The Iraqi Prime Minister Haidar Al-Abadi has launched a government-led initiative to reform the private sector in Iraq. This initiative is long-overdue and will be welcomed by Iraqi businesses as well as multinational corporations that wish to do business in Iraq. Today Mr. Al-Abadi gave a speech at the Rasheed Hotel in Baghdad to discuss the need for reforms. The below quotes are translated from Arabic.

“The private sector plays an important role in Iraq’s economy and economic activity.”

“Private sector growth is one of six strategic priorities of the Iraqi Government.”

State-owned enterprises

“With regards to state-owned enterprises, we need them to be more active in the Iraqi economy and to its development.

The government does not have the intention of laying off employees of these enterprises.

In order for these enterprises to be productive and supportive of their employees, they need to modernized. Their structures need to be revised since their performance over the last ten years is unsustainable. Otherwise the enterprises will close and their employees will lose their livelihoods.”

“We need to produce cooperation between the private sector and state owned enterprises on the structure of the latter.”

Iraq’s infrastructure

“Iraq’s infrastructure refers to telecommunications, transportation, services, housing projects. These all require the private sector in order to develop and play their role in Iraq’s economy.”

Agricultural & animal sectors

“Both are important, foundational and strategic priorities in Iraq. A large number of job opportunities come from these sectors. These sectors benefit the national economy as it allows us to have domestic production and a decreased reliance on imports.”

Financial & manufacturing sectors

“The foundation for development of the private sectors are the financial and manufacturing sectors. They are two links in the national economy’s improvement chain.

Unfortunately until now we have not seen much development with the financial sector in the New Iraq. Yes we have a free market and the banks have freedom to operate, unlike the past. However we cannot have private sector development without pushing the financial sector to develop.”

Need for reform

“We need reform for the regulations and laws from the previous regime that impact the private sector.

Some ask why we are tackling these now? Why don’t we wait until later? Because there are opportunities now.”

Oil

“We need to start relying on the private sector. We cannot continue to rely on the oil sector. 85% of our budget comes from that sector.

If we continue to rely on the oil sector than we will continue to be dependent on world market fluctuations which are not in our control. This is what happened last year.

Our austerity budget calls for export of 3.3 million barrels of oil per day at $56 per barrel. We did not achieve that in January. We achieved half of that in exports.”

Moving forward

“Iraq is not a bankrupt country. It is rich in its people, energy and power. We have the power to improve the national economy. We need a plan and patience. I ask for patience from the people. Success and development are coming. If we are patient with the plan we have then we will be free of this economic crisis.

I am confident we will overcome the current situation but we will need two things:

1- a path toward economic improvement

2- patience with the path

We will exit this crisis more powerful in terms of economy, security, general national standing.”

Role of the state

“As you know the private sector is the job creating sector. Not the state. The state doesn’t create real jobs.”

Prime Minister’s Al-Abadi’s remarks are a breath of fresh air for the private sector and Iraq’s economy. His words will resonate with local and international business people who await Iraq’s reforms it so desperately needs.