry of Planning estimates forced citizens of Kurdistan to become wide variety of issues that are present- in the Duhok governorate). The prima- that individual water usage within the ly placing a strain on Kurdistan’ limit- ry aims of these facilities, which both Kurdistan Region exists Kurdistan Region is approximately four Reservoir Data 59% ed resources. These solutions include have targeted completion dates of 2015, domestically (in contrast times higher than the World Bank stan- the long-promoted installation of water will be to supply their surrounding envi- to an estimated 8% in the dard. To combat this issue, the KRG has 3 meters to increase usage fees, the creation rons with potable water on a more mod- prioritized a rapid expansion of its num- 10,000 MILLION M of new laws to promote more binding ern, consistent scale. Similar projects rest of Iraq). ber of dams. The construction of the three (Existing Capacity) regulations, establishing long-term water (including the $960 million Erbil Waste major dams is expected to be completed development facilities, and (perhaps most Water Treatment Plant and Network) by 2018. With an expanded dam network, 41+59P notably) the creation of multiple water are in various stages of planning and are 16,963 MILLION M3 By 2020, capacity the government could begin shifting is planned to reach treatment plants. expected help modernize, supply, and consumption away from its dwindling (Necessary Capacity) 100% COVERAGE The Kurdistan Region at present is regulate the Region’s expanding urban groundwater resources. dramatically underserved in terms of population centers.

142 — Kurdistan Review Invest in Group — 143 A & W AGRICULTURE & WATER

FUTURE WATER PROjECTS CURRENT WATER PROjECTS ProjectCost (est.) Area & Capacity & Contract Type Construction Period Project Cost / Constractor Area & Capacity & Contract Type Construction Period

Water Treatment Plant SLEMANI Water treatment plant Capacity: 25,000 cubic meters per hour IFRAZ 4 $600 Million 2 years GOPTAPA Capacity: 6,8000 cubic meters per hour Contract Type: Design, Build, Operate $108 Million 2 Years NOKAN – SUBOR Contract Type: Design, Build, Operate Area: Northern & Eastern parts of Erbil CHAM- CHAMAL Area: Chamchamal District and 22 sub-districts Three Waste Water Treatment Plants Capacity: 300,000 cubic meters per day SLEMANI $276 Million 2-3 years CITY Contract Type: Design, Build, Operate Water Treatment Plant Area: Slemani DUHOK $96 Million Capacity: 2,400 cubic meters per hour AMEDY STEER GROUP Contract Type: Design, Build, Operate Area: 2 Years HUMAN-ARISON Amedy District, Deraluk Sub-district, Sheladze ERBIL CITY Four Waste Water Treatment Plants Sub-district and 15 villages TREATMENT $960 Million Capacity: 210,000 cubic meters per day 8-10 years PLANT & Contract Type: Design, Build, Operate NETWORK Area: Erbil Water Treatment Plant DUHOK $75 Million Capacity: 3,000 cubic meters per hour OMRAB-EVYOL- Contract Type: Design, Build, Operate Area: 2 Years AKRE HARDAM Water Treatment Plant Akre District and 17 villages $300 Million Capacity: 10,000 cubic meters per hour 2 years DOKAN 3 Contract Type: Design, Build, Operate Area: Slemani Water Treatment Plant ERbIL Capacity: 1,200 cubic meters per hour $80 Million 2 Years Water Treatment Plant BARZAN ARGE CONSTRUCTION Contract Type: Design, Build, Operate Area: 51 villages in Barzan $195 Million Capacity: 6,000 cubic meters per hour 2 years KHANAQIN Contract Type: Design, Build, Operate Area: Khanaqin City and 204 Villages Water treatment plant SLEMANI Capacity: 1,200 cubic meters per hour Water Treatment Plant 2 years DARBANDI $20 Million 1 Year $110 Million Capacity: 3,000 cubic meters per hour OHITAN COMPANY Contract Type: Plant, Design, Build HARIR Contract Type: Design, Build, Operate KHAN Area: Darbandikhan District Area: Harir City and 95 villages

Water Treatment Plant Expanding the capacity of IFRAZ-3 Capacity: 2,800 cubic meters per hour KUSHAF- water treatment plant from 6000m3/ $170 Million Contract Type: Build, Operate 2 years ERbIL & DUHOK MAKHMOOR $135 Million hr to 10,000m3/hr, and changing the old 2 Years Area: Makhmoor District, Gewer / Debaga RENOVATION STFA-CALYON-FERNAS PROjECT water networks in many quarters in both Sub-districts and 52 villages Erbil and Duhok.

Water Treatment Plant Capacity: 2,000 cubic meters per hour BARDA $80 Million 2 years RASHA Contract Type: Design, Build, Operate Halabja Water Treatment Plant Area: Barda Rash City and 100 villages SLEMANI & HALAbJA Capacity: 50,000 cubic meters per day $193 Million 2 Years RENOVATION SSANGYANG Changing the old water networks in many quarters in Slemani. Water Treatment Plant KHABAT $80 Million Capacity: 3,000 cubic meters per hour 2 years PROjECT Contract Type: Design, Build, Operate Area: Town of Khabat and surrrounding villages 144 — Kurdistan Review Invest in Group — 145 HIGHER EDUCATION THE REVIEW Higher Education

SECTOR AT A GLANCE

115,000-120,000 University Students

12,000 New students in private universities (2014)

5% Full-time Professors

Top Majors: Medicine, Engineering

12 Private Universities The Game Changer Major investments in the Kurdistan Region’s higher education system are helping to develop 13 Public Universities well-trained human capital. nstitutions of higher education in guidelines to ensure quality in higher Kurdistan are key to producing a education across the Region and teaming Inew generation of graduates that with key players in the regional economy 5,000-6,000 have the skills to harness the opportu- to ensure that new graduates have the Expected Graduates nities provided by the Region’s grow- skillset and experience to succeed in the ing economy for local benefit. Despite local workplace. the challenges of transforming a system The MoHE has also established a that has traditionally relied on rote learn- number of tertiary institutions dedicat- $668 Million ing and an instructor-centric approach, ed to technical and vocational education $ Investment innovators are introducing Western- and training (TVET). The Ministry runs style teaching methods that emphasize two-year technical institutes and four- critical thinking and give students more year technical colleges across Kurdistan freedom of choice in their academic that are managed under three polytech- pursuits. The KRG Ministry of Higher nic universities representing the Erbil, Education (MoHE) is also implementing Slemani, and Duhok governorates.

Invest in Group — 147 H E HIGHER EDUCATION Did you know? FOCUS: AUDK In 2014, the Ministry of Higher Education admitted over 36,000 new undergraduates to its 13 public The American University Duhok, Kurdistan (AUDK) opened its universities, nearly 4,000 more than the year before. doors in December 2014, bringing a focus on applied research and leadership skills to the Kurdistan Region. The university will offer undergraduate degrees in public Quality Assurance Plan policy, design and media studies, While supportive of the increasing array The quality assurance procedures for Both the public and management and finance, and of choices that the proliferation of pri- higher education outlined in the Plan computer science, taught in an vate institutions has helped create for focus on curriculum reform, increased private higher education English-language environment students, KRG education officials are autonomy for universities and technical sectors have seen rapid that emphasizes academic keen to point out that their support is institutions, programs offering staff the growth over the last two freedom for both students and dependent on those institutions meeting chance for continuous professional devel- faculty. AUDK has also established government standards in terms of quality. opment, and the promotion of research. decades, and overall research centers focused on The Ministry’s strategy is to prevent high- The strategy also establishes a system to enrollment in higher improving quality of life in the er education from becoming a commer- evaluate teaching methods, course mate- education in Kurdistan Duhok governorate. AUDK's cial product. The Ministry has weighed rials, exam design, and lecture styles in Center for Displacement and applications for new private universi- parallel with a planned accreditation stood at over 115,000 in Migration is currently working with ties against the key metrics of a Quality system to ensure that institutes, colleges, 2013. the KRG to develop strategies Assurance Plan for higher education that and universities conform to acceptable to cope with the refugee crisis it adopted in 2011, approving just 2 out academic standards. currently affecting Kurdistan. of the 18 proposals for new private uni- versities it has received since that time.

Closing the Skills Gap Authorities within the KRG have recog- Careers event, where organizers have been have been responding by putting in work nized the need to better tailor higher edu- educating job seekers on the importance placements, career planning, and out- cation in both universities and technical of internships and connecting local and reach to companies to establish a bridge institutes to the skillsets demanded by international companies interesting in with students. We are trying to change local and international firms operating in hosting interns with workers and students the culture so students see the reality of the Region. At the moment, many inter- looking to gain real world experience. things in the field.” national and local firms cannot find appli- Universities and technical institutes The KRG has also founded a Human cants with the technical backgrounds themselves often struggle with obso- Capacity Development Program that Strengthening International Ties and communication abilities necessary lete course materials and fail to provide seeks to cultivate professional skills A growing number of universities in Under the Kurdistan Rural University to fill available jobs. In its “Roadmap to opportunities for students to receive and leadership abilities among students Kurdistan are establishing connections Partnership Program (KRUPP) admin- Quality,” the Ministry acknowledged the on-the-job training or real world expe- from the Kurdistan Region by giving with their peers abroad in an effort to istered by the International Research imperative to make higher education in rience, resulting in new graduates finding them the opportunity to earn a degree expand opportunities for their students and Exchanges Board (IREX), Virginia Kurdistan more relevant and effective, themselves at a competitive disadvantage abroad. In 2014, the program gave 4,351 and benefit from international expertise. In Tech has similarly partnered with the explaining, “The higher education insti- in the labor market. This situation has of the Region’s most talented students 2014, Soran University and the University University of Halabja, the University of tutes were originally developed to suit a contributed to the growing momentum the opportunity to study abroad for the of Leicester signed a partnership agree- Zakho, and the University of Raparin country with a closed market and a peo- behind efforts to bring higher educa- 2014 academic year with the help of Enrollment in private ment to establish the International Centre to develop student-centered teaching ple with little hope of a high standard of tion and business leaders together in an government-sponsored scholarships. for Natural Resources Research at Soran’s methods that hone critical thinking living or rapid educational advancement. institutionalized way to design a modern, During the same period, 670 of those universities has campus northeast of Erbil. The center will and practical problem-solving abilities. In the new Iraq, reformation of higher continuously updated curriculum that students finished their foreign academic expanded rapidly. In concentrate primarily on sustainability in The last year also saw AUIS partner with education is now urgently required in ensures students are ready to enter the pursuits and returned to join Kurdistan’s 2014, Kurdistan’s 12 regional resource management and pro- Stanford University under the Iraq Legal order to harmonize the heretofore anti- job market when they graduate. labor force. Scholarship recipients benefit vide students the chance to do a split PhD Education Initiative (ILEI) to develop quated system to the needs of the Region Referencing these projects and the from language-skills training at centers private universities involving studies abroad at the University a course sequence in legal studies and for highly skilled professionals.” deficiencies they are trying to over- set up by the MoHE in preparation for admitted 12,000 new of Leicester and collaboration with profes- produce modern, high-quality course There is an emerging movement to come, Dr. Nawzad Kameran, a partner their studies abroad. The KRG has spent students, an increase sors there. The University of Leicester has materials on the legal systems of Iraq and connect employers with intuitions of high- at Kurdistan Careers, explained, “At over $82 million on the Human Capacity also partnered with UKH to establish an the Kurdistan Region. The Initiative’s er education across the Kurdistan Region. most universities everything is theo- Development Program, and plans to of 5,000 over the year English Language Teaching and Testing end goal is the creation of a full law pro- One such initiative is the annual Kurdistan retical. Mostly the private universities expand it in the years ahead. prior. Centre there. gram at AUIS.

148 — Kurdistan Review Invest in Group — 149 H E HIGHER EDUCATION

Training Kurdistan’s Future Leaders

IIG: What is the core mission of AUDK? manage and tackle crises. What distin- HI: AUDK pursues a long-term strate- guishes AUDK from its counterparts is gy to fulfill its mission through engag- that it offers state-of-the-art majors that ing competent faculty members as well are not delivered at any other institution as bright scholars to enhance the quality of higher education in the Region. Every of education in the Region. AUDK aims program is organized around develop- to create a peaceful environment where ment, with a clear focus on the process students and the academic communi- of implementation. AUDK held opening ceremonies on ty enjoy a sense of freedom in gaining December 01, 2014 to announce the knowledge for the betterment of society. IIG: How do you see the university first day of student registration for the By establishing research centers, AUDK expanding in the medium term? 2014-2015 academic year. endeavors to have a role in every aspect of HI: AUDK aims to become a leading Dr. Honar Issa — people’s lives and help build a healthy and institution in the Region that, as a cen- Member of the Board of Trustees dynamic community. AUDK provides ter of excellence, will conduct research American University Duhok Kurdistan students with a profoundly transforma- in various disciplines. It endeavors to (AUDK) tive experience– intellectually, socially, introduce research into the community and personally– that will prepare them we live in and get people accustomed to Dr. Honar Issa provides IIG with for a life of service and leadership. the idea that research should not only exclusive insight into AUDK’s be conducted for the sake of research, mission, the university’s expanding IIG: What educational programs will but to promote and develop the quality education strategy, and its AUDK offer? of life of a society. We plan to establish contribution to the creation of the HI: AUDK offers undergraduate cours- various centers that will offer activities next generation of leadership in the es and programs in the areas of Politics required to enhance the quality of educa- increasing. Most candidates have excellent society. Unfortunately, many education- Kurdistan Region. and Public Policy, Design and Media tion and, in return, the quality of life and academic records in reputable universi- al institutions in the Kurdistan Region Studies, Management and Finance, and wellbeing of the people in the Region. We ties around the globe. All those recruited lack comprehensive programs to create Computer Science. The master programs also plan to establish departments and at AUDK are either Americans or oth- leadership skills. They put more empha- AUDK offers will follow as soon as the required tools schools encompassing diverse disciplines er expats who have rich experiences in sis on rote memorization. The programs undergraduate courses are ready. On top of those programs, we that will respond to the demands of the academia. Duhok has an interesting and that AUDK offers will place a conscious have established the English Language market. Career-oriented programs will resilient environment, which will make and purposeful focus on selecting and and programs in the Institute (AUDK-ELI) and the Center include the College of Engineering, the it possible for academics to interact with producing the next generation of leaders. areas of Politics and for Displacement and Migration College of Medicine, and numerous other a multi-cultural society. AUDK will be a We will provide an environment for the About (AUDK-CDM), which are currently centers. AUDK will also pursue accred- gateway into a new environment that is kind of experiences that enable students Public Policy, Design Dr. Honar Issa has been a scholar in the performing in an extraordinary man- itation for its programs. conducive to state-of-the-art research. to learn what it means to be a leader. and Media Studies, academic environment for more than ner. Having American English teachers, AUDK will provide students with a clear thirteen years. He has taught various AUDK-ELI offers top-level curricula for IIG: Will it be a challenge to attract IIG: How would you assess the contri- vision – a set of original ideas – required Management and subjects at Nottingham Trent University teaching English at various levels and international academic talent to bution that AUDK is making towards to become a leader. We believe that, in in the UK and acted as Interim Dean Finance, and Computer is open to anyone who desires to learn Kurdistan? the creation of the next generation of the absence of a creative vision, someone of the Faculty of Engineering at Soran Science. University in Kurdistan, in addition English, no matter if she/he is a student HI: Despite the current situation on leadership in the Kurdistan Region? can be a manager but not a true leader. to publishing a number of articles or an employee. AUDK-CDM is very the ground, being a member of faculty HI: The purpose of education at AUDK At AUDK, we have a vision to fully inte- in international journals. Dr. Issa is active in helping internally displaced at AUDK is appealing. The number of is not merely to transmit knowledge. grate with society and to be sensitive to an associate professor in structural persons (IDPs) and refugees as well as international applicants for administra- Rather, it is to teach the students how its problems, rather than being an iso- engineering. the government to set up roadmaps to tive, faculty, and staff positions is rapidly to use their knowledge as leaders of lated ivory tower. A 150 — Kurdistan Review Invest in Group — 151 H E HIGHER EDUCATION

Educational Edge

IIG: How does PDI collaborate with the RR: The MBA at PDI is a student cen- private sector to ensure you are satisfy- tered, dynamic, and interactive program ing the demands of your clients? that focuses on the main aspects of busi- RR: PDI began operations three years ness and the working environment. The ago, and in this short period of time we program is consistently updated and have had the pleasure of working with touches on current business trends and some of Kurdistan and Iraq’s largest pri- issues, analyzing real-life case studies. We vate sector companies, and have devel- have recently introduced three special- oped courses and provided trainings izations to our MBA program: Project for government and non-governmental Management, Leadership, and Finance. entities. The variety of courses that PDI The MBA program strives for the high- offers and the range of clients that we have est standards, comparable to other MBA Robert Ritchie — places us in a good position to understand programs offered internationally. This Director, Professional Development market needs and trends. Being in the means that students need not go abroad Institute (PDI), American University of professional education field means that to receive a first-rate educational expe- Iraq, Sulaimani (AUIS) PDI deals with different types of clients, rience. The exposure to a new way of from individuals who seek to improve learning that is fresh and engaging will Robert Ritchie speaks to IIG their English language skills, to businesses equip students with the knowledge and about the growing demand for seeking consultation services or train- skills necessary to further succeed in their professional development training ings, to professionals who look for career careers. and education in Kurdistan, and advancement by obtaining an MBA or explains why PDI’s MBA program knowledge/skills in a specific area. It is IIG: Who would you say is the target remains the touchstone of business essential to understand the needs of each demographic for the program? education in Kurdistan and Iraq. client so as to customize trainings and RR: The enrollment process encourages courses relevant to their needs. Therefore applications from a diverse background we apply a client-centered approach to of students, which complements the pro- everything that we do. gram by bringing together a broad range of experience to discuss and analyze busi- IIG: Where do you find PDI to be partic- ness topics and issues. This mix in turn ularly strong within the human capacity encourages debate and exchanges of ideas development sector in Kurdistan? whereby students find innovative solu- Sulaimani Forum RR: There is a great need for training in tions and discover new ways of approach- Kurdistan and we receive many requests ing work related matters. The target is While its unofficial epithet, The Davos of the Middle East, for all kinds of trainings, ranging from both experienced business professionals may be ambitious, the 2014 Sulaimani Forum, hosted language courses to field specific courses. and motivated young graduates. We aim by the American University of Iraq, Sulaimani (AUIS) Our MBA program and English language to achieve maximum synergy. on March 4th 2014 was not far off the mark—especially courses have proven to be very popular considering that this year’s annual Forum was only the and attract a diverse student body due to IIG: Does the curriculum of the pro- second of its kind. The Forum brought together many the fact that these programs were part of gram reflect any unique elements of the of the most influential and distinguished figures shaping About the department’s initial offering. As PDI business environment in the Region? the modern Middle East and set a high standard for Robert Ritchie overseas all activities expands its portfolio, we are witnessing a RR: The MBA program has witnessed conferences in Kurdistan and Iraq. The theme of this year’s related to the creation and provision rise in demand for courses such as Project growth every year since its inception in Forum was “Navigating the Challenges of the Middle of educational programs fostering Management, IT, Finance, and general 2007. The curriculum of the program East,” and covered many challenging topics, including professional growth and development, consulting work. PDI’s strengths lie in is comparable to other MBA programs Iraqi and Kurdish political difficulties and economic and directs the University’s MBA focusing on the clients and their needs internationally and at the same time opportunities, panels on investing in Iraq and Kurdistan, program. He has over 15 years of in whatever field or area of training they designed to be relevant to meet local energy sector development, water and environmental international business development and issues, and sociopolitical challenges. With over 300 guests university teaching experience. Ritchie may require. needs. We have also redesigned our the- holds an MBA from Boston University’s sis requirement to focus on real industry in attendance, the Forum convened speakers including School of Management, a JD from the IIG: How has PDI been so successful in problems, resulting in tangible benefit prominent American, European, Turkish, Iranian, and Iraqi Temple University School of Law, and a attracting high caliber students to the both to the student and their respective politicians and diplomats, and several prominent members BA from Arcadia University. MBA program? companies. A of the academic, business, media, and NGO communities. 152 — Kurdistan Review Invest in Group — 153 H E HIGHER EDUCATION

Bringing Best Practices Progress in Higher Education

IIG: Why did SABIS choose the implement a non-selective admissions IIG: How does UKH differentiate itself performance and results, some are publicly Kurdistan Region to open its first policy. To meet our customers’ needs, we from other local universities in terms of registered, and they have completely dif- university? bring all of our resources and experience developing the Region’s human capacity? ferent expectations for performance, hard CB: The first PPP school that we operated to bear. We bring innovation, motiva- KS: In 2006, the PM Nechirvan Barzani work, and innovation. This is something was such a tremendous success—to the tion, and competition to the educational initiated the establishment of an English- new to this generation. They will learn and point that in its second year of operation landscape, all elements that contribute to language university that provided a mod- discover just how hard other people are we had 90 openings in the Kindergarten raising standards—our standards and the ern education. The idea is largely grounded working. That will come with time. and had 1,700 students apply for the standards of the entire education sector in his broader vision of Kurdistan's devel- At our university we see a different open seats—that a lottery system was in Kurdistan. opment. The university started with con- trend already, because what we typically implemented to determine who among centrations in politics, social sciences, do is re-educate our students. When stu- the applicants could be admitted to the IIG: Do you have any plans for future and management. When the oil indus- dents arrive here, they are used to learn- school. Facing the unfortunate situation expansion in the Kurdistan Region? try gained traction in the Region, we ing by heart or by rote memorization. Carl Bistany — where a child’s future is dependent on CB: SABIS has expansion plans for each Khaled Salih — also developed a department of natural We try to re-train our students to think President, SABIS the luck of a draw, PM Barzani decid- of the operational models we are current- Vice Chancellor, University of Kurdistan, resources. We now have the largest depart- critically and independently. ed to open more such schools, especially ly implementing in Kurdistan. On the Hewlêr (UKH) ment of natural resources in the Region. Carl Bistany provides IIG with in remote areas like Soran, Zakho, and private school front, we have immedi- Along the way, we also developed a depart- IIG: What challenges does Kurdistan’s insight into SABIS‘s experience Kalar. By establishing SABIS University ate plans to build a large, state-of-the- Khaled Salih reflects on recent ment of computer science. Our academic higher education sector face? entering Kurdistan’s education and the College of Education, we could art campus in Slemani. Land has also progress and remaining challenges programs are therefore designed to align KS: Higher education needs a lot of invest- market and the ways in which it cater to the growth of the PPP project been earmarked for the construction in Kurdistan's higher education with the demands of the Region’s labor ment, not only in infrastructure, but also is transforming all levels of the and bring this vision to reality. Shortly of a private school campus in Duhok. system and describes the ways market. in the process of thinking and questioning educational landscape in Kurdistan. after opening the College of Education, Additionally, plans are in the works for in which UKH hones critical what is around you. The KRG has invested SABIS University expanded to include at least another two private schools in thinking and marketable skills in its IIG: Can you tell us about UKH’s rela- in that, but since our educational system has the College of Business and Management the Erbil area. There are also plans in the graduates. tions with companies in Kurdistan? such a strong tradition with memorization, Studies and recently added the College works to expand the number of SABIS KS: To ensure that our education is as there has been a lack of progressive insti- of Engineering, all designed to provide PPP schools in Kurdistan in order to meet dynamic as Kurdistan’s economy, we are tution building. War and genocide have, of high quality tertiary education and build the high demand for school places in all of in constant dialogue with the companies course, also slowed the institution building capacity in Kurdistan for the purpose of our existing PPP schools. The demand for present in the market. In this way, when process—development of a modern edu- shaping the nation’s future. these school places comes from parents they employ our engineers, for exam- cational system has not been possible until who see that their children in our PPP ple, they will know what skills they are recently. So, what we do now is evaluate IIG: How do SABIS member schools fit schools are acquiring the knowledge and recruiting. Also, if there is any gap in the what we will end up with. I am optimis- into the broader educational landscape skills needed to be able to compete on a education we provide, they can discover it tic about higher education here, because I in Kurdistan? global scale. quickly and tell us the need that should to see the initiatives undertaken by UKH and About CB: In our view, SABIS has an important In response to the high demand for be filled, allowing us to adjust our curric- other universities. Some have established Carl Bistany is a board member of role to play in the broader educational SABIS PPP schools, there are currently About ula to the needs of the market. We also ask contacts with European and American uni- SABIS Holdings and the president landscape in the Kurdistan Region. We an additional 10 schools planned, but on Khaled Salih has been Vice Chancellor major companies what areas of research versities, and they are trying to reform their of SABIS Educational Services, SAL, are a private, for-profit educational man- hold pending financing. Once the ques- of the University of Kurdistan Hewlêr they find important and expose our stu- system. Of course, these changes are gradu- and SABIS Educational Systems, Inc. agement organization, and as such we tion of financing has been addressed, since 2012. He was a Senior Lecturer dents directly to the needs of the market, al and take time. A lot of training internally He holds two Master’s degrees in represent private enterprise, an essential there is a possibility of substantially and Researcher in Middle East Studies so that the capacities of our students are in institutions is required before there are Mathematics and Computer Science at the University of Southern Denmark factor in the equation to raise education increasing the network of SABIS PPP already in harmony with the needs of the visible results. However, the first generation from Syracuse University, NY, and has between 1997 and 2009, he has completed the Harvard Business School standards. Our success depends on our schools in the Kurdistan Region and served as an advisor to the KRG on job market once they graduate. of modern, educated students and research- Executive Education program. He serves ability to deliver a product that meets thereby providing a high-quality educa- several matters, and he has published ers will have consequences for the entire in leadership and advisory capacities our customers’ needs and expectations. tion to more students who will become extensively on Kurdistan and Iraq. He IIG: What role is the private sector play- system a generation later. So, keeping in at several professional and academic And our customers include every stu- the driving force behind the rebuilding holds a PhD in Political Science from the ing in improving human capacity? mind that it will take time, the first steps organizations. dent, because SABIS member schools of Kurdistan. A University of Gothenburg in Sweden. KS: The new companies here demand high taken are in the right direction. A 154 — Kurdistan Review Invest in Group — 155 HUMAN CAPITAL THE REVIEW Human Capital

SECTOR AT A GLANCE

1.4 Million Public Sector Employees

Around 1 million new job seekers will enter the market over the next 20 years.

2.1 Million Labor Force

38% Labor Force 62+38O Participation

Target for local share of oil & 90% gas workforce Untapped Resource 10+90O (2016) The KRG aims to create better educational and training opportunities to develop skilled human capital. erhaps more than any other sec- large, young, and yearning for profession- Unemployment tor or resource, Kurdistan’s quick- al development—and the private sector 4.6% Male ly expanding workforce contains has the incentive and capital to provide it. 12.6% Female P arguably the most potential to reshape the The vast majority of Region’s work- Kurdistan Region’s business, economic, force is employed in the public sector—a and social landscape for the better, over legacy of both decades of sanctions, which the long term. This untapped potential is stunted private sector development and $100 Million a result of several factors coming togeth- employment, and a broader Iraqi history Annual Budget for er, including latency in the professional of centralization of the economy begin- $ HCDP capacities of the Region’s workforce, a ning in the mid-20th century. Indeed, major demographic skew towards young- as of 2012, only 20% of all wage-paying er generations, and the influx of invest- jobs in the Kurdistan Region were in the ment that has swept into the Region over private sector. This statistic, however, is the past decade. The current situation, untenable—something which the KRG’s then, is one in which the workforce is leadership understands—and is changing.

Invest in Group — 157 H C HUMAN CAPITAL

The MNR estimates that oil companies' production workforce will increase 200% for every 100,000 barrels per day produced. Current Employment must shift to the private However, some of the biggest momen- expertise—from English (as well as sector for both reasons of efficiency and tum for capacity development and train- Kurdish or Arabic) language, to com- production is around 400,000 bpd and may reach 1 million bpd by demography: The median age of the ing, and private sector employment, puter programming, to firefighting. Kurdistan Region is only 20-21 years, comes directly from the private sector. Perhaps the most promising train- the end of the coming year, representing the possible addition of meaning that the working age popu- Training takes the form of in-house ing and development programs, how- thousands of new production workers. lation is set to expand massively in the operations at major companies or ever, are the products of public-private coming decade, which the already bloat- training centers at universities, such as cooperation. The Ministry of Natural ed public sector certainly cannot absorb. the Professional Development Institute Resources (MNR) conducts the largest Private Sector Training KRG initiatives are pushing employment (PDI) at the American University of of these programs. International oil com- However, to prepare the workforce for centers find it important to work close- increasingly into the private sector, as well Iraq, Sulaimani (AUIS) and the English panies (IOCs), as part of their Production the rigor of private sector employment, ly with companies and clients to tailor 850K-1.1 million as training employees in methods that Language Center at the University of Sharing Contracts (PSCs) with the MNR in some cases additional skills and devel- courses directly to what is demanded. The Kurdistan Region will add improve skills and efficiency in the pub- Kurdistan, Hewler (UKH). MSelect, to explore and produce oil, must contrib- opment training is necessary. This is par- “It is essential to understand the needs lic sector. The KRG’s Human Capacity a recruitment agency, has a training ute a certain percentage of their income ticularly true for employment in foreign of each client so as to customize train- between 850,000 and 1.1 million Development Program (HCDP) sends and development center, as do specif- towards the MNR’s capacity development companies operating in Kurdistan. For ings and courses relevant to their needs,” new employees to its workforce recent graduates to international uni- ic sector oriented companies, such as programs. Some IOCs take this even fur- example, written and spoken English notes Robert Ritchie, director of AUIS’s in the coming 20 years. versities for post-graduate studies, many Stirling Group’s Health, Safety, Security ther—Gulf Keystone, for example, has proficiency often presents challenges, Professional Development Institute. agencies train their own employees (or & Environment (HSSE) training pro- improved morale, staff retention, and professionalism in writing and commu- “Iraq has seen years of conflict, which those of other agencies), and the Prime grams. Companies use each of these overall productivity through the cre- nication is sometimes found lacking, and has adversely affected the opportuni- Minister’s office unveiled in 2013 a web- operations, depending on their specif- ation of a comprehensive capacity devel- basic to intermediate computer skills ty for its people to gain knowledge and site to pair job-seekers with employers in ic needs, to invest in their employees’ opment program for their employees in can need touching up. These skills can skills. Now, especially in the Kurdistan the private sector. skills, professional development, and Kurdistan. be developed at many different profes- Region, the favorable security situation sional development and training centers means that the Region has an opportu- and institutes. nity to invest in its workforce. There is a Public to Private: The Great Migration Perhaps less often considered is cul- great need for training in Kurdistan and Creating increased employment oppor- This will require increased local entre- benchmarks. In many sectors, the KRG tural awareness in the workplace for both we receive many requests for all kinds of 63% tunities in the private sector is among preneurialism, increased foreign direct offers regular tenders and contracts for expat workers and local staff. According trainings, ranging from language courses the most important factors in insur- investment, or privatization of some gov- outsourcing projects and even works in to Allegra Klein, director of MSelect’s to field specific courses.” ing social and economic health in the ernment functions. The KRG has been joint ventures to bring the private sec- Training and Development Center, “On Companies themselves also provide Region. Given the Region’s aforemen- actively working towards the initial two tor into public projects. Even within the job sites…people work in isolated, close extensive training to their employees. 64+36+M tioned young demographic makeup, options, most obviously through its 2006 training and development sector, the quarters for weeks at a time. This creates From retail, where Landmark Group IOCs employ 4,137 people it is estimated that the Region will add Investment Law, which has had great suc- KRG contracts with private universities potential for clashes from religious or brings in foreign experts to train local in Kurdistan, 63% of between 850,000 and 1.1 million new cess in both bringing foreign investors and training institutes to improve the cultural misunderstandings. Companies employees and management, to ICT, whom are locals. employees to its workforce in the coming to the Region, but also in spurring local skills of local public workers. are therefore making cultural awareness where companies such as CIS and oth- 20 years—equivalent to over 20% of the investment and entrepreneurialism. Since While the migration into private sec- much more of a priority.” ers send their employees to get interna- Region’s entire current population and the law’s inception in 2006, the Region tor employment is a must in coming MSelect is also now working in recent tional certificates for new technologies 100% growth on current employment has seen 693 new licensed projects, total- years, the transition will take time and collaboration with the World Bank’s and equipment. Bigger companies such figures. ing over $39 billion of foreign and domes- further decisive action by both the pub- International Finance Corporation as Faruk Group Holding have large staff The KRG’s public sector already tic investment, and countless new private lic and private sectors. One 2014 report (IFC), which is opening up its ‘Business training divisions to bring staff into line employs a far outsized percentage of its sector jobs. commissioned by the KRG notes that, in Edge’ initiative in the Region. The pro- with the companies’ quality standards. population in its bureaucracy and direct Regarding the third option, outsourc- addition to poor English language and gram is active in 30 developing countries Even in healthcare, companies are government employment, state owned ing public sector functions to the private computer skills, preference for public sec- and available in 10 languages. It covers bringing professional expertise to the enterprises, and public-private initia- sector, there has been movement as well. tor employment still hinders the private 59 individual topics, tailoring its pro- field after graduates leave university. 90% tives. Further expansion of the public Public-private partnership arrangements sector labor market, as many competitive gramming to the needs of local work- Nordic Medical Services, part of RMSI sector’s size in relation to the Region’s are developing increasing momentum employees seek stable jobs in the public ers and seeking to improve the general International, trains local healthcare pro- population– let alone a doubling in size, in the KRG. Particularly where indus- sector. Overcoming this challenge will professional competencies of employees. fessionals from many of Erbil’s hospitals as the workforce is estimated to do over try specific expertise can be helpful, the require private companies to compete MSelect has been chosen by the IFC to in Pre-Hospital Trauma Life Support. 90+10+M the coming 20 years– would broadly be KRG is eager to work with private, often more strongly with the public sector in lead Business Edge courses in Kurdistan Faruk Medical City partners with local The MNR has set a target understood as an inefficient use of public foreign, companies. In ICT, for example, the labor market, but will also require and Iraq in English, Arabic, and Kurdish. medical schools to bring recent graduates of reaching 90% local resources. This leaves the private sector to the KRG’s Department of IT (DIT) coor- a broader understanding among the As many companies and organizations into the hospital in residency schemes, employment in the energy pick up the slack in the coming workforce dinates with several private companies to Kurdish workforce of the benefits of pri- find wide and disparate needs in terms of bringing them up to speed with inter- sector by 2016. expansion. achieve the KRG’s IT-related goals and vate sector employment. human capital, universities and training national norms in healthcare provision.

158 — Kurdistan Review Invest in Group — 159 H C Did you know? A doubling of Kurdistan’s workforce presents much more opportunity than liability—the addition of 1 million bright, capable entrants to the workforce carries with it unrivaled untapped potential for the Region’s economy and business environment. KURDISTAN BOARD of INVESTMENT

The Kurdistan Region of Iraq is a booming market that offers promising investment opportunities especially in the agriculture, industry, and tourism sectors.

Energy Sector Paves the Way As the largest driver of Kurdistan’s econ- MOL Group and Marathon Oil have expand as IOCs move from exploration omy, the energy sector has played a scholarship programs in place to send to production. IOCs currently employ leading role in expanding the skills of recent local graduates to study petroleum 4,137 people in Kurdistan, 63% of whom the Region’s workforce in collaboration engineering at top international univer- are locals. The MNR estimates that these with the Ministry of Natural Resources sities, and Genel Energy and ShaMaran companies’ production workforce will (MNR). Early in the sector’s development Petroleum have donated generously to increase 200% for every 100,000 barrels in Kurdistan as the MNR began offering AUIS. Moreover, some companies find per day produced. Current production Production Sharing Contracts (PSCs) to that investing heavily in the careers of is around 400,000 bpd and may reach international oil companies (IOCs) for 1 million bpd by the end of the coming exploration and production, the Ministry The KRG initiatives are year, representing the possible addition recognized the importance of the local of thousands of new production workers. capacity development that IOCs could pushing employment Stirling Group, a health, safety, secu- offer the Region. The MNR thus cre- increasingly into the rity, and environment (HSSE) firm, is ated a compulsory ‘capacity building anticipating this workforce growth by bonus’ to be paid by IOCs towards local private sector, as well as expanding and broadening its training capacity and infrastructure initiatives in training employees in capabilities, including the development Kurdistan. The bonus is first paid upon methods that improve of a full-scale oil rig in a training center signing a PSC, and then collected as a per- just outside Erbil. The company current- The BOI is providing professional one-stop-shop services to centage (between 2.4-4.8%) of net profits skills and efficiency in the ly brings in HSSE training experts from as profit oil is produced. public sector. around the world to provide global exper- investors and is responsible for granting public benefits to eligible This year the MNR is using some of this tise to the local energy sector. funding for a major capacity development their local employees pays hefty returns The MNR aims to reach 90% local private investment projects based on the investment law of 2006. project that will target thousands of people, in terms of staff retention, morale, and employment in the energy sector by including the Ministry’s own employees productivity. Chris Parker, a consultant to 2016. Current local employment by and future energy sector employees. The the Region’s energy sector, characterized IOCs in Kurdistan is largely concentrat- training program seeks to be comprehen- these programs as small investments for ed in the lower rungs of the employment sive and comprises both formal training large workforce enhancements. Benefits ladder, especially in unskilled and semi- and an internship with an IOC. of training programs for the companies skilled labor, where locals represent 88% Oil companies often find that the involved include improved safety and and 95% of the workforce, respectively. incentive of creating and retaining skilled, efficiency, as well as a happier workforce Moving locals into more executive, senior, www.kurdistaninvestment.org professional workers is enough to invest with more defined career paths, greater and managerial positions is a long-term in capacity building programs inde- professionalism and competency, and goal of the MNR, but one which will take General Directorate of Investment Erbil General Directorate of Investment Slemani General Directorate of Investment Duhok pendently. Many IOCs also actively hire increased pride in its work. time as education and experience accrue (Branch office) (Branch office) (Branch office) local graduates for professional positions. Initiatives such as these are set to among the local IOC workforce. Emergency Hospital Street, Bakhtiary, Erbil Sarchnar, next to Mashxalan Masjid, Slemani 1st Shubat Street, Duhok A +964 66 / 264 21 18 +964 53 / 318 17 23 , or - 318 17 24 +964 62 / 762 71 75, or - 762 70 13 160 — Kurdistan Review [email protected] [email protected] [email protected] H C HUMAN CAPITAL

MSELECT Employee Survey

MSELECT is pleased to announce the career information in light of the fast- Kurdistan. With over 1,000 respondents, launch of our 2014 Kurdistan Oil & Gas paced economic development of Kurd- MSELECT was able to form a gener- Seeking a new job role? Actively or passively Reason looking for a new job Job Market Overview and Salary Sur- istan, in comparison to the surveyed al idea of the professional disciplines vey, the first such comprehensive survey companies’ hiring trends and what they available in the market, their pay struc- seeking? 15% Higher Salary ‘from the ground’ in Kurdistan. By de- offer in terms of compensation, benefits ture and benefits received, as well as 15% 13% 17% New Challenges veloping two different surveys, the goal packages, and career development op- expectations from current and future 14% Career Development was to approach both employees work- portunities. Company information was employers. This is likely to have a direct 8% ing throughout Kurdistan and major Oil supplied by most of the major interna- influence on companies that are looking Better work/life balance 7% and Gas ‘Exploration & Production’ com- tional oil and gas operators in Kurdistan. to increase their current workforce in the Better training 9% 6% panies operating in the same region. The The employees’ survey was con- short – or mid-term by adjusting their 87% 83% Better location 5% questionnaires were carefully designed ducted over a four-month period and hiring strategies to effectively attract 4% Traveling 5% to obtain the participating employees’ covered all types of expertise within talented candidates. More responsibility 5% Better bonus 5% Improved benefits Whom do you work for? Number of years in How did you find package 13 Yes +87F17 Actively +83F current role your current role? No Passively 4% 19% 4%4% 22% Most important corporate benefits for employees Overall, how satisfied are you with your 31% 14% position at the current employer? 9% 17% 62% 38% Training 16% 4% 21% Annual Bonus Satisfied and willing to develop 13% 31% 16% Health Insurance my career path with the company 10% Car Allowance 7% 37% 16% Overtime Happy with my job, don't mind 7% 41% Travel Allowance moving to another job opportunity 7% 38 An International Company +62F 19 < 1 Year +94+37+31F 22 Company website +2016144F Housing Allowance A locally Established Company 1-3 Years Word of mouth Not satisfied, currently looking 3-6 Years Recruitment agency 28% 6-10 Years Internal move for a better job opportunity > 10 Years Other Newspaper Head Hunted Jobs Board How motivated are you to see Did you receive Have you had any training your company succeed? a pay raise last year? in the last 12 months? 8%

59% 32% 56% 44% 63% 37%

8 Highly motivated +3260F 44 Yes +56F37 Yes +63F Neutral No No Not Motivated

162 — Kurdistan Review Invest in Group — 163 H C HUMAN CAPITAL Workforce Capability Development

Building Capacity IIG: What is the MNR’s workforce capa- and gas companies. So the real answer is bility development program? higher than 63% – more than two-thirds IIG: Can you tell us about MSelect's we offer popular courses for expats and IM: Our goal is getting more Kurds of those directly employed by the oil and large-scale training programs? their spouses combining cultural aware- employed in meaningful roles in the oil gas industry right now are local staff. But AK: The MNR is currently initiat- ness with basic information on integrat- and gas industry in order for them to to understand the challenge better, you ing training for its own employees—of ing socially and living in Kurdistan. develop technical skills and for Kurdistan need go to the last MNR monthly report which it has several thousand. Part of the to develop a workforce with the techni- where you will see a chart that breaks funding comes though the oil compa- IIG: MSelect is also involved in the cal capability to manage nies, which allocate a certain percentage ‘Business Edge’ training program. the industry. Workforce Our goal is getting more of their revenues specifically for training AK: Business Edge is a program of the development is a key com- Kurds employed in when they sign PSCs with the MNR. The World Bank's International Finance ponent of regional devel- program will include internships as well. Corporation (IFC). The IFC facilitates opment: the oil and gas meaningful roles in the oil We are already providing such an intern- business training programs in 30 devel- Ian McIntosh — sector is poised to gener- and gas industry in order for them ship program for a major oil operator, oping countries in 10 languages, covering Consultant at the Ministry of Natural ate significant value, and Allegra Klein — where we will identify current students 59 separate topics under seven headings, Resources (MNR) we want to retain the max- to develop technical skills and for Director, Training and Development or recent graduates who are looking to such as HR, bookkeeping, governance, imum share of that value Kurdistan to develop a workforce Center, MSelect break into the energy sector, but do not hospitality, and personal productivity, Ian McIntosh talks to IIG about the that we can within the with the technical capability to yet have sufficient experience, and place among others. Of those, at least 36 have MNR’s plans to develop technical Region. So this project is Allegra Klein provides insight into them with one of the world’s premier oil been translated into Arabic, and MSelect and vocational skills that will allow not just about getting more manage the industry. the expansion of MSelect into companies to gain hands-on experience. has been approached to translate some the Kurdish workforce to take Kurds into the industry. It training and development, the of the courses into Kurdish. Two of our on a bigger role at all levels of is vital that we develop a skilled, compe- down the IOC workforce by seniority training-related demands of local IIG: Can you tell us about your cultural trainers have already become certified by Kurdistan’s booming oil and gas tent workforce. from executive down to unskilled. This and multinational businesses in awareness courses? the IFC as Business Edge trainers. They industry. shows a high percentage of expats at Kurdistan, and the future of the AK: Cultural awareness is very important, are trilingual in English, Kurdish, and IIG: How do you structure the priorities the senior and high-skilled end dimin- training sector in the Region. particularly to the energy industry, and Arabic, so they can conduct courses in of the program? ishing in expats down to the unskilled cultural awareness has become the most any of those languages, throughout the IM: Foundation Training is a priority. level, where you see the inverse. So this Kurdistan Region and Iraq. Within the job families, I have focused single percentage measure hides the real on competency development in certain challenge. IIG: What edge does your Center have key functions. The production operations by operating under MSelect rather than training board is the most vital to me. IIG: How does the lack of this skilled a university? Some 4,000 positions will be created in workforce affect the industry? AK: When we established the Center, we production operations in the next five IM: The immediate impact is cost. It is already had a clientele of over 300 compa- years. That is a lot of skilled jobs to be an impact on the industry, but ultimate- nies in the Region. We initially established created. That, in itself, makes it worthy ly it is an impact on the KRG. Oil and the Center when many of our existing of attention. The other thing is that those gas is a global industry. Skilled personnel clients requested training courses from jobs are quite critical in terms of oper- are readily available in this international us, and since we have begun offering ational risk. The best way that you can market. Oil companies can easily get per- courses, our existing clients have largely ensure that there will not be an incident sonnel, but at a high price. So the lack of driven our expansion. Becoming a ven- is by having competent people running local personnel does not actually impede dor to an oil company requires signifi- those facilities. The other priority job companies doing their work, and more- cant effort, which we initially completed family is graduate engineers and geolo- over, this high cost may not ultimately to become a staffing company. Having gists who fill high skilled roles and are the be a concern to them. Kurdistan uses demanded subset of courses we teach. On already become an approved vendor, we managers of tomorrow. Training tomor- “cost recoverable” contracts, so while all job sites, at rigs and production facilities, can now provide several resources to oil row’s leaders is vital the costs are at the company’s risk until About people work in isolated, close quarters for companies, including training. However, it makes a discovery, once a discovery Allegra Klein holds a Bachelor's degree weeks at a time. This creates significant we have also attracted many new clients About IIG: We heard that 63% of the is put into production, the company is from Harvard University and pursued potential for clashes from religious or cul- on our own. In these cases sometimes our Ian McIntosh studied civil and mining Kurdistan-based workforce for oil and allowed to recover what it has spent from Master’s studies at New York University engineering, then trained as a petroleum tural differences. Companies are therefore Training Center brings in clients to our gas companies is made up of locals. the revenue generated before its profit in Global Affairs. Previous to her tenure engineer with Shell. He has lived and at MSelect, Klein worked with an Iraqi making cultural awareness much more of staffing services. In this way, our staffing worked in the UK, Canada, and North IM: True, and the data do not include oil is allocated. That does not create a firm in Baghdad to develop projects that a priority, and we cater to this need with and training services work well in col- Africa before Kurdistan. Ian has been service companies. From a survey we great incentive for the oil companies to benefit Iraq’s civil society organizations, courses that explain Western norms to laboration with one another—MSelect’s working in Kurdistan since January did a couple of years ago, we know that reduce costs, which I believe translates small businesses, agricultural institu- locals, as well as local religious values and recruiters are essentially our sales staff, 2010, and was Vice President at the percentage of local staff in the ser- into a lower incentive to develop lower tions, and government employees. Kurdish culture to expats. Related to this, and vice-versa. A WesternZagros until 2013. vice companies is higher than in the oil cost local staff. A 164 — Kurdistan Review Invest in Group — 165 H C HUMAN CAPITAL

ANALYSIS— Creating the Skilled Workforce Chris Parker discusses why a skilled workforce is the main Kurdistan Careers requirement of Kurdistan’s growing economy. Connecting Jobseekers with Employers Chris Parker — IIG: What inspired the creation of the type of event and other industry-focused Managing Director, Charmogen Kurdistan Careers event? events to act as a barometer for where the NK: We thought Kurdistan was missing economy is going. We want to be the place espite all the turbulence and whole with accepted international stan- So how would such enforcement work a place where all of the employment mar- that brings together all the companies, upheaval in Iraq, Kurdistan con- dards will aid collective ‘buy in’ and save without too much red tape and legal ket could come together. Events similar expats, and new graduates that want to Dtinues on a path to prosperity. valuable time. An example would be the concerns? I expect that a national com- to this already exist at universities, but work in Kurdistan. We want to be that However, several long-term constraints use of NEBOSH in HSE as the national munication campaign would help to those are only focused on students. We go-to place once a year where you find remain as obstacles to long term Kurdish standard, even if it is termed as a Kurdish encourage all to support the economy are focusing on the whole Kurdistan your job, and we also want to expand into progress. Primarily, Kurdistan will need system aligned to NEBOSH. A key driv- by playing his or her part responsibly in Region. Kurdistan is a growing market, large-scale workshops focusing on pro- to ensure economic sustainability, espe- er is the need for commonality in areas the emerging future prosperity. We are all but it is hard to know where to start for fessional development. In our upcoming cially by gaining guaranteed revenue flow such as competency and skills lest mul- aware of how far Kurdistan has come in a new graduates. We thought that, in a two- event, we will have an awards ceremony– from her new oil production. Allied to this tiple terms and taxonomy emerge for decade, but we must also remain mindful day event, we could bring together what the Kurdistan Careers Key Awards. It sets important political issue is the provision the same skill. This is likely to add to the of how the culture of employment and Dr. Nawzad Kameran — would take six months of searching to do. a standard within the employment mar- of what I call ‘Capital-I Infrastructure’: the confusion and inefficiency later on if not competency development has had to Partner, Kurdistan Careers Besides that, we knew that an initiative ket, celebrates achievement in the local vital national foundations required for sig- addressed now. almost start afresh in a short timeframe. Lecturer, Department of Computer for private sector training was missing market, and is something to which people nificant economic growth. 2. The workforce need to be encour- As a practitioner and observer in much of Science and Engineering, University of here in Kurdistan. Thus, we wanted to can aspire. One of the main requirements of aged to remain in organizations that invest Kurdistan’s tremendous success to date, I Kurdistan-Hewler raise awareness through annual events any growing, new economy is the devel- in them and not to depart with newly won think that the use of external best practice and smaller events connected to them, IIG: We know that most of your spon- opment of a skilled workforce. This is qualifications to the highest bidder. This and expertise in the Ministries to quickly Nawzad Kameran explains how as well as through the media. sors are giant energy and ICT com- no small challenge and one that oth- practice discourages investment in devel- bring about such regulatory change will Kurdistan Careers connects panies. Do you also target small and er regional oil boomers have solved by opment as it is seen as a risk. Again, reg- then enshrine workforce development as a Kurdistan’s workforce with the IIG: What is the main benefit for job- medium-sized enterprises (SMEs)? imported labor. The model used to date ulatory best practice exists in many Gulf major factor in the security of Kurdistan’s Region’s growing economy through seekers and companies that participate NK: It is true that most of the sponsors are in many GCC countries has seen cheap countries to constrain employees once an economic progress and growth. Without networking and capacity building. in the Kurdistan Careers event? big companies in the energy and ICT sec- skilled labor imported as a workforce with employment is secured in order to protect it, the future looks less secure. Short-term NK: We have realized that networking tors. The majority of exhibitors are SMEs, expat consultants providing technical and both employers and the national econom- gains will be made but the unease amongst is not as strong here as we might have though. The SMEs do not realize what executive management. This has proved a ic good. A system used successfully in unemployed young Kurds, as well as the thought. For example, we had our first they are missing out on or the quality of short-term success but one that has impli- other countries is one of repayment of lack of wealth distribution through career event in Erbil at a government IT train- the people they can get. They invest more cations for local employment and long- training costs if an employee leaves a post jobs, will bring a whole new set of distrac- As the economy grows, ing academy with Microsoft-certified in family contacts. Participating in some- term sustainability. These two issues are before a certain time bar date. Another is tions for an already busy KRG. you need this type courses, and companies did not even thing like the Kurdistan Careers event or ones that the KRG seems keen to address, to license all employees and thus move- In summary, I believe that Kurdistan know this training academy existed. We reaching out to universities to see what not least as its ambitious young populous ment is controlled and an employer who has a decision to make on a nation- of event and other asked companies what the main reason qualified people they can get gives more need employment and not in the already wishes to protest against ‘staff poaching’ al strategic plan for its workforce and industry-focused they exhibited was in our 2013 feedback variety to jobseekers and the employment over-burdened public sector. However, the can do so with national support. how to then deliver that operationally. survey, and 30% said networking. The market. only way this will happen is for a systemat- 3. Workforce development schemes Our own experience tells us that it can events to act as a main benefit was that companies realized ic campaign of both regulatory and phys- such as Competency Management be done rapidly and that the Kurdistan barometer for where they were not alone facing issues finding IIG: Are you planning to provide ical action to ensure enduring workforce Systems should be required of all medi- workforce not only thirsts for profes- good labor. For jobseekers, we provide recruitment services? development by all parties involved. um and major scale organizations in both sional Competency Development but the economy is going. the largest venue for finding employment NK: We stay away from the recruitment Regulatory reform will be the catalyst public and private sector. Without such a also enjoys hard work. Those two aspects We want to be the place opportunities, language and soft skills process itself, but we give companies a for physical action, and the KRG should requirement, staff development is current- normally guarantee a major foundation training, placements, and internation- whole list of contacts. Basically, we help now address three key areas of regulatory ly seen by some as a lower priority than for economic growth, especially with such that brings together all al internships. The KRG policymakers on the transparency side of things, so enforcement: short-term profit margins. There is best abundance in extractive resources. These the companies, expats, also benefit from the perspectives of both people know which resources are avail- 1. National standards must be swift- practice available today from Kurdistan measures will only need a small amount exhibitors and jobseekers. able. Last year, we helped the KRG as ly identified and stated by the relevant companies such as Gulf Keystone, whose of resources to set in motion, but the and new graduates they launched their job listing website, Ministries. As importantly, these stan- industry leading Competency Based return on that visionary investment will that want to work in IIG: What are your future plans for Kurdistan Works, at Kurdistan Careers. dards must also be enforced and audited Framework is already repaying the invest- see swift rewards and increased economic Kurdistan Careers? We helped them connect with all of the to ensure compliance in both the private ment with increased staff productivity, sustainability and political security in the Kurdistan. NK: As the economy grows, you need this recruitment market. A and public sectors. Alignment in part or loyalty and contentment. decades ahead. A 166 — Kurdistan Review Invest in Group — 167 HEALTH THE REVIEW INVEST IN GROUP Health AN EYE ON THE EMERGING WORLD SECTOR The IIG iPad App is free to download and AT A GLANCE includes all IIG publications. $927 Million Total Investment

$2.1 Billion Investment needed

$195 Million FDI

Budget 954.8% +5O Allocation

Over 2,090 new doctors will have graduated by 2020, a 38% increase from 2014 The Right Direction The Ministry of Health has A series of reforms and investments has helped conducted 144 training reinvigorate the health sector in Kurdistan since courses in the nursing field, attended by about 5,000 2007. Today, the industry provides plenty of nurses and paramedics. opportunities for foreign investors.

espite acknowledged deficien- and Europe. As the KRG seeks to do so, cies in its healthcare system, the they are drawing more and more upon DKurdistan Region has earned the skills of Kurdistan’s vast expatriate itself increasing recognition for having community and foreign investment to Total Hospitals 101 the best healthcare in Iraq. Mortality, life raise local standards of care. Meanwhile, expectancy, and infant mortality rates in many Kurds and other residents of the Private Hospitals 42 Kurdistan outperform corresponding fig- Region with medical training that had ures in the rest of Iraq. In its “Vision 2020” fled Kurdistan amidst the violence and statement, the KRG sets out to increase deprivation of the decades prior to the fall public health funding while improving of Saddam Hussein have been returning the quality and efficiency of Kurdistan’s in recent years and contributing to the health system in order to achieve health revitalization of the public and private www.investingroup.org indicators in line with the Gulf States sectors alike.

Invest in Group — 169 H HEALTH

Fostering Public-Private Competition to Improve Quality As a way of overcoming decades of A recent example of these private The KRG’s reliance on private sector neglect to produce a more effective, funds in action was the opening of the actors to bridge the gaps that still exist in cost-efficient health system, the Kurdistan Kurdistan Children’s Hospital in Erbil in Kurdistan’s health infrastructure is not Regional Government (KRG) has made March 2014. Initiated by a local doctor without risks. The BOI itself acknowl- private investment in the healthcare sec- and constructed with the full support edges that an over-dependence on pri- tor a cornerstone of its health policy. The of the KRG, the hospital’s construc- vate health providers could produce a KRG Ministry of Health statistics reveal tion was financed through a donation two-track healthcare system in which that health spending stood at relatively from Canadian oil and gas firm Oryx much needed, high quality health ser- meager 4.8% of the KRG’s budget in 2013, Petroleum. A British charity owns the vices become available in the Region but although health spending is expected to hospital and operates it on a non-profit are simply out of reach of the poor. The Publicly funded institutions underpin have risen in proportion to other areas basis, with the aim of providing interna- BOI explains, “we are aware of the risk the health sector in Kurdistan and gov- of the budget over the course of the past tional standards of care to children and of this strategy causing a divide between ernment-run hospitals and clinics still year. Still, public funds cover less than half mothers in the Erbil area. what the rich and poor can afford, but, if dominate in the Region, despite a surge in of the healthcare system’s needs accord- The KRG hopes to harness private we start from the ground up, eventually private clinics and hospitals over the last ing to officials with the Kurdistan Board healthcare services like these to com- the public sector will be able to provide decade. Perhaps the most common inter- of Investment (BOI). The BOI reports plement a public health system that is high quality tertiary care.” In recognition action most residents of the Kurdistan that foreign investors have contributed admittedly struggling with the formida- of this risk, the KRG aims to impose reg- Region have with their healthcare system around $195 million to 17 projects in ble task of reconstructing itself to deliver ulatory measures on the growing private is in the form of visits to government-run the Kurdistan Region’s health sector to drastically improved standards of qual- healthcare sector while ensuring the public healthcare centers (PHCCs), which date, and local investors have put for- ity and efficiency, especially in the sec- affordability of crucial health services. offer general health services in urban cen- ward another $732 million since 2006. ondary and tertiary healthcare sectors. The KRG defines the role it will play in ters and more remote areas across the from secondary health services (general The Kurdistan Region's investment law In the long-term, government officials ensuring healthcare affordability in its Kurdistan Region. Around 95% of all hospitals) and tertiary healthcare (highly also encourages medical specialists to set see this complementary system giving “Vision 2020” document, stating, “Our residents in the Kurdistan Region make specialized hospitals and emergency care) up private clinics and hospitals, as well way to healthy competition between the vision is to define and provide a package use of a network of nearly 500 of these towards primary care. This movement as pharmaceutical operations. Over the public and private healthcare industries, of basic health services to be covered by so-called “rudimentary” public health- forms part of regional leaders’ goal of next five years, the KRG hopes to attract forcing public healthcare providers and public financing and offered at each level care centers, where health problems are prioritizing preventive health services at a further $2 billion in private investment administrators to continually improve of care, and then to have people pay for first diagnosed. Kurdistan is also home the local level such as health screenings, Over the next five years, in the health sector. their services. all other services.” to around 100 hospitals, nearly half of immunizations, public safety and health which are private. campaigns, and stricter enforcement the KRG hopes to attract System Heavily Strained by Refugee Influx Regional leaders are planning to pri- of environmental standards in order to a further $2 billion in The advance of ISIS forces across Iraq governorate, which houses around 64% oritize public health clinics, which are achieve improvements in health indica- private investment in the and the violence and persecution they of the nearly 850,000 Iraqi IDPs in the often classified under the term “prima- tors and cost savings across the health inflicted on the residents of areas under Kurdistan Region. health sector. ry care,” in future government health sector. As part of this strategy, the KRG their control dealt a double blow to the In the months since, regional author- Foreign and local spending. This policy will entail shifting aims to open 165 new primary health Kurdistan Region’s health system. Over ities have battled to provide necessary government budgetary resources away centers across the Region by 2020. 1.5 million refugees and IDPs have flood- medical services to the legions of refu- investors have ed into the Kurdistan Region, drawn to gees now sheltering within the borders contributed Overcoming a Legacy of Neglect the Region’s reputation for security and of the Kurdistan Region. The KRG has In the wake of decades of underinvest- the regional government has set out to to address many of the problems stem- tolerance. Kurdistan itself has a popula- launched large-scale vaccination cam- $927 million ment, Kurdistan’s health infrastructure implement a family medicine approach, ming from insufficient and uncoordinat- tion of just 5.3 million, and the region- paigns against polio and measles in the to Kurdistan's health still exhibits many shortcomings. A streamline medical referrals so patients ed governance of the health system that al health infrastructure has struggled to refugee camps it has set up and is provid- 2012 KRG report that cited a shortage receive a coordinated course of treat- have impeded the delivery of efficient and keep pace with such a large influx of new ing free, round-the-clock health services sector since 2006. of trained physicians in Kurdistan and ment across the health system, improve effective healthcare in Kurdistan. KRG residents. to refugees and IDPs housed in them. The insufficient salaries across the entire training for health workers, and opti- authorities also seek to raise standards ISIS control of areas surrounding the Ministry of Health, wary of the poten- public health sector, and KRG officials mize channels for career advancement and expand capacity in secondary and Kurdistan Region also disrupted tradi- tial for outbreaks of deadly diseases, is have identified the need for reform in the for health professionals in order to retain tertiary care. To that end, the KRG will tional avenues for the distribution of monitoring sanitation across camps in tertiary healthcare sector in particular, more staff. Over the next five years, KRG be introducing new standards for hospi- crucial medical supplies from storage Kurdistan and carrying out public health which they concede falls short of global policymakers also plan to enhance the tal accreditation that reflect global best facilities in Baghdad, exacerbating short- education campaigns within them. The health standards. capacity of health officials to effective- practices. It has also set a goal of training ages of medicines and leading Kurdistan’s KRG continues to appeal for greater assis- The KRG has outlined a series of ly manage public health services across over 2,000 new physicians and providing Ministry of Health to appeal to the World tance from the international community medium-term objectives to reform the Region by improving planning skills, 3,200 new hospital beds across the public Health Organization for assistance in July to maintain and expand these health ser- the primary, secondary, and tertiary data collection abilities, and regulatory and private sectors by 2020. 2014. The need for international assis- vices as more and more displaced people health sectors. In primary healthcare, oversight. These measures should work tance is particularly acute in the Duhok arrive at Kurdistan’s doorstep. A 170 — Kurdistan Review Invest in Group — 171 H HEALTH

Nordic Medical Services (NMS) NMS offers medical services to compa- nies and NGOs in the Kurdistan Region. NMS has partnered with International SOS, which operates in 83 countries with Success Story 23 integrated call centers and 12,000 employees, and RMSI Medical Solutions, IIG: What is NMS's history in patients with our locally trained nurses which is a subsidiary of Dubai-based Kurdistan? and know that they are in good hands. International SOS. The company main- AA: My Swedish partner and I came here tains air ambulances based in Dubai that in February 2005, and we began working IIG: How has NMS's acquisition by bring patients from Erbil and Slemani with DNO. We started working on their RMSI affected your operations in to specialist healthcare centers around logistics and security, supporting their Kurdistan? the world, as well as 25 ambulances based in the Kurdistan Region. NMS first well in Tawke, construction of their AA: Our merger with RMSI has provid- works on the ground at oil rigs and work production facilities in Fishkabur, and the ed us six air ambulances based in Dubai, RMSI, a global integrated medical sites throughout the Region to ensure pipeline for production. We then realized which allow us to easily fly patients out if solutions provider, extended its reach the safety of workers in Kurdistan, and that we needed to branch out on our own needed. Also, because RMSI International in the Kurdistan market by acquiring is quickly expanding into preventative and saw the opportunity in medical ser- SOS has 12,000 employees, we have a sig- Nordic Medical Solutions in 2013. training and healthcare specialist training vices. We found that there was a gap in nificantly expanded number of doctors with several local partner hospitals. Andreas Ahnlund — the Region's ambulance system, and we and nurses to work with—a lot of new CEO, Nordic Medical Services decided to replicate the ambulance sys- knowledge and systems that we didn't have IIG: How would you assess the devel- IIG: Do you believe that there is still room Advisor, RMSI Medical Solutions tem in Sweden. We started very small— access to as a small independent company. opment of the healthcare system in for foreigners to come and invest here? International SOS we went to a Swedish bank and told them It has largely allowed us to increase the Kurdistan? AA: Yes, there is a lot of room for invest- that we wanted to drive an ambulance quality and breadth of our services. AA: Since 2005, development has been ment. It is a shame that still, many big Andreas Ahlund recounts NMS’s to Iraqi Kurdistan, without a contract or very quick—just like hotels, infrastruc- companies are afraid of investing in Iraq. incredible success story in the insurance. The banks were initially very, IIG: What training services do you offer ture, and other sectors. The difference Companies sometimes do not see the dif- Kurdistan Region, growing the perhaps reasonably, hesitant to lend to us. in Kurdistan? between Kurdistan now versus ten years ference between Kurdistan and the rest company from a single ambulance, Eventually we found a bank that was will- AA: What we identified was that most ago is striking. While things are still not of the country. Kurdish people recognize to a major, globally integrated ing to extend a small amount of financ- of the doctors here work at a very high perfect, the speed at which progress has that they need expertise from all around medical services provider, and ing to us, and we bought an ambulance level, but that nursing is lacking is some been made is very impressive. In health- the world, so there is significant room for discusses the ways in which NMS is and drove from Sweden to Kurdistan. We respects, especially on the emergency care, however, development can be more foreign companies to come here. I think investing in the healthcare sector’s managed to get our first contract in the side. So, we started our training programs challenging than in other sectors. It is that opportunities will continue to grow human capital. first week that we were here, working at with nursing. We have started our Pre- easy to build a nice hospital and buy the as the Region continues to develop. The an oil rig. Today we have 25 ambulances, Hospital Trauma Life Support (PHTLS) right equipment, but it takes a long time market is continuing to increase, and, as in air ambulances, more than 300 Swedish courses, which were developed by the to get well-trained staff that can work all business, we need competition. I strong- doctors and nurses, as well as roughly 45 American College of Surgeons, who gave together according to the proper proto- ly encourage more healthcare companies local staff working on oil rigs and in Erbil. approval for the course to be conducted in I strongly encourage cols. Education is something that cannot to come and invest here. As oil produc- Kurdistan for the first time. We conduct- more healthcare just be bought—it will take more time tion and monetization takes off here, the IIG: Do you have any non-oil and gas ed the program initially with a crew from and effort to develop properly educated standards will grow higher and higher, and clients? the West Erbil Emergency Center, Rizgari companies to come staff for the healthcare system here. It is there will be increased demand for medical AA: Yes, we have a few non-oil and gas Hospital, and the EMC Cardiac Hospital. and invest here. As happening, but it is necessarily a much services. More companies are beginning clients. Nokia and Siemens, for exam- So, for a week, we brought in certified slower process than making buildings to provide competition for us, including ple, have partnered with us. However, oil instructors and conducted pre-hospital oil production and and equipment. International companies a local company. Of course, we maintain and gas have been our most natural cli- training. For example, if there is a car monetization takes off are coming here and prioritizing capacity a good relationship with them—there are ents, because they have a large number of accident, we taught things such as how building and development of knowledge. clients for all of us in this huge and fast employees that work in isolated and some- to immobilize a victim and take care of here, the standards The MNR is doing an excellent job in growing market. However, companies can- About times dangerous situations. We have also the spine. We have become very good at this regard, by making capacity building not just come here and sell goods or equip- Andreas Ahlund is the founder and will grow higher and CEO of Nordic Medical Solutions (NMS). developed a very good relationship with the medical services that happen outside part of the production sharing contracts ment, for example. Companies that want to After serving seven years as an officer in the Ministry of Health. Through this part- the hospital, and much can be achieved higher, and there will (PSCs) with oil companies that come thrive here must stay, train locals, and pro- the Swedish army, Ahnlund established nership, we have been training local nurs- if patients are treated in the proper way be increased demand here. All said, however, staffing is still our vide services for whatever equipment they NMS in 2005 by driving an ambulance es. We bring in instructors from Sweden directly after a car accident rather than biggest challenge, as medical competence bring in. If you want to be successful here, from Stockholm, Sweden to Erbil. and provide training so that we can leave waiting to get the patient to the hospital. for medical services. takes a long time to develop. you must have a long-term presence. A 172 — Kurdistan Review Invest in Group — 173 H HEALTH Lifting the Baseline Innovative Approach

IIG: What innovations is FMC bringing also target Europeans or Americans who IIG: What new elements, technologies, About to the health sector in Kurdistan? are interested in joining FMC on a tem- or standards is KCH bringing to this Dr. Rang Shawis graduated from the FP: Despite recent development in porary or permanent basis. Our primary market? University of Mosul in 1973. In 1975 he the sector, after 40 years of neglect in goal is to be a center of excellence, and, RS: The current options for children’s settled in the UK and trained in pediatric Kurdistan and Iraq, the healthcare sys- as our reputation as such grows, it will healthcare in Kurdistan are limited. The surgery. He has been a Consultant tem still needs significant improvement. become easier and easier to attract experts fact that there is no integrated prima- Surgeon and Senior Lecturer for over 25 years in the UK and UAE, and has FMC wants to correct this situation—to and specialists to practice at the hospital. ry, secondary, or tertiary care available published over 50 articles. raise the baseline standards of healthcare means there is also a lack of specialized provision across the country. The breadth IIG: What efforts is FMC making neonatal and childhood healthcare. and magnitude of services that FMC can towards the localization of your staff? Antenatal diagnosis and management provide reach far beyond Slemani; we are FP: The owner of FMC, Faruk Rasul, are also lacking, and there are no fetal designed to serve all of Iraq. We hope that, is very keen to invest in and give back maternal specialists. The result of this Dr. Firya Peryadi — by offering world-class medical services to the community, and is very eager to Dr. Rang Shawis — is that many patients go to neighboring Chief Medical Officer, to the country, our systems, processes, increase local staff while maintaining the Chairman, Kurdistan Children’s countries or Europe for treatment, which care are adhered to. This is necessary to Faruk Medical City (FMC) standards, and innovations will be emu- hospital’s quality. Our strategy is to work Hospital (KCH) can be very costly, both emotionally and ensure the high quality of care provided. lated by others, thereby improving the closely with nursing and medical schools financially. With the KCH, we are try- Dr. Firya Peryadi discusses the entire system. in the Kurdistan Region; we have already Dr. Rang Shawis provides ing to address some of these deficiencies IIG: Can you tell us about the partner- ways in which FMC is reshaping had very productive discussions with the insight into the state of pediatric and provide specialized health teams to ships that KCH has with foreign health- the Kurdistan Region’s healthcare IIG: To what degree has staffing the hos- deans of these schools. Once we are firmly healthcare in Kurdistan and the improve the current healthcare options. care and donor organizations? system and provides insight into pital been a challenge? established, we will begin to hire recent ways in which he hopes KCH We are trying to bring pediatric health- RS: Our relations with UK-based health the regional health sector’s future. FP: Over the past two years, we have graduates of these programs very early will serve as a model for further care options into line with international organizations, such as the Sheffield worked very hard to hire well-qualified in their careers to work alongside our development and improvement in healthcare standards, thus minimizing Children's Hospital, the royal colleges, experienced doctors, nurses, and techni- the Region's healthcare sector. the need to go abroad for treatment. and professional organizations, such cians, to teach them the correct process- as the British Association of Paediatric es, procedures, and norms of a premier IIG: What have been some of the major Surgeons, will help to maintain high hospital– a bit like a residency program. challenges to opening KCH? How did standards of care through regular visits, Eventually, they will be integrated into the KCH address these challenges? training, and quality control processes. standard, full-time staff at the hospital. RS: Lack of specialized skills is a major In order to achieve our stated mission, challenge in Kurdistan, especially with we need to strengthen these relations. IIG: How do you see healthcare in the nursing and specialized surgical skills. Individual donors and organizations will Region evolving in the medium-term? We intend to provide training to upgrade find a worthwhile partner in Kurdistan FP: Healthcare in the Region is starting the skills of our local staff. However, to Children’s Hospital. from a very low base. As with many sec- jumpstart KCH, we are employing spe- tors in Kurdistan, development is pro- cialized nurses from abroad. We will also IIG: How do you foresee the evolution gressing quickly. Healthcare is very much be relying on specialized clinicians and of the healthcare sector in Kurdistan in a part of this progression, but in many surgeons, primarily from the UK, as vis- the medium term? ways it is still not up to par. The KRG iting teams to provide clinical services, as RS: Despite the challenges and the dif- nurses to work here for long timeframes. has targeted healthcare, in particular, for well as training and education opportu- ficulties, I am optimistic that there will Our nurses all have university degrees improvement and growth. In terms of nities for the local staff. be major improvements in the health- from nursing colleges, master's degrees, that development, I think that FMC will care system in Kurdistan in the medium We hope that, by or specialty degrees, as well as years of be a leading model for others to follow. IIG: What are some of the major chal- term. One of the priorities of the KRG is offering world-class experience in nursing. As such, we have Additionally, we will continue to invest lenges facing Kurdistan’s healthcare to improve the healthcare system through hired nurses from all over the world, and heavily in expanding and deepening our IN NUMBERS system? radical reform and providing the funds medical services to the we have developed an excellent nursing services. For example, we have plans RS: The major challenges are the lack to achieve tangible reforms in the quality country, our systems, staff. The case is similar with technicians; to develop a fully integrated oncology 4 Years of regulatory infrastructure, established and the scope of the healthcare available. I we have found the most qualified techni- department behind our current hospi- Conception to Opening standards, and mechanisms for enforcing am sure that the current situation, where processes, standards, cians from around the world and brought tal. This sort of investment is absolutely these standards. KCH will have an in-ser- patients often go abroad for treatment, and innovations will be them here. Many of the doctors, who necessary for the Region and Iraq. Access vice education center and will provide will decrease as high quality care becomes moved abroad, studied and worked in to quality healthcare truly affects all of $65 million training to meet international standards available within Kurdistan. Our hospital Capital Expenditure emulated by others, Europe or the US, are now coming back us, socially and economically. Currently of care. The Hospital will have an organi- will have contributed to this improve- thereby improving the to rebuild their country. To hire experts those who can afford to go abroad for zation to manage clinical risks and make ment through the setting of standards and specialists, we plan to draw initially healthcare do, which is costly and prob- $15 million sure that policies and procedures to pro- and its role as a benchmark for other entire system. on the Kurdish and Iraqi diaspora, but lematic. FMC relieves that need. A Operating Costs vide the highest and safest standard of hospitals. A 174 — Kurdistan Review Invest in Group — 175 TOURISM AL SAFADI THE REVIEW VIP Room Tourism

Ready for our SECTOR special guests AT A GLANCE

$3 Million Total Investment

Over $1 Billion Revenue (Target: 2016)

Contribution 7% to GDP 90+10O (Target:2017)

101 Total Projects

380 Bold Plans Hotels With the KRG's desire to see the tourism industry become a significant contributor to GDP, the sector has come to offer plenty of opportunities for investment. he Kurdistan Region, with a diver- of the foreigners that visit the region, in Occupancy 35% sity of both landscapes and cul- turn, do so for business reasons. Erbil Rates (2014) Ttures, looks to raise its profile as dominates as a destination for interna- 65+35O a tourist destination. In 2013, nearly 3 tional travelers, racking up nearly three million visitors came to Iraqi Kurdistan, times as many visits as either Slemani or a 30% increase from the previous year. In Duhok in 2012. 100th street, Erbil, 2007, by comparison, Kurdistan’s General Tourism is slowly beginning to play 7 million Board of Tourism (GBOT) recorded just a larger role in the Kurdish economy. Kurdistan - Iraq 377, 397 visitors to Kurdistan. The vast Overall, the industry supports more than Tourists Reservation: majority of travelers in the Region in 6,000 jobs. It was the source of $1 billion +964 7505989898 (Target: 2025) recent years, around 66%, have come in revenues for Kurdistan in 2013, a 53% [email protected] from elsewhere in Iraq, while locals increase over total tourist revenues in 2012 engaging in internal tourism accounted ($650 million). Since 2006, local and inter- for nearly 14%, and international visitors national investors have poured $6.58 bil- made up another 20% of travelers. Most lion into the Region’s tourism industry.

Invest in Group — 177 T TOURISM

UNESCO’s World Heritage Committee has named the Erbil Citadel to its list of World Heritage Sites after 18 of the Committee’s 21 members voted to approve its application. The Citadel is one of the oldest inhabited cities in the world, with a history that stretches 6,000 years.

Around 40% of that total has come from foreign investors, mainly those in the UAE and Turkey. In recent years, the pace of for- eign investment appears to have increased. In 2013, Kurdistan’s tourism sector drew $3.2 billion in foreign investment. Regional authorities have channeled these investments into at least 128 official- ly licensed projects in the tourism sector. Erbil has dominated tourism investments Growing Recognition with 71 projects licensed since 2006 and Erbil serves as the face of the Kurdistan Hospitality Industry a total investment of around $4.47 bil- Region for most international travelers. Kurdistan is now home to over 380 hotels, Rotana and Divan strengthen programs lion. The Duhok governorate was home The city has grown at a breakneck pace and $1 billion in private investment has to hire and train local talent for key to 41 licensed tourism investment proj- over the last decade and its combination The last year also saw Kurdistan gain been committed to further develop the roles in their business. Divan Erbil, for ects valued at nearly $723 million over of history, security, and economic growth important international recognition regional hospitality sector. Erbil boasts instance, has implemented a formal train- the same period. Although the Slemani have been attracting attention across and support for its cultural patrimony. Kurdistan’s two internationally certified ing program to prepare local employees governorate saw just 16 licensed tourism the Middle East. National Geographic Erbil’s landmark Citadel was officially five-star hotels, the Erbil Rotana and the for positions in hotel management as well investment projects in that time, the total Magazine named Erbil as one of its added to UNESCO’s World Heritage List Divan Hotel. International brands such as service-oriented positions in reception, value of investment in the tourism sector “Best Trips” of 2014. In addition, the during a June 2014 meeting of the orga- as Radisson Blu, Sheraton, Kempinski, housekeeping, and restaurants. Leaders there actually surpassed that of Duhok Arab Council of Tourism chose Erbil nization’s World Heritage Committee in and Hilton have also set their sights on in Kurdistan’s hospitality industry have at $1.39 billion. One of the most visible as its “2014 Arab Tourism Capital,” and Doha. Members voting in favor of World the Region. emphasized the importance of training to tourism projects in Kurdistan this year the city has held numerous public events Heritage status for the structure cited its Overall, however, the hospitality address a local skills gap and the develop- Leaders in Kurdistan’s was the newly opened Korek Mountain throughout the year to mark the occa- nearly 6,000 year history and its signifi- market in Kurdistan is dominated by ment of English language skills in order Resort, a $95 million venture that aims to sion. The first annual Erbil Film Festival cance as one of the world’s oldest contin- three-star hotels. Much of the industry for the Region to truly compete with the hospitality industry draw winter sports enthusiasts across the took place in 2014. Other events marking ually inhabited settlements. The Citadel continues to function without an eye to region’s business and travel destinations. have emphasized the Middle East to Kurdistan. Erbil’s turn as Tourism Capital included joins three other Iraqi sites on the World international standards, and innovators Despite the array of challenges that importance of training to The KRG has ambitious plans to trans- painting and photography exhibitions, Heritage List. in the sector are working to erase a stig- recent regional upheaval and the cor- form Kurdistan into a travel destination concerts, and the Hawler Festival mark- In an effort to preserve the Citadel, ma of sorts that has developed around responding economic slowdown have address a local skills gap and hopes to attract 7 million tourists ing the Kurdish new year, Newroz. the High Commission for Erbil Citadel the idea of working in hospitality. In the posed for Kurdistan’s hospitality sector, and the development of annually by 2025. KRG leaders have laid Passenger numbers at Erbil Revitalization (HCECR) has been formed words of Erbil Rotana GM Ghassan Dalal, many in the industry are optimistic about English language skills in out plans to improve Kurdistan's road International Airport (EIA) highlight a to oversee a 15-year plan to refurbish and “The Kurdish community is not yet well Kurdistan's medium-term potential. Erbil infrastructure to facilitate travel across steadily increasing amount of interna- restore the Citadel itself, as well as the exposed to the hospitality industry. There Rotana GM Ghassan Dalal is among those order for the Region to the Region. The regional government tional travel to the regional capital. Over residential structures built atop it over have been small hotels in the Region for with a bullish attitude about the hospitality truly compete with the has also been trying to spur development the course of 2013, a record 1.2 million time. According to HCECR officials, the quite a long time– unfortunately the rep- industry’s future, saying, “I believe that region’s business and of Kurdistan’s tourism infrastructure passengers passed through EIA, over 90% KRG has spent $35 million on restoration utation was not so good, so voices saying within the next year and for many years through a program of small and medi- of whom were traveling internationally. and preservation efforts since 2011. KRG it was not such a great career grew within to come the growth of demand for hotels travel destinations. um-sized loans for 400 projects running Over the 2006-2013 period, passenger officials are also evaluating the potential the Kurdish community.” is going to be much higher. I believe the through 2025. So far, the program has traffic into EIA increased at an average for public-private partnerships to finance This legacy is slowly being overcome industry itself is going to at least double the allocated around $86 million. rate of 28.2% per annum. ongoing and future preservation efforts. as high-profile international hotels like amount of rooms currently in Erbil.” A 178 — Kurdistan Review Invest in Group — 179 T TOURISM

Home Away from Home Check In & Enjoy

IIG: What are your first impressions values ensure that our brand is delivered IIG: How would you define the concept with heaters. We will also be building an regarding Erbil and the hospitality with consistency and integrity. We call it behind Divan Erbil? outdoor swimming pool, which we are industry in Kurdistan? Rotana L.I.F.E, where L stands for long- MK: Divan is known in Turkey as a good lacking at the moment. GD: Kurdish people are extremely hos- term, I for innovation, F for friendly, and hotel brand. We at Divan Erbil are striving pitable. They simply make you feel at E for ethical. The local market responded to be a five-star international business IIG: What is your staffing policy? home and leave you with a clearly posi- positively to our job openings. It is true hotel. Business means catering to what MK: We tell people that this is a nice, tive impression. I believe that within the that our staff lack experience in this field, the business traveler wants. We have large safe place to work with more freedom next year and for many years to come, but they have exhibited strong capabili- guest rooms, meeting rooms, two ball- compared to other destinations that have the growth of demand for hotels is going ties and a willingness to learn and adapt rooms, break-out rooms, several bars, more restrictions. We are paying high- to be much higher. The industry itself is to the 5-star environment. I think we are choices of restau- er salaries than in going to at least double the amount of among the few companies with foreign rants, a fitness the Gulf to over- rooms currently in Erbil. There are huge investments that have managed to recruit center and indoor come the percep- Ghassan Dalal — prospects for the hospitality industry in and maintain a large number of locals. Martin Kolb — pool, and– as of I have been speaking tions that come General Manager, Erbil Rotana Kurdistan. We are witnessing many hotel General Manager, Divan Erbil next summer– with being in Iraq. projects all over the Region that are being IIG: Rotana is looking to manage a sec- a large outdoor to the Ministry of I have been speak- IIG talks to Ghassan Dalal about his planned at the moment and will be com- ond property here in Erbil. Can you tell Martin Kolb explains Divan Erbil's pool area. We Education about ing to the Ministry priorities as General Manager, the pleted by 2016 or 2017. By the time these us about this hotel? concept of hospitality, his staffing have an average of of Education about new Arjaan development for long- projects are completed, the market will GD: We have a strong belief that the policy, and the hotel's future 40 square meters introducing a hotel introducing a hotel term stays, and why he believes have grown significantly, keeping every- Kurdistan Region will flourish within projects. per room, and training program for training program Kurdistan will thrive in 2015. one busy and on their toes. the next few years, and that there is going 30% of our rooms for local people. to be high demand for both hotels and are suites. Some local people. There There would be a IIG: Do you have any strategy for local furnished apartments. This idea is still have kitchens, so would be a one-year one-year program human capacity development? fresh and one of a kind, whereas the need they are like ser- and a two-year GD: A core value for Rotana is devel- for it is imminent. Arjaan is new in the viced apartments. program and a program. After oping from within, from the local com- market and contains studios, as well I define our hotel two-year program. training for one munity. Our main as one-bedroom as very much dedi- month in every focus is seeing and two-bedroom cated and geared to department and Kurdish people apartments. It will the international business traveler, with getting to understand the concept behind being developed cater to long-stay a twist on Turkish hospitality, Kurdish the hotel in the one-year program, there and involved more We have a strong belief guests coming mentality, and a European hotel man- would be a guaranteed job with us as a within the indus- that the Kurdistan for over a month agement background. normal employee – a waiter, receptionist, try. We constantly who need hotel or a housekeeper. In the two-year pro- hire local talent, Region will flourish services, but in an IIG: What projects do you have planned gram, they would be trained two or three and we are intensi- within the next few apartment setup. in the short term? months in every department, in addi- fying our training The Arjaan con- MK: We opened a new spa with a large tion to training in accounting and sales. and development years, and that there cept will be an fitness center, a Turkish bath, a steam After the successful completion of those to see them prog- is going to be high added value to the bath, a sauna, and a 20-meter long indoor two years, we would guarantee them a ress. The Rotana Kurdistan Region. swimming pool. It is indeed very luxu- supervisor job. careers website has demand for both It is already under About rious. We have opened a ballroom for successfully gener- hotels and furnished construction and Martin Kolb has over 20 years of 900 people and added four more meet- IIG: What challenges do you see in the ated a solid data- expected to open experience in international travel, ing rooms, for a total of twelve meeting Kurdish market? About base of potential apartments. within a year. tourism, and the hospitality industry. rooms in brand new condition. We also MK: The main challenge is training staff. Rotana announced the candidates for us, Arjaan is owned by Prior to joining Divan Erbil, Kolb held have a new steak house. We are going to We have local staff applying, but they are appointment of Ghassan Dalal several management positions in R which has helped us in the process. Our the same company as the Erbil Rotana, redo our 21st floor Asian restaurant with not trained in the hotel business, so they as the new GM of its Erbil hotel Hotels, Kempinski, Radisson, Golden in August 2014. Dalal is a Lebanese HR networking and research, in addi- Malia Group, which is also extremely Tulip, Holiday Inn, Sheraton, Wyndham, terraces overlooking the city. There will apply to become a driver, a bellboy, or veteran of the international hospitality tion to the Learning & Development active with plenty of projects in Slemani. Coral Beach Resort, Kuoni, and also be a bar with a huge terrace on one to work in security. These are all jobs industry with over twenty years of Department, have also played a role in Malia Group has been helping the United Airlines. He studied Business side of the 23rd floor, and we will have where it is not necessary for you to have experience, including work in Canada, employee morale and career development, Kurdistan Region flourish for many years Administration and speaks three Erbil’s highest shisha lounge on the other hotel experience. Some applicants cannot Egypt, Lebanon, Nigeria, and Sudan. as well as sustainability. Our company’s and continues to strive for excellence. A languages. side. It will be enclosed by glass in winter speak English, which is a big issue. A 180 — Kurdistan Review Invest in Group — 181 THE GUIDE THE GUIDE Kurdistan Region

Time Zone GMT +3 Business Hours Country Code +964 Sunday – Wednesday 09:00 – 16:00 Thursday 09:00 – 14:00

Population: 5.3 Million

Weather Geography The summer months are The Kurdistan Region, dry and hot. Temperatures which borders Syria to the often reach as high as 48C west, Turkey to the north, and during the summer. The winter Iran to the east, comprises a total months are generally cold area of 40,643 km2. Kurdistan and rainy, with average features plentiful rivers and temperatures ranging prominent mountain ranges, from 5C to 13C. with an average elevation of 2,400 meters.

Demographics General Board of Tourism ATM & Credit Card The Kurdistan Region is composed One of the best digital sources for Modern banking is only in of an ethnically diverse populace detailed information about tourist its infancy in Kurdistan. As that includes Kurds, Arabs, Assyrians, sites is the website of the General such, ATMs can be difficult to find. Chaldeans, Turkmen, and Armenians. Board of Tourism. The Board has also Additionally, most hotels receive The population of the Region is produced a mobile app for tourists commission from credit card skewed young, with 36% aged 0-14 visiting the Kurdistan Region. payments. Some of the larger hotels years and only 4% over the age of and shopping malls house ATMs, as 63. The median age is just over 20. Religion do more recently constructed banks. The majority of Kurds are Sunni Language: Muslims. There are also multiple Mobile Operators: Shoresh Street, Lbc Center, Erbil, Iraq Kurdish, Arabic, Turkmen Christian sects including Syrian Asiacell, Korek, Zain Tel: 0750233 4444 Catholics, Syrian Orthodox, and Traffic Flow:Right Assyrians. Electrical Appliances: 220V. [email protected]

Invest in Group — 183 *Health Warning: Smoking is a main cause of lung cancer, lung diseases and of heart and arteries diseases. G THE GUIDE

Diplomatic Missions Basic Expressions Visa Austria: +962 (0) 6 462 4304 English Sorani Kurmanji Citizens of the US, Canada, Australia, New Zealand, Turkey, Belarus: +964 (0) 750 445 0973 Hello Rozh-bash Rozh-bash and EU countries are issued free, 15-day visa stamps upon Brazil: +964 (0) 750 446 7906 Good morning Beyanee-bash Beyanee-bash Be kher bi arrival in the Kurdistan Region. Other nationalities are Czech Rep.: +964 (0) 66 254 7983 Welcome! (on arrival) Be kher bi(t) Be kher hati Supas! required to get a valid “Iraqi” visa from their local Iraqi diplomatic Denmark: +964 (0) 66 264 8299 Goodbye Khwa-hafees Khwa-hafees office. KRG Representations abroad do not issue Iraqi visas. Travelers Thank you Supas Supas Egypt: +964 (0) 66 210 1730 Supas! wishing to remain in Kurdistan for a period longer than 15 days You’re welcome Ser chaw Ser Chaava are required to visit an immigration office to obtain the necessary France: +964 (0) 66 257 3583 How are you? Chonee? Chaawani? documentation. The entire process can take up to four hours to Germany: +964 (0) 750 790 7909 Are you well? Bashee? Bashee? Rozh-bash! complete. Companies may expedite the visa application process by Greece: +964 (0) 770 640 8848 I’m fine, thank you Bashem, supas Bashem, supas registering a new employee with Iraqi authorities and applying for all Iran: +964 (0) 66 222 2444 What’s your name? Naw-et cheeya? Nav-ey ta cheeya? necessary permits on behalf of the individual prior to his or her arrival Italy: +964 (0) 770 144 9000 My name is John Naw-em John-ah Nav-ey min John-ah Ser chaw in Kurdistan. japan: +964 (0) 66 257 3661 Please Zahmat Nabe Bey Zahmat jordan: +964 (0) 750 811 4442 Where is the bazaar? Bazaar le chweya? Bazaar la kidareya? Korea: +964 (0) 750 793 4501 Where is the Hotel? Otel la chweya? Otel la kidareya? Airports Netherlands: +964 (0) 750 198 7002 Yes Aa / Balay Aa / Balay Erbil International Airport (EIA) Palestine: +964 (0) 750 881 5420 No Na Na Slemani International Airport (SIA) Poland: +964 (0) 750 173 4346 OK Bale Bale/Arey

Romania: +964 (0) 66 224 6715 Airlines Flying to Kurdistan Russia: +964 (0) 750 134 8674 Air Arabia, Air Berlin, Air Olympic, Al-Naser, Aseman Airlines, AtlasJet, Hospitals Pharmacies Banks Slovakia: +964 (0) 750 445 7412 +++++++++++ Austrian Airlines, Azmar Airlines, Caspian Airlines, Cyprus Airways, PAR Hospital Pharmacy One Emergency BankMed Spain: +964 (0) 750 630 0503 60m St., Erbil Bakhtiyari St., Erbil T: +964 (0) 66 2579777 Egypt Airlines, Emirates, Etihad Airways, FlyDubai, FlyGeorgia, Georgia Services Airways, Germania Airlines, Gulf Air, Hermes Airways, Iraqi Airways, Sweden: +964 (0) 770 045 9530 T: +964 (0) 66 210 7001 T: 0750-330-5888 Lufthansa, Mahan Air, Middle East Airlines, Olympic Airlines, Pegasus Turkey: +964 (0) 66 224 6233 Police: 144 / 124 / 104 BBAC Bank Airlines, Qatar Airways, Royal Falcon Airlines, Royal Jordanian, UAE: +964 (0) 66 224 6710 Azadi Hospital Hawler Pharmacy Ambulance: 122 T: +964 (0) 66 2574300 Transavia, Turkish Airlines, Viking Hellas, ZagrosJet UK: +964 (0) 750 722 8178 Nakhosh-Khana St., Duhok 60 Meter St., Erbil Fire Station: 066115 USA: +1 240 553 0590 T: +964 (0) 627224074 T: 066-223-6633 Byblos Bank T: +964 (0) 66 2560017 International Hospital Dental Care English News Media Upon Arrival Public Holidays Salim St., Slemani European Dental Center Rudaw News İş Bank There are two main ways for a traveler to get from Erbil 1 January – New Year’s Day T: +964 (0) 770 384 4040 Bakhtiyari St., Erbil www.rudaw.net/english T: +964 (0) 66 2100546 International Airport to a destination in Erbil. The longer 6 January – Army Day T: 066-210-0251 (but cheaper) route involves new arrivals taking an airport 5 March – Uprising Day English Radio Kurdistan bus to a separate terminal, where passengers may then bargain with 11 March – Liberation of Erbil City Babylon FM – 99.3 FM International Bank taxi drivers for a fare usually between 5,000-10,000 IQD. The more 14 March – Mustafa Barzani’s Birthday Handy-man Travel Agency T: +964 (0) 66 2239149 direct (and expensive) route is to book a private taxi for approximately 21-23rd March – Nawroz (Kurdish New Erbil Maintenance Laru Travel Rental car 25,000-30,000 IQD. “Hello Taxi,” a local company, has an agreement Year) erbilmaintenance.com Divan Erbil Hotel Europcar North Bank with the airport that allows its vehicles to access the terminal directly. 9 April – Baghdad Liberation Day T: 0750-455-4411 Italian Village, Erbil T: +964 (0) 7702138349 Vehicles can be booked in advance via the company's website or by 1 May – Labour Day House Cleaning T: 0750-737-2288 waiting in line outside the main arrival/departure terminal. 14 July – Republic Day My Flavor Catering Grocery Stores Currency Exchange 25 December – Christmas Day Ainkawa, Erbil Carrefour Avis There are formal currency T: 0750-203-9337 Family Mall, Erbil Divan Hotel, Erbil exchange centers at Taxis Religious Holidays myflavorcatering.com T: 0750-522-4986 airports and modern Taxis in Kurdistan do not have meters. Instead, passengers The dates for the holidays listed below Holland Bazaar shopping facilities in and a driver must agree on a price prior to departing for a are based on the Muslim calendar, and Dry-Cleaning English Village, Erbil Logistics Kurdistan. However, destination. Taxis are readily available on most major roads therefore change each year. Comfortable Dry-cleaning Aramex informal exchange booths in all large cities in Kurdistan. Rides within cities normally Dream City, Erbil Food Delivery Ankawa, Erbil in the traditional bazaar cost somewhere between 5,000-10,000 IQD. A private taxi between • Mouloud (Prophet Mohammad’s T: 0750-861-9944 B2B Restaurant T: 066-225-2299 areas offer more favorable any of Kurdistan’s three major cities will cost between 120,000- Birthday) T: 0750-814-1444 rates. 150,000 IQD. There are generally two types of taxis in major cities: • Eid-al-Fitr (End of Ramadan) Post Office DHL those painted in white (private drivers), and others painted in a light • Eid-al-Qurban PelePost Hardware Store 5 Khabat Street, tan color (government vetted drivers). The latter are generally newer • Muharram 30 Meter Street, Erbil Ace Hardware Ankawa, Erbil Currency and safer options. • Ashura T: 066-222-3222 aceiraq.com T: 0790-190-9519 $1= 1,200 IQD

184 — Kurdistan Review Invest in Group — 185 G THE GUIDE

Erbil— Slemani— The beginning of life in Erbil is Nicknamed the “cultural capital” of associated with the creation of the the Kurdistan Region, the modern historic Erbil Citadel, which has been city of Slemani was founded in continuously inhabited since at least 1784. Today, it is well known for 6000 BCE. The Citadel, which sits its open, relatively liberal, and atop a plateau and is designed in tolerant society, as well as being a circular shape, has inspired the a center for culture and learning. development of the city as a whole, The city boasts a population of which forms increasingly large, approximately 1.9 million inhabitants concentric rings expanding out from and is expanding at a rapid the structure. The size of the city pace. Prior to 2003, the city was has expanded dramatically in recent contained within a 60-kilometer years as its population has grown ring road. Since then, however, rapid from 500,000 in 2004 to 2 million urbanization has led to residential in 2012. This rapid development has and commercial development strained Erbil’s existing infrastructure, beyond this area. Without the benefit particularly its road networks and of a development master plan, sewer systems. The considerable this growth has resulted in urban amount of infrastructure sprawl. A master plan has since development that has taken place been implemented and is designed within the capital over the past few to improve functionality while years has somewhat alleviated these supporting projected population issues, though. growth. As such, Slemani currently has the capacity to accommodate its projected five-year population growth without the need for additional horizontal expansion.

Duhok— The modern city of Duhok has historically served as a bridge to the Region’s most strategically significant neighbor: Turkey. The city, which is home to approximately 1.3 million residents, has a comprehensive master plan that will guide development through 2032. The plan itself calls for a phased approach to address current and future issues, particularly the need for urban rehabilitation and infrastructure improvement. Duhok’s proximity to the Tigris River (and the scenic mountain ranges that frame the waterway) make it ideally suited for Kurdistan's developing tourism industry.

186 — Kurdistan Review Invest in Group — 187 G THE GUIDE Where to stay

Rotana Erbil Tangram Hotel Erbil Rotana Erbil has been named “Iraq’s Located in Erbil, the Tangram hotel Leading Hotel” for 2012, 2013, and has emerged as a favorite destination 2014. The hotel features 201 lavish for business travelers in the Kurdistan rooms and suites, five food and Region. Each of the hotel’s 118 rooms beverage outlets, a grand ballroom, features a comfortable bed, a flat five small meeting rooms, a health and screen TV, a working desk, and a wellness center, and multiple luxury spacious bathroom; high-speed boutiques. The hotel’s dining options Internet and a lavish breakfast buffet (notably Basilico, Italian restaurant, are included at no additional charge. and Al Bustan, which offers authentic The Tangram also offers multiple Lebanese cuisine) are known gourmet dining options, and the most throughout the surrounding region. well appointed gym in Erbil. Tel: +964 66 210 5555 Tel: +964 66 229 6900

Jouhayna Hotel The Jouhayna hotel offers the specialized service and attention to detail that only a smaller, more intimate facility can. The majority of the rooms are suites that include a bedroom, living room, dining space, and balcony. In addition, the hotel features Sidon (a Lebanese Divan Erbil restaurant), a breakfast buffet, and The 24-story Divan hotel features 227 modern spa and gym facilities. guest rooms, ten meeting rooms, five Tel: +964 750 7120777 restaurants, four up-scale boutiques, a cigar lounge, multiple bars, a gym, and a spa. The hotel seeks to redefine The Grand Millennium The Copthorne Hotel Baranan the business experience with its well- The Grand Millennium offers 253 guest rooms, 55 luxury The Copthorne Hotel Baranan offers the finest hotel appointed rooms, gourmet dining suites, 7 executive suites, and a presidential suite. The and dining options for visitors to the city of Slemani. options, luxurious décor, and spacious hotel offers large conference facilities, a grand ballroom The facility’s 78 luxury rooms and suites are finished meeting areas. For its efforts, the World that accommodates 750 people, and an auditorium with contemporary décor and modern luxuries, and its Travel Awards named the Divan “Iraq’s that seats 350 people. The hotel has an indoor/outdoor four stylish restaurants offer a variety of both local and Leading Business Hotel” for 2014. swimming pool, a gym, and a spa. international cuisines. Tel: +964 66 210 5000 Tel: +964 770 700 0000 Tel: +964 770 6000000

188 — Kurdistan Review Invest in Group — 189 G THE GUIDE Where to eat Al-Safadi: Highly Recommended The Al-Safadi brand is one of the foremost international fine dining establishments in Kurdistan. Al-Safadi, known to customers in Dubai for its Lebanese cuisine, opened in Erbil in October 2013. The restaurant has the capacity for nearly 600 guests and boasts VIP rooms, as well as a large, landscaped garden that can accommodate around 360 diners. From an original core of 40 international staff, the restaurant has grown to employ around 120 workers. Al Bustan Qi 21 To win over local customers and the expat Al Bustan brings authentic Lebanese cuisine, When people think about the Kurdistan community alike, Al-Safadi utilizes a detail- entertainment, and atmosphere to its Region, sushi isn’t usually one of the first oriented approach that tries to combine a customers in Erbil. The restaurant features things that comes to mind. However, that may focus on food with an emphasis on things indoor seating as well as outdoor dining be changing thanks to the delicious offerings like the restaurant environment, the manner areas surrounded by pools and gardens. currently being served up at “Qi 21,” a Japanese in which customers are greeted and served, The Al Bustan menu includes a variety of sushi restaurant located on the 21st floor of the and the value of its cuisine for the price guests cold appetizers, salads, hot mezzes, grilled Divan Hotel. Dining service begins at 6:00pm pay. As the restaurant industry in Kurdistan meat platters, seafood entrees, and regional and runs until 11:30pm, with bar service until becomes more saturated, Al-Safadi looks to desserts. Dinner service commences at 19:00 12:30am. this holistic focus on customer satisfaction to and extends until 23:30, with lunch offered on Where: Divan Erbil Hotel set it apart. Al-Safadi is open all week from Friday from 12:00 to 16:00. Tel: 066-210-5000 10:00 AM to 11:30 PM. Where: Erbil Rotana Hotel Where: 100 Meter Street, Opposite Baharka Tel: 066-210-5555 Road, after Ankawa traffic light, Erbil Tel: 0750-598-9898

Chopin Bar Basilico Chopin Bar has the rare distinction of being Basilico is the first Italian restaurant in Erbil Chalak’s Place DC Steakhouse both an excellent meeting location and a offering authentic Italian cuisine in a modern Those looking for excellent food and local The DC Steakhouse has clearly raised superb late night destination. During the day, setting for an ideal experience. The restaurant charm outside of Slemani’s international hotels standards for premium international dining in Chopin features a variety of lighter dining introduces the various cuisines from Italy are urged to try Chalak’s Place. Mirroring the Erbil. The restaurant’s elegant and comfortable selections. In the evening, the space transforms through its wide range of famous appetizers, east/west dynamic of its décor, the restaurant décor, coupled with excellent steaks and side into a lively jazz bar featuring live music, with a antipasti, soups, Panini and pastas in addition fuses Italian and Kurdish cuisines. The cafe dishes, and a broad range of drinks, make the wide variety of the finest imported beverages to a well-designed desserts menu. offers some of Slemani’s best pastries for DC Steakhouse unique, even amid the ever- available for selection. Chopin begins service at Where: Rotana Erbil breakfast, salads, pizzas and pastas for lunch, broadening range of dining options now found 11:00am and closes at 1:00am. Tel: 066-210-5555 and Italian and Kurdish entrees for dinner. in Erbil and Kurdistan. Where: Divan Erbil Where: Salim Street, Saholaka, Slemani Where: Dream City, Erbil Tel: 066-210-5000 Tel: 0770-151-2976 Tel: 0750-138-8377

190 — Kurdistan Review Invest in Group — 191 G THE GUIDE Life Health & Wellness

Casa Del Habano Erbil Cigar Brands Available at Casa Since opening in 2013, Casa Del Habano has Del Habano Erbil: been the main center of attraction for cigar Bolivar aficionados in Kurdistan. As the sole provider Cohiba of Cuban cigars in the Kurdistan Region and Cuaba Iraq, Casa Del Habano Erbil is the only one- Diplomaticos stop-shop for cigar lovers. The shop offers an Fonseca extensive collection of Habanos, coupled with a Hoyo De Zen the Spa wide selection of various limited edition Cuban Monterrey Zen the Spa provides cigars. You can also find all kinds of cigar Juan Lopez Fitness Time premier therapeutic H. Upmann accessories, including humidors, lighters, cigar Located on Kirkuk Road in Erbil, the Tangram treatments offered by Montecristo cutters, and ashtrays. You can visit the shop Partagas Hotel has already established itself as one certified spa therapists. between 10.00am-8.00pm any day except Punch of the premier hotels in Kurdistan. Tangram The facility, the first of its Friday. Quai D Orsay Fitness Center is one of the most well equipped kind in Kurdistan, features Where: Shoresh Street, Erbil Romeo y Julieta facilities in Erbil. Featuring numerous pieces of five massage rooms, as Tel: 0750-233-4444 San Cristobal Technogym equipment, the spacious Tangram well as dedicated sauna Hotel Fitness Center also includes a sauna. and steam rooms. Where: Tangram Erbil Where: Rotana Erbil

Casa Del Habano Cigar Lounge at Divan Erbil The Divan Erbil Hotel, in partnership with the House of Cigar, is set to open the first cigar lounge in Erbil. The House of Cigar will offer a great LEVELINI: selection of cigars and drinks, as Poolside Living well as a small, upscale menu. The Redefining Style in Kurdistan Every day in the summer from 07:30 to 22:30, House of Cigar seeks to become one Levelini's showroom, billed as guests at the Rotana Hotel are invited to take of Erbil's newest “hot spots.” Open the largest of its kind for Italian a break from their busy schedules and indulge from 5 PM until midnight on the first furniture in Kurdistan, offers local in a bit of relaxation courtesy of the finest floor of the Divan Hotel, the House customers a taste of the company’s swimming pool in Erbil. The facility, which is of Cigar is worth a look for cigar eclectic mix of styles sourced from surrounded by a lush, green garden, also offers aficionados in Erbil. European manufacturers. Levelini’s outdoor dining options and fresh drinks at the clients benefit from a range of tools Aquarius Pool Bar. the company offers to help them Where: Rotana Erbil visualize interior spaces that meet their design needs. To meet client needs, Levelini puts great emphasis Tony Sawaya in Divan Erbil Luxury Recreation & Fitness on smooth logistics, maintaining Well-known Lebanese hairdresser Tony Sawaya The Divan Erbil has added an expansive spa to a large inventory of furniture in its will open a branch in the Divan Erbil Hotel in its portfolio of luxury amenities. Hotel guests showroom to ensure short waiting February 2015. The Center, which will be a and Erbil residents alike can take advantage times for the fulfillment of orders and first-rate beauty center for women and men, of the spa’s state-of – the-art fitness facilities. providing both transportation and will provide an extensive range of beauty The spa also features a 20-m semi-Olympic on-site assembly for customers. and wellness services, including manicures, indoor pool, sauna, and steam room, as well as Where: 100m St., Opposite Hoger pedicures, peeling, and botox treatment. The message suites and a Turkish bath. Petrol Station, Erbil center will also have a certified dietary expert. Where: Divan Erbil

192 — Kurdistan Review Invest in Group — 193 Inspire your guests and meet at Erbil Rotana!

Conveniently located 10 minutes away from Erbil international Airport, the main international fairground and business center. The hotel is adjacent to the English and Italian villages and opposite of the beautiful park Sami Abd Al Rahman; one of the largest parks in Iraq.

Erbil Rotana is an ideal venue to serve your business needs, meetings and events. The hotel provides state-of-the-art conference and seminar requirements spread over 2 floors. The banquet area includes 7 fully equipped and flexible meeting rooms offering daylight with the latest audio-visual equipments addressing the needs of business conferences, meetings, wedding Iraq’s Leading Hotel parties or gala dinners. A professional catering & events Erbil Rotana was bestowed with the prestigious honour of being IraqÕs Leading Hotel team is available all the time to make your event a in 2011, 2012, 2013 & 2014, consecutively by the World Travel Awards. This five star success. hotel offers 201 well-appointed rooms and suites, 7 fully equipped meeting & events venues, 5 restaurants that suit all tastes, a fitness club, spa and pool bar & terrace. Business travelers can enjoy our wide variety of facilities ranging from 5 restaurants to our enchanting Zen the spa by Rotana or Bodylines Leisure & Fitness Club. To book your stay at the best available rates, visit rotana.com or call us +964(0)662105555. To learn more about Erbil Rotana ongoing promotions, please visit rotanatimes.com.

Gulan Street, Erbil, Kurdistan, Iraq. T: +964 (0)66 210 55 55, F: +964 (0)66 210 55 56, [email protected]