business agenda of al-anbar province english...business agenda of al-anbar province 8 ......

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Business Agenda of Al-Anbar Province

Prepared by Business Associations in Al-Anbar Province

In cooperation with the Center for International Private Enterprise

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Contents

Contents Page

Message by the Center for International Private Enterprises 3

Message by the Business Associations in Al-Anbar Province 5

A List of Business Associations and Economic Organizations

Participating in Preparing the Business Agenda in Al-Anbar

Province

6

A List of Names of Coordinators of the Business Agenda

Coordinators in Al-Anbar Province

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A List of Names of the Consultant Team to Review the

Business Agenda of Al-Anbar Province

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Introduction 9

Some Indicators about Al-Anbar Province 10

The Main Economic Challenges Facing the Private Business

Sector in Al-Anbar Province

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The Private Industrial Sector 19

The Private Agricultural Sector 31

The Private Construction Sector 45

The Private Transport Sector 59

The Private Trade Sector 73

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Message by the Center for International Private Enterprise

Esteemed Governors, Provincial Council and Provincial Investment Commission members,

A provincial business agenda (PBA) is a vital tool for the local business community to encourage investment by stimulating business

activity and economic growth. Private sector organizations in many countries of the world, including Egypt, Iraq, Montenegro, Romania, Russia, and

the United States, develop agendas that help identify the legislative and economic reforms necessary to advance their countries’ economies. With such

agendas, organizations have succeeded in prioritizing economic and legislative issues that have led to democratic, market-oriented economic reform.

In developing a PBA, private sector organizations mobilize the business stakeholders that they represent to influence policy reform by

setting legislative and regulatory priorities and clearly communicating them to policymakers. Often, through clear communication, the private sector

can attract public and government attention to the obstacles that obstruct development and growth of the overall business climate. The private sector

can also offer concrete recommendations and solutions to improving the business operating environment. A provincial business agenda educates

members of the private sector on public policies that affect them and their business interests. The process allows private sector representatives to

present the concerns of the business community to government officials in a unified voice and increase the likelihood that the agenda will be adopted.

In Iraq, CIPE has provided technical and financial support to numerous organizations in order to support their institutional capacities and

strengthen their capability to play an effective role in democratic and economic processes. CIPE started supporting work on PBAs in Anbar, Basrah,

and Najaf in 2008 with business organizations in multiple sectors. The business community, through their private sector organization representatives,

identified the economic sectors that they felt were pivotal in advancing and promoting Iraq’s economy at the provincial level. The private sector

organizations then identified the main barriers in those sectors and offered solutions. Workshops involving the leadership of business organizations and

Center for

International

Private

Enterprises

1155 15th

Street, NW, Suite

700

Washington, DC 20005

Tel: (202) 721-9200

Fax: (202) 721-9250

www.cipe.org

[email protected]

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specialists and researchers in provincial economic affairs were organized. The events gave participants a chance to discuss their ideas, propose

solutions, and contribute to economic development in these crucial sectors. The resulting agenda is the fruit of this effort.

When business associations come together to promote a core set of market-oriented policies, they are much more effective than if they

pursue policy change individually. CIPE will continue supporting such organizations in making their voices heard by decision-makers. This agenda

constitutes a step that the private sector’s organizations have taken to define their role in achieving sustainable provincial level development in a newly

democratic society. Success is to be attributed to all – organizations and individuals alike – that help promote the standard of living for all people in the

province.

I would like to extend my deep appreciation to the organizations and individuals that have contributed to finalizing the Anbar, business

agenda.

Abdulwahab Alkebsi

CIPE Regional Director for the Middle East and Africa

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Message from the Business Associations in Al-Anbar Province

By the Name of God; the Most Gracious, the Most Merciful

Your Excellencies,

Governor of Al-Anbar, President of Provincial Council of Al-Anbar, and Chairman of Provincial Investment Commission of Al-Anbar

Province

The Iraqi economy faces several challenges due to international and regional changes, international competition, and the world-wide economic

and financial crisis. Solutions for the economic problems in Iraq require the introduction and implementation of economic reforms. Al-Anbar Province

is a strategic target for economic reforms given the status of its economic, industrial, agricultural, construction, trade, and transportation sectors.

Several indicators have shown that the infrastructure will continue to deteriorate and the government will be helpless in terms of increasing

competitiveness. In this context, the private sector emerges as a core partner in delivering reform and development. The government can help enhance

the status of the private sector by setting the legal framework for involving it in the reconstruction and economic development in line with the market

economy. The private sector will be strengthened when the state assumes an effective role in promoting the market economy and builds up its

institutions to advance the private sector status. The decision making process for market reform must involve participation of the businessmen

federations, the industrialists’ associations, chambers of commerce, trade unions, professional associations, and the agricultural societies’ union.

It took one whole year starting August 2008 to set the business agenda of Al-Anbar, with valuable assistance from CIPE. This agenda is a

contribution meant to enhance the economic reform and participatory development, and support the competitive market and private sector. It includes a

comprehensive review of the status of the province and its economic sectors. Ongoing meetings and discussions with the private business sector and

those involved in the economic issues were held in order to have first-hand knowledge of the problems and challenges that the private sector faces.

Solutions and proposals were sought for optimal allocation of physical and financial resources to mitigate the severe impact of unemployment and

poverty prevailing among Anbar population. The appropriate investment environment must be provided to help restore and continue to motivate

private sector activity. This agenda is focused on identifying the distortions and weaknesses that prevent the private sector from functioning well and

keeping pace with developments in international economies. It provides a large package of proposals and recommendations that effectively contribute

to removing distortions and overcoming impediments.

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The main sectors covered in the agenda are industry, agriculture, construction, trade and transportation. These are leading sectors that can

motivate and push other economic branches forward. They help advance the process of reform, reconstruction and development. The private sector can

assume a main role as a partner of management, and decision making in the economy, which is in line with this sector’s corporate social responsibility

goals. The private sector can join with civil society organizations, the provincial government, and the local community to support their activities by

providing expertise, finances, and expertise required for sustainable economic development.

Accordingly, these reforms and solutions need serious consideration by the government to develop Al-Anbar’s competitiveness and turn it into

a leading model for other provinces. As such, Al-Anbar should achieve balanced development and reform in the socio-economic structures as well as

reiterate the private sector’s role in supporting a formal economy to overcome challenges and problems that people in the province face.

We hope that this effort will be taken seriously by the concerned ministries, who will be directly responsible for the dialogue and deliberations

to follow in order to implement the content of this agenda. We also hope this effort will enhance the role and importance of the private sector and its

industrial, agricultural, trade, transport, and construction domains to serve the Al-Anbar population.

Business Associations and Economic Organizations Participating in Preparing the Business Agenda for Al-Anbar

1. Federation of Iraqi Businessmen/Al-Anbar Branch

2. Chamber of Commerce of Al-Anbar

3. Iraqi Industries Union/Al-Anbar Office

4. Iraqi Society for Defending Consumer Rights

5. Association of Agricultural Engineers/Al-Anbar Branch

6. Trade Union/Al-Anbar Branch

7. Farmers Cooperatives/Al-Anbar Branch

8. Federation Contractors/Al-Anbar Branch

9. Private Transport Companies’ Group

10. Group of Owners of Quarries and Construction Materials’ Washers

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Signatures of Business Associations and Economic Organizations

(It includes all the above stakeholders)

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Committee Coordinators for Al-Anbar Business Agenda

1. Dr. Muna Turki Mousa

2. Dr. Tha’er Mahmoud Rashid Al-Ani

3. Dr. Imad Mohammed Ali Al-Ani

4. Siham Kamel Mohammed Al-Jamili

5. Dr. Abdul Jabbar Abdullah Al-Hamadi

6. Mahmoud Mahdi Hassoun Al-Falahi

Consultation Team Members to Review Al-Anbar Business Agenda

1. Dr. Sami Hameed Abbas Al-Jamili

2. Dr. Ahmed Wahib Hussein

3. Dr. Muna Turki Mousa

4. Dr. Imad Mohammed Al-Ani

5. Mr. Hameed Thwaib

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Introduction

This agenda is seen as an effort to enhance the private sector’s role in reconstructing the Iraqi economy by embarking on the economic

development process. The common belief is that Iraq’s reconstruction must be achieved with the participation of both the public and private sector in

making economic decisions. The private sector assumes a major and important role in moving Iraq from a centralized economy to a market oriented

and open economy. Such an economy will be able to keep pace with the economic developments worldwide, adapt to the international economic

changes, and make optimal use of available opportunities to face competition in the international market.

The agenda identifies the major impediments to private sector activity and developing the economic sectors in Al-Anbar Province. A strong

investment environment must be provided to motivate and revive the private sector. This is seen as a major target for this agenda, which focuses on

identifying distortions and weaknesses that restricts private sector operation and blocks it from coping with developments and changes in international

economies. The agenda provides a broad range of proposals and recommendations that effectively contribute to addressing distortions and overcoming

impediments.

Problems and challenges facing private sector investments and activities in the main sectors of the province are addressed in the agenda,

particularly in the industrial, agricultural, transport, trade, and construction sectors. Face to face interviews were conducted with a large sample of

stakeholders representing businessmen, farmer organizations and associations, trade unions, the Federation of Industries, chambers of commerce,

relevant civil society organizations, and other governmental agencies directly concerned with these problems. The representatives were responsible for

suggesting proposals, practical solutions, and other reforms required to improve the status of industry, agriculture, construction, trade, and

transportation sectors with an eye on the overall national objectives and objectives of the private sector in Al-Anbar Province.

The agenda team explored the private sector views with regard to core problems they face in three major sectors- agriculture, industry, and

construction as well as trade and transportation, which operates as a private-public partnership. A questionnaire was distributed to private sector

representatives when drafting this agenda which asked what contributions the private sector can make to implement the economic reform process in

light of the international economic environment. These suggestions included encouragement for economic openness and competitiveness especially in

the commercial domain, which requires adaptation to the international standards. In fact, the business environment and international competition has

witnessed accelerated changes and quick paced application of industrial technology. The market economy has become a focus that reflects optimal

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allocation and redistribution of resources to achieve a higher level of quality at lower costs; this is the new competitiveness principle. Rules of the

game are changing and competitiveness is getting fiercer. Work must be focused on creating a competitive business environment that the private sector

seeks as it assumes a significant role in furthering economic growth and stability. In parallel, the state can assume an effective role in enhancing the

status of the private sector by planning public policies with an eye for development that urges a structural change. This must result in providing the

right directives and directions for the market while supporting the private sector to have access to technology, training, restructuring, market, and

information dissemination. In addition, loans must be provided at low interest rates in order to enable the private sector to grow and compete.

Indicators of Al-Anbar Province

Geographic Indicators:

Al-Anbar Province is situated in the western part of Iraq. To the north, it borders SalahEddin and Ninewa provinces and Syria, to the east is the

capital Baghdad, to the west is Syria and Jordan, and to the south are Karbula are AnNajaf provinces and Saudi Arabia. Al Anbar is one of the

largest Iraqi provinces in terms of space as it counts for one third of total space of Iraq, measuring 140,000 Km2.

Administrative Division of the Province:

Ramadi: This is the administrative headquarters of the province. It is about 110 km away from Baghdad and it embraces several trade,

agricultural, tourist, and industrial enterprises. It is the most populous district in the province.

AlFalloujah: It is about 60 km from Ramadi to the west of Baghdad. It is located on the international road convergence, which enables it to be

a center for commercial exchange as well as an industrial zone where skilled manpower is available. It is also a tourist attraction as it is close to

Al-Habbaniya Lake.

Heet: It is 70 Km from Ramadi district and is a historical place located on the Euphrates River. It has plenty of distinct agricultural areas and

the Kabisah Cement Factory is located within its administrative borders.

Haditha: It is 160 Km to the west of the Ramadi district center along the Euphrates. It is known for Haditha Dam which provides a large water

reservoir for agricultural, power generation, and fishing purposes. It is a tourist attraction as well as a center for agricultural and animal

production.

A’nnah: It is about 200 Km from Ramadi District Center to the south of the Euphrates and it is known as an agricultural and tourist area.

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Rawah: It is about 220 Km to the west of Ramadi district. It is an agricultural area and has quarries rich with minerals.

Al-Qa’em: It is about 350 Km to the west of Ramadi District Center. It is close to the border shared with Syria. It is an industrial location as it

has the phosphate and cement factories. Within the administrative borders of the district it has the gas field of Akkaz and quarries of raw

minerals in the area.

ArRutbah: It is about 300 Km to the west of the Ramadi District Center, situated in the desert area and 150km from the Jordanian-Syrian

borders. The international road connecting Jordan with Syria and Iraq passes through it, and it is a good location for trade and has several raw

metals within its administrative space.

Major Industrial Enterprises:

1. Glass factories

2. Ceramic factories

3. Phosphate factories

4. Cement factories

5. Block factories

6. Gypsum factories

7. Gas and oil stock that has not been extracted yet.

The main governmental universities are Al-Anbar and Falloujah Universities in addition to five private universities found in the province.

The main tourist attractions are Al-Habbaniyah, Atharthar, Al-Falloujah Resort and all other western cities as they are located on the Euphrates

and are known for their historic value.

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It includes eight districts:

District Space/Km2 District Space/Km

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1 Ramadi 8543 5 Heet 8353

2 Al-Falloujah 4223 6 A’nnah 5597

3 Hadithah 3644 7 ArRutba 93445

4 Al-Qa’im 8825 8 Rawah 5676

Population of the province accounts for 1,021,468- 4.63% of total population of Iraq, who account for 22,046,244 as per 1997 statistics. Space of Al-Anbar counts for 138288 Km2;

31.7% of total space of Iraq.

Al-Anbar Province

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Major Economic Challenges Facing the Private Business Sector in Al-Anbar Province:

As revealed in the questionnaire, most of the private sector businessmen agreed that there are real problems that Al-Anbar Province faces, especially in

the industrial and service domains as well as all components of the infrastructure. This is the basis for releasing the private sector recommendations to

provide the legal framework to regulate investment and provide the relevant environment for the private sector business and progress:

1. There are no accurate statistics made available about several activities in the province or Iraq. These activities lacking data include industries,

agriculture, population, number of the unemployed and their academic qualifications, income levels, cost of reconstruction and building, the

industrial investment map, and industrial damages. This makes it difficult to obtain good and accurate information about the available investment

opportunities. However, already available data can be used to analyze the current and future trends of demand, taking into consideration the need

to import due to an insufficient supply of goods.

2. The aftermath of April 2003, the new mechanism of free importation and the transition towards the free market economy has made it possible for

all types of goods to enter Iraq. These goods are sold at prices that local small and mid scale businesses cannot compete with due to importation

of goods from low cost origins without any consideration for quality and durability.

3. Qualified and technically skilled manpower is not available especially among the young, unemployed, newly graduated. Manpower in supply is

incapable of fulfilling the available demand and motivation for development and innovation in the form of entrepreneurship is very small.

4. The investment environment (including the infrastructure and organizational, administrative and legal issues) is not secure. This has resulted in

low levels of private investment and motivation for its activities.

5. There is no investment map to reflect priorities for potential projects or include best practices while considering the real needs, required

capacities, and physical resources available in the province.

6. Due to the fact that federations and associations are still emerging and shoulder very huge burdens, they still lack sufficient knowledge of

processing of governmental applications, costs of registration, establishment of enterprises, and credit and loan issues.

7. The infrastructure is not available especially when it comes to roads, bridges, electricity, and telecommunications.

8. Limited and insufficient absorption of manpower has resulted in high rates of unemployment. Statistics from the Ministry of Planning and

Development Cooperation reveal the median unemployment rate in the province at 33.3% for the past five years.

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9. There are no training centers to provide people with technical and academic competencies, or offices to provide consultation and facilitate the

process of establishing industrial projects by providing administrative and scientific consultancy.

Accordingly, the challenges facing the major economic sectors and solutions proposed to develop the private sector in the province are summarized

as follows:

First: Participation in the Economic Decisions

Challenge: Create a common vision for the private business sector, the public sector and the civil society.

Objective: Establish a standardized vision for all agencies to participate in general policy making and drafting of the economic decision.

Background: It is important to identify strategic objectives and hold discussions and consultations in relation to the strategic objectives of

development.

1. It is important to create a common vision to identify the overall problems, impediments, and challenges that face the private business sector

in order to be able to reach relevant solutions.

2. It is important to reduce the influence of the public sector from the private sector and separate the domains of operation for each in order to

avoid overlapping. Delineating the roles will also reduce competition between the two sectors in managing certain operations.

3. The vision is a realistic strategy through which policies and procedures can be set to help achieve objectives.

4. The absence of a common vision means failure to allocate resources and marginalization of the private sector, which is in a good position to

compete in all or most of the production phases.

The required decision: Initiate a permanent, comprehensive, and regular dialogue that involves all agencies and parties involved in the

development process, to help make a joint decision on the overall issues and problems facing the private sector.

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Second: Developing Competencies of Owners of Private Businesses

Challenge: Entrepreneurship and enhancement of the social initiative principle.

Objective: Train people to provide them with competencies in the private sector operations and encourage participation from a strategic

perspective between the business sector and the civil society.

Background: It is important for the private sector to obtain knowledge, skill and motivation by providing them with training courses in order to

better further the principle of entrepreneurship and creativity.

The Required Decision: Cooperation between the government, private sector, and civil society organizations to back up the idea of joint corporate

social responsibility.

Proposed Solutions Relevant Agencies

1. Involve the public sector in disseminating awareness and highlighting the

importance of creating an institutional framework to regulate the dialogue aimed

at advancing competencies of small and mid scale business owners.

2. Create business incubators to provide care for private businesses at their

inception, operation and innovation phases.

3. Stress the importance of cooperation and coordination among the civil society

organizations, business owners, and public sector in order to back up the joint

corporate social responsibility principle especially in terms of competition,

combat monopoly and commercial/industrial fraud. Also highlight the

importance of quality and competitiveness in a market economy.

4. Urge the relevant ministries, especially the Ministries of Finance, Industry and

Trade, to provide incentives for the private sector in relation to taxes, subsidies,

assistance, commercial safeguarding, and research and development in order to

help advance the status of private businesses.

Federation of Businessmen

Federation of Chambers of Commerce

Federation of Industries

Ministry of Planning and Developmental Cooperation

Ministry of Trade- The Private Sector Development

Department

Ministry of Industry and Minerals- Private Sector

Development Department

Ministry of Labor and Social Affairs

Provincial Council of Al-Anbar Province

Relevant Civil Society Organizations

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Third: Building an Integrated Institutional Framework:

Challenge: Facilitate acquisition of credit and loans given to small and mid-scale projects.

Objective: Support small and mid-scale projects.

Background: Small and mid-scale projects face several financial challenges including management issues and difficulty accessing credit and lending

services:

1. Small volume of credit given in light of high prices in general.

2. High costs of loans (interest rates) given by private and specialized banks.

3. The high degree of risk and uncertainty due to fierce competition.

4. Loans do not cover the fixed and variable costs as well as the operation capital in the sectors producing commodities. Therefore, they shifted

towards the trade and service sector as it secures for them a prompt return on investment and better income.

5. Lack of experience to have access to credit and loans through dealing with the financing agencies (governmental and non-governmental).

6. Requirement of collaterals to secure payback of loans, which a small investor cannot afford.

Decision Required: Transparency and administrative deregulation as well as setting a program for lending and financing as an entry to support

competitive advantages of private projects (small and mid scale) in order to help solve the problems of unemployment and poverty in Al-Anbar

Province.

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Solutions Proposed Competent Authorities

1. Policies set by relevant ministries need to be in harmony and aligned to confront

the challenges of poverty and unemployment as well as creating income

generating job opportunities in an environment that is safe and secure for small

and mid-scale projects.

2. Increase the level of loans and compensations given for industrial damages and

destruction of the infrastructure in Al-Anbar Province in order to secure the

development process and formation of fixed capital.

3. Provide safeguards as necessary for certain periods of time (especially for those

commodities that the province enjoys significant advantages from) and provide

opportunities to help businessmen have access to the labor market by means of

promoting public meetings and require the federations/unions involved to do so.

4. Promote core production inputs and make use of primary and raw materials

locally produced.

5. The Anbar Provincial Investment Commission must assume its role and take the

initiative to draw the investment map for industrial projects and set priorities in

coordination with the professors of economics, professionals, consultants,

industrialists, and businessmen for strategic projects.

Federation of Businessmen

Federation of Chambers of Commerce

Federation of Iraqi Industries

Ministry of Planning and Development Cooperation

Ministry of Trade- Private Sector Development

Department

Ministry of Industry and Minerals

Ministry of Labor and Social Affairs

Provincial Council of Al-Anbar

Investment Commission in Al-Anbar


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The Industrial Sector

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The Industrial Sector in Al-Anbar Province

Summary:

Development of communities is usually measured by the extent of progress made in development, especially industrial development. The

industrial sector has competitive advantages and is capable of generating income and creating job opportunities as well as making use of technology

and keeping pace with its development. Accordingly, manufacturing has become a strategic option to achieve development in Iraq especially in Al-

Anbar Province. It is a criterion for the ability to compete in a competitive market and transparent business environment. This is especially true in the

aftermath of the trade openness that the Province has experienced from neighboring countries and the accession of many countries to the World Trade

Organization. Despite the relative and competitive advantages of the industrial products in terms of the private industrial activity in the Province, they

stand fierce and unequal competition from similar foreign products made available on the local and international markets.

The private small and mid scale industrial projects in Al-Anbar require a supportive institutional framework and an integrated program to

develop and improve all industries as well as secure governmental support for their activities as they generate income and job opportunities. In fact,

this Sector makes a major contribution in two basic domains: welfare for the Iraqi family by their income and increased job opportunities. The other

contribution is an indirect one: promotion of self-reliance, individual initiative and acquisition of skills. Therefore, it is necessary to support official

policies towards projects and promote competition among them in terms of quality and price. This can be achieved by assisting them to obtain better

incomes and advanced production technology.

Introduction

Considering and analyzing the status of private industrial projects in Al-Anbar Province to help fulfill local demand before they collapse and

incur losses requires removal of all financing, marketing, administrative, and technical impediments that obstruct success. Financing in the form of

grants or soft loans is seen as the backbone for any project especially when conventional collaterals required by banks are not available to get loans to

finance these projects in the short and mid terms. Such a lending has proved to be effective in mitigating poverty, which requires further support from

the government on the regulatory level (tax holidays, exportation incentives, energy saving, and maybe the construction of industrial parks or zone for

the special use of small and mid-scale projects). These must be provided with the required inputs to create an investment environment that will

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motivate entrepreneurs and attract capital. They must inspire the international experiences and business incubators must be created to provide care for

such projects in their inception, operation, and innovation phases. The basic infrastructure for transport and telecommunications must be provided in

order to secure the relevant environment to revive projects that have already suspended production (or will be) for the same reasons stated above.

First: Features of the Private Industrial Sector in Al-Anbar Province:

The status of industries in Al-Anbar holds the same features of industry and economy in Iraq. Following are the main gaps and impediments that the

sector faces:

1. The private industrial sector in Al-Anbar Province is characterized by the greater significance of small industries on relative to that of large

and mid-scale industries. These small scale industries are simple and require a low level of working knowledge in the commodity components

as they are labor intensive. Statistics approved by the Ministry of Planning reveal that there were 142 small industrial enterprises in 2004 with

a production share of ID 2,735,346. In addition, they are characterized by the following:

a. Low level of technology used in industries. There is still a dependence on technologies that cannot cope with changes in local demand.

Moreover, they fail to compete with foreign commodities and the use of technology is minimal in the private projects in the province.

b. Professional safety is insufficient due to the lack of basic supplies for operation.

2. There is no industrial strategy with clear features and objectives based on natural and economic resources produced in the province or nearby.

The Ministry of Industry/Industrial Development Department, the Iraqi Industries Federation, and the Investment Commission have not yet

produced such a strategy, which has resulted in the emergence of some industrial “workshops” with low productivity. This causes distortion to

the industrial productive structure already in existence.

3. Recycling of some primary products such as plastics and aluminum stuff, and the use of second hand spare parts, have become common

practices among those in charge of the industrial sector including individuals and companies.

4. Most of the industrial activities operate under the informal or “shade” economy. They do their activities away from official monitoring. They

want to make some income to survive given the fact they cannot stand foreign competition. They resort to industrial and commercial fraud.

5. Networking between industrial project leaders on one side and other economic branches and activities on the other side is still poor and

insufficient.

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6. The industrial sector does not have adequate opportunities to raise funding from banks and other financial institutions compared with the

industrial damages it underwent.

7. Most of the existing industrial projects depend on simple machines and equipment with basic technology. Most often, they depend on simple

skills compared with imported goods. This can be attributed to the systems of education that fail to cope with the requirements of the labor

market especially in terms of demand. In fact, this is one of the main reasons for unemployment of all types.

8. No compensation is provided for industrial damages and for the period of force majeure that caused the production process to stop (military

and terrorist actions).

9. Agencies to issue certificates of quality assurance and control are still not in existence. The Central Office for Metrology and Quality

Assurance, which is the official agency to issue such certificates, is still operating on underdeveloped standards that must be upgraded. Local

industries do not observe such standards.

10. Administrative and regulatory complications to raise loans exist, along with the absence of a higher committee to assess damages that owners

of industrial plants and factories incurred. Moreover, banks impose strict conditions and requirements especially when it comes to high

interest rates. The value of loans provided does not cover the industrial and economic damages that the industrialists incurred, which keeps the

industrialists from submitting ensured collaterals as required by banks. The problem is exacerbated when equipment and machines are not seen

as part of collaterals for a loan.

11. Banks that enable the establishment or development of small and mid-scale industries by means of partnership or Murabaha are not available

yet.

12. Laws, regulations, and bylaws do not exist to motivate the private sector businessmen to develop the industrial status whether in terms of

customs deregulations, promotion of the local product, loans/grants/aid. Laws also don’t exist outlining that infrastructure will be provided by

the State in the form of roads, bridges, health services, education, telecommunications, and electricity.

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Second: Methodology of the Profile

a. Core partners contributing to this profile:

Federation of Industries/Al-Anbar Branch

Federation of Businessmen/Al-Anbar Branch

Trade Unions/Al-Anbar Branch

Chamber of Commerce of Al-Anbar

Individuals with specialty in the industrial sector

b. Classification of the Private Industrial Sector in Al-Anbar

Classification of the Industrial Sector in

Al-Anbar

Large-scale Industries

Mid –scale Industries

Small-scale Industries

Light Industries

HandicraftsIndustries with

simple technology

Heavy Industries

Governmental Industries

Private Sector Industries

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Third: Major Problems of the Private Industry Sector and Proposed Solutions:

In brief, the following are the problems and solutions:

1. The Proposed Industrial Strategy for Al-Anbar Province:

Problem Proposed Solutions Competent Authorities

11 No specific strategy is in place for industrial

investment in the province to identify the direction

of this sector.

Consider the investment environment of the

sector by setting an industrial investment

roadmap and priorities among projects in the

province. Also, identify strengths of the

province and any branch in this sector.

Weaknesses are to be identified as well.

Ministry of Industry and Trade

Ministry of Planning


Investment Commission of Al-Anbar

Federation of Industries and

Businessmen

Experts from the academia

22 Networking and interactions between the industrial

sector and other sectors are still not well established.

This also applies to other subsectors of industry.

When considering the investment environment

of the sector, a roadmap is drawn for networks

and interactions through which the sector’s

interaction with other sectors can be identified.

The subsectors of the industry need to be urged

to operate together especially in terms of

networking between small and mid-scale

projects and large-scale projects of the public

sector.

Ministry of Industry and Trade





Businessmen


33 There is no clear vision (neither from the

government nor from the private sector) to identify

the available potentials of human, natural, and

economic resources in the province to help build an

industrial base in line with its relative significance in

the province.

These potentials must be identified through a

study of the investment environment of the

province to help identify the industrial status of

the province and the natural resources it has.

The relevant stakeholders need to produce a

database for this sector to document each and

every piece of information on this sector.

Ministry of Industry and Minerals





Businessmen


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44 Most of the industrial projects of the private sector are

closed down for economic and security reasons.

Support these projects by reducing taxes, giving

long term loans against low interest rates and

providing the relevant environment to promote

production.

Ministries of Industry, Finance, and

Trade

Central Bank of Iraq

The Industrial Bank

55 The industry of dyes and colors has disappeared in Al-

Fallujah District even though it is one of the oldest

industries. There are more than 10 factories in the

district yet only one is still operating.

Highlight the role of Industrial Development

Directorate and the Industrial Bank using the

methods, solutions and techniques that help

requalification of this industry and other

industries to provide their product on the Iraqi

markets.

Ministry of Industry

Ministry of Trade

Other stakeholders

66 The required energy supply is not available

(electricity, oil and its derivatives).

Provide an electricity grid for the use of these

factories only and subsidize the prices of fuel

and oil derivatives used in this industry.

Ministry of Electricity

Ministry of Oil

Any other relevant stakeholder

25

2. Organizational, Administrative and Supervisory Procedures:

PPrroobblleemm PPrrooppoosseedd SSoolluuttiioonnss SSttaakkeehhoollddeerrss

11 Laws and regulations governing the industrial

investment process are not clearly drafted to

secure the investor’s rights. In addition,

administrative and regulatory complicated

procedures impede the processing of industrial

investment applications.

Laws and bylaws of industrial investment

must be disclosed and transparently

enforced. Along with their

interpretations, they must be published in

the media including magazines, and

periodicals of the sector.

Facilitate the process of registering

workshops, factories and manufacturing

plants while reducing the red tape

wherever possible.




Provincial Council of Al-Anbar.

22 There is a lack of methods and special

procedures organizing the industrial investment

applications for mid and small-scale projects

and private projects.

The process to establish and construct

private mid and small-scale industrial

projects must be motivated. Such projects

must be supported as they are; this is of

great importance in developing the

industrial sector and solving the

unemployment problem.



Ministry of Finance

Investment Commission in Al-Anbar


33 Poor supervision and control of the existing

project’s operation that are still under

establishment. There are factories and plants

operating in the informal sector away from the

supervision of governmental agencies and other

controlling entities.

Develop the supervisory role of

governmental agencies to facilitate the

entry of these factories and plants into

their registers. This will prove that the

state and federations can be official

agencies regulating the market economy

and provide accurate statistics and

official data.




26

44 Several business owners are still ignorant of

financial and economic feasibility studies and

the importance of doing them when attempting

to establish an industrial project.

A financial and economic feasibility study

must be a major requirement to establish

projects so that the relevant agencies can

identify the feasibility of this project from the

economic and national perspectives. Then,

they can ensure its success.

Ministry of Planning and Development

Cooperation

Relevant scientific research centers

55 Procedures applied by the quality assurance

agencies are still poor, which results in

producing low quality goods that are harmful in

terms of their economic and social value.

Enforce the role of the Central Office of

Metrology and Quality Assurance to motivate

producers to apply good manufacturing

procedures and observe standards to secure

good quality products for customers that

fulfill their needs.

Ministry of Planning and Development

Cooperation


66 There are only two industrial parks, Al-Karma

and Al-Soufia. Projects lack specialty,

especially in the service industry. Projects

operate on an informal basis without any

economic and financial feasibility studies.

Build industrial parks after the relevant

agencies conduct studies on industrial

location and production inputs in addition

to incentives and infrastructure services

including water, electricity, roads and

bridges, and telecommunications.

Standardized designs must be provided for

roads and common types should be

identified, and projects selected.

Ministries of Industry, Planning, Transport,

Telecommunications, and Electricity



Relevant scientific research institutions

77 There are some illegal industrial activities such

as informal construction and block

manufacturing from soil.

Enforce the role of legal agencies and Law

Enforcement Departments to help capital

holders and industrial project owners operate.

Also, identify the state owned areas.


Telecommunications and Electricity



27

88 Geographically scattered projects and poor

networking among them.

Create a motivating environment for

capital holders in certain locations and

facilitate the establishment of projects.

Also, have the State provide incentives,

preferences, support and assistance for

projects through parks, zones or

investment estates.

Urge large projects and the public sector

units to use products of small industries to

secure marketing.


Telecommunications, and Electricity



99 All economic organizations, Federation of

Businessmen, Federation of Industries and the

Chamber of Commerce in Al-Anbar Province

are not represented in the Provincial Investment

Commission of Al-Anbar.

All stakeholders must be represented in the

Investment Commission as members,

supervisors, and controllers. They must be

involved in the economic decision making

process.

The National Investment Commission

Al-Anbar Province Investment Commission

1111 Local investors have their fears of foreign

investors because they feel incompetent and do

not possess the economic and financial

knowledge to shift public sector ownership to

the private sector or to create developmental

investment zones.

Provide a relevant social structure to

“welcome” foreign investors in the province.

This can be achieved through promotion

campaigns and educational seminars to admit

foreign investment. Conferences must be held

to highlight the importance of foreign

investment for the national economy.


Al-Anbar Investment Commission

Scientific Research Institutions and other

business associations in Al-Anbar

1111 Bureaucracy and the red tape have a clear

effect on processing applications of loans given

the fact that loans are subjected to specific

timelines.

In order to facilitate the lending process,

relevant agencies must work on reducing and

removing the red tape of procedures required

at the Notary Public, Social Security, and

Public Pension. These agencies include the

Iraqi Industries’ Federation in Baghdad, the

Federation of Businessmen, and the Industries

Federation- Al-Anbar Branch.


Ministry of Finance

The Industrial Bank

28

1212 No compensation is provided for the damage

caused to industrial plants and workshops due

to military and terrorist operations.

Municipalities are also asking owners of these

plants and shops to pay the arrear rental fees.

Create a higher committee to evaluate the

industrial physical damages and provide

compensation in case of proved damages.

Exempt owners of plants and workshops

from the arrear rental fees incurred during

the period of production suspension since

2003. This is aimed at supporting

industry.

The Cabinet

Ministry of Defense

Ministry of Finance/ Tax Department

The Industrial Bank


1313 Licenses to establish projects are centrally

issued by the Industrial Development

Department, in close intervals. The capacity to

accommodate such projects in Al-Anbar

Province is limited due to the inability to

market produced stuff.

Have the Investment Commission

announce the investment opportunities in

the province in order to diversify the

industrial production base and strengthen

its linkages.

Urge large projects and the public sector

units to use products of small factories and

industrial plants in order to secure

marketing at all the production phases and

secure expansion of the industrial

diversification base.

Industrial Development Directorate



1414 No disclosure or transparency is provided for

laws and regulations of industrial investment.

These must be publicized, along with their

interpretations through the media including

periodical and magazines of the industrial

sector.

Instruct the media in the province to set

relevant media space to cover the activities

and opportunities available for industrial

investment. The Law of Investment No. (13)

for 2006 must be disseminated among

industrialists who should be aware of the

main challenges they face. They need to be

familiar with the economic terminology,

economic feasibility studies, and stock

exchanges.



Relevant Higher Education and Scientific

Research Institutions in Al-Anbar

29

1515 Exemptions and customs deregulation are not

provided to help import the basic production

inputs to support and promote the local

product.

Promotional exemptions and facilitation must

be provided to import production inputs in

order to support emerging industries and

enable them to compete.

The Cabinet

Ministry of Finance/ Public Department of

Customs


1166 There is an absence of a special unit or center

for information at the provincial level.

A unit or center for information (database)

must be created.



1717 There is no map to show the industrial

investment opportunities in the province. A

study of the business environment in the

province can help identify these opportunities

and establish the province’s industrial status.

There must be a map of investment and a

study should be conducted of the materials

available in the province of where extraction

and manufacturing industries can be

established to create further economic value

added.


Institutions of Higher Education and Scientific

Research

Relevant Business Associations in Al-Anbar

1818 The market is widely open for all types of

goods especially from neighboring countries.

This resulted in the inability to compete and

fading local industry.

Impose selected safeguards on small and mid-

scale industries’ production in all of Iraq due

to the inability to compete. For instance,

regular consumer technologies.

House of Representatives at the Iraqi Parliament


Ministry of Trade



1919 Raw materials and semi-finished products

needed for industries are not manufactured

locally.

Promote manufacturing of raw materials

(industrial and agricultural) locally in Al-

Anbar and all other Iraqi provinces to help

develop and increase the level of extraction

industries and move them to the

manufacturing level.


Ministry of Agriculture

Ministry of Oil



31

The Private Agricultural Sector

31

The Private Agricultural Sector in Al-Anbar Province

Summary:

Recently, further failures happened in public policy performance due to seven crises that occurred in agricultural development in Iraq, and Al-

Anbar in particular. Some of these crises have become other features of agriculture in Al-Anbar. In addition, these crises interact to the extent that

changing any of them and removing its negative components will result in a positive impact and help solve other problems. Therefore, it should be

easy to control other problematic areas once progress is made in development because most of the developmental variables relate to agriculture. These

problematic areas include:

1. The economic imbalance

2. Financing and investment issues

3. Technology and scientific research issues

4. Issues related to manpower in agriculture

5. Poor regulatory and administrative structures

6. Issues related to agricultural planning and policies

7. Issues related to coordination and integration of the agricultural sector

For all the above reasons, agriculture in Al-Anbar has been characterized by poor performance, in terms of policies, especially in the past

period. This is due to the insufficient investment rates and insufficient capital provided for agriculture. This results in low relative significance of

investments directed to the agricultural sector, poor investments put for agricultural research, and poor coordination with agricultural extension

institutions. These have failed to deliver training for farmers to operate new agricultural patterns and technologies to reduce cost and improve

productivity and quality. Other cases in the point include irrational approaches to land reclamation, desalinization of soil, delayed filtration

(drainage) projects, digging of main wells, lagging technology of agricultural production, low levels of agricultural machinery use, and inadequate

32

use of chemical fertilizers, pesticides and processed seeds. Although the production technology is advanced, still it is not yet capable of coping

with the attributes and needs of the agricultural environment. Scarcity of water and water management add to the future challenges that the

agricultural sector will endure. This will have an impact on the need for water in the agricultural sector and irrigated land in the province.

Introduction:

Al-Anbar Province has a space of about 16 million dunums of agricultural land out of 48 million dunums of cultivable land all over Iraq. Al-

Anbar Province is known for a distinguished geographic location. The Euphrates goes through it from the west to the east, covering 500 kms. It has

large lakes such as Al-Habbaniya, Tharthar, and Haditha Dam Lake. These can be invested in for fish keeping and tourist attractions. People in Al-

Anbar are interested in planting varied crops such as palm trees, citrus and other trees. They keep livestock and poultry. The province has a large

reservoir of underground water and valleys that can be used in the reclamation and construction project of the West Desert.

As is the case with all other provinces in Iraq, the agricultural productivity in Al-Anbar has been declining due to the shortage in agricultural

production inputs including fertilizers, agricultural machinery, and pesticide sprayers. Moreover, the irrigation infrastructure needs better

maintenance to avoid salinity of large spaces of irrigated fields spread all over the province.

Agriculture in Al-Anbar Province is dependent on irrigation water. The annual rainfall average is low- about 150 mm per year. Cereals,

legumes, and potatoes are the main crops planted in the province. The irrigated agricultural land in Al-Anbar has a high level of salinity resulting

from bad management of irrigation processes. This land was left without irrigation and not well exploited during the past two decades. The

agriculturally used space does not exceed one million dunums (250,000 hectares) out of which 700,000 dunums are irrigated land. About 163,000

dunums of land depend on wells as a source for water. Land planted with wheat and barley counts for about 250,000 dunums. Agricultural methods

and techniques that farmers operate are still of a limited efficiency.

In the aftermath of 2003, the subsidies provided for the agricultural sector have been removed and farmers could not afford to purchase the

production inputs including seeds, fertilizers and other inputs for the black market prices. The high cost of production inputs has resulted in

abandoning large spaces of land especially the marginal parts.

33

Al-Anbar is known for its dry environment and hot weather especially in summer time with the temperature reaching 48 degrees centigrade or

above for much of the time. In winter, the rainfall average is insufficient. The evaporation rate is high in summer, which marks more than

12mm/day in July and August.

The Northern Desert receives it share of water from a basin of 1689km2 space inside and outside Iraq. The annual average rate of

stream/inundation water counts for 351million m3/year. Euphrates, Razazah, and Al-Habaniyah Lake receive about 246 million m

3 out of this

water. Of course, these streams can be exploited for agricultural projects given the fact that Al-Anbar Province produces less than 30% of annual

food needs.

First: Attributes of the Private Agricultural Sector in Al-Anbar Province

The private agricultural sector in Al-Anbar Province faces several impediments to investment and development in the sector. These include:

1. The low quality of technology used in agriculture. The technology already used in the sector does not cope with the increasing demand for

agricultural products which cannot compete with imported goods.

2. The agricultural sector has a limited space of agricultural land and is threatened with the housing and construction projects.

3. Most of the agricultural land has a declining productivity rate due to the high degree of salinity and the absence of an agricultural cycle

approach.

4. Most of the irrigation canals used for field irrigation networks are in bad shape. This applies to the filtration (drainage) networks and is

attributed to the lack of maintenance.

5. Surface irrigation is used on a large scale on the account of up-to-date irrigation systems.

6. Water pumping stations are used up and maintenance costs are high.

7. Processed seeds that are approved by the official relevant agencies, fertilizers, and machinery are not made available and their costs are very

high.

8. There are no financial allocations to establish and operate research centers.

9. The private agricultural sector has not received any compensation for the damages it incurred due to complete or partial suspension of some

agricultural projects due to violence, looting, and terrorism.

34

10. Insufficiency of agricultural loans, high interest rates, and many administrative complications and red tape.

11. Since 2003 till the present date, the agricultural sector has been faced with low-price, low-quality products especially meat, vegetables, and

fruit products being dumped into the Iraqi market. This has had a negative impact on local production.

12. Low quality types of egg-laying hens, which are imported from neighboring countries.

13. Bylaws to protect fish in the aqua basins are still poor and insufficient. In addition, over hunting methods are used during reproduction

seasons.

14. Shortage and poor quality of fridge and freezing storage spaces.

15. Poor promotion and support of the local product.

Second: Methodology of the Profile

a- Core Partners in the Profile

- Farmer Cooperatives

- Businessmen Federation in Al-Anbar

- Agricultural Engineers’ Association

- Teaching staff and researchers from academia

- Federation of Industries/Al-Anbar Branch

- Al-Anbar Chamber of Commerce

- Professionals from the Agricultural Sector

35

b- Classification of the Agricultural Sector in Al-Anbar

Third: Challenges and Proposed Solutions

1. Developing Competence of Workers in the Private Agricultural Sector

Challenge: Research and development in the agricultural sector is still not up to the aspired level.

Objective: Encourage research and development to be employed for the interest of the agricultural sector.

Background:

a. The potentials of research and development are limited.

b. Lack of experience in the agricultural research in the Province.

c. Conclusions of agricultural research are not implemented in real situations in the agricultural sector. Coordination is also poor between the

scientific research centers and universities on one hand and the agricultural sector on the other.

Classification of Agricultural

Sector

Irrigation

Irrigation Canals Ground Water

Animal Production

Poultry ProductionFish Production

Livestock Production

Plant Production

Field Crops

Vegetables and Orchards Research and

TrainingAgro-land tenures

36

The Decision Required: Support research and development and provide the suitable environment for innovation and creativity in this sector.

PPrrooppoosseedd SSoolluuttiioonnss SSttaakkeehhoollddeerrss

Involve the private agricultural sector in research and innovation, and provide new

scientific methods to be used in production.

Ministry of Higher Education and Scientific Research


Ministry of Science and Technology

Provide training for researchers in this sector to help them create new methods to

improve the level of production and productivity

Apply conclusions of agricultural research in real situations in the agricultural

sector

Ministry of Higher Education and Scientific Research


2. Developing Production Methods

Challenge: Methods used in the production of crops are still incompetent

Objective: Develop growing and harvesting of field crops by using up-to-date methods.

Background:

a- Some farmers are still using old, underdeveloped methods in plowing and planting seeds.

b- Most seeds used are produced by farmers and are of a low productivity volume.

c- Harvesting the cereal crops is costly. It takes a long time and requires great effort.

The Required Decision: To use latest state of art technology in the agricultural processes


Increase production by introducing automation to all agricultural processes (using machines to throw seeds

and modern harvesters). Ministry of Agriculture


Expand the use of modern technology in agriculture



Provide orientation for young graduates from the Faculty of Agriculture and other institutes of agriculture to

work in the private agricultural sector by allocating pieces of land for them, giving them the required

training and facilitating the lending process so that they can be involved in the production process. As a

result, many unemployed graduates will be working, improving production and soil.


The Agricultural Bank

State Owned Banks

Private Banks

37

3. Improving Operation of Ancillary Institutions of the Agricultural Sector:

Challenge: Facilitate lending process to support agricultural and livestock projects.

Objective: Back up private agricultural projects including projects to produce and keep poultry, fish and livestock.

Background: The private agricultural sector faces several problems of financing the private sector projects due to complicated lending procedures.

a. Amounts given in loans to investors in the agricultural sector are low considering the inflation rates of the Iraqi economy and the overall high

prices.

b. There are high interest rates for the loans given by the Agricultural Bank and other private banks.

c. Collaterals required to secure the payback of those loans are so large that an investor in the agricultural sector cannot afford them.

The Required Decision: Create a program for lending and financing to support private agricultural projects and facilitate procedures in this respect:


Protect agricultural projects and provide the relevant environment for the investor to

help them establish their projects.



Ministry of Finance

The Agricultural Bank

Compensate investors in the agricultural sector for the damages their projects incurred,

especially those of poultry production, due to terrorist and looting actions taking place

after 2003.

Provincial Council of Al-Anbar – Compensation Committee

Inputs for the agricultural production must be subsidized.


38

Fourth: Major Problems of the Private Agricultural Sector and Proposed Solutions:

1. Developmental, Administrative and Organizational Procedures:

SSeerriiaall PPrroobblleemm PPrrooppoosseedd SSoolluuttiioonnss SSttaakkeehhoollddeerrss

1 There is no clear vision for the private

agricultural investment in the province to

identify the directives and direction of

that sector.

Laws pertinent to investment in the

agricultural sector need to be clarified through

the local farmers’ federations.


General Federation of Farmers’ Associations

2 Poor scientific coordination among

research centers, universities, and

ministries.

Research work must be linked to field work.

This can be achieved through applied research

centers to solve problems and impediments

hindering production.

Ministry of Higher Education and Scientific

Research



3 Scarcity of mid or large-scale agricultural

projects in the private sector.

Create an environment conducive to

establishing agricultural projects by capital

holders. Such projects need to be supported,

assisted and monitored.




General Federation of Farmers’ Associations

Businessmen Federation

4 Land and water of the Western Badia

(Desert) are left without any investment.

Basic components for investment in the Badia

must be provided including creation of desert

oases and provision of elements required for

settling the nomads such as water, electricity,

telecommunications and energy.


Ministry of Irrigation



5 Expansion of construction and industrial

projects and urbanization due to the

abundance of agricultural land.

Effective enforcement of the Agricultural

Production Safeguard Law and enforce the

Law of Environment Protection


Ministry of Environment


6 Agricultural land is not utilized well. It is

abandoned and left without cultivation.

Utilize the largest space possible of

agricultural land in order to increase

production and enforce taxes on uncultivated

land.


General Department of Taxes

7 Status of forests is deteriorating. They

are poorly managed and not getting the

Forests must be developed and expanded. Care

must be provided for existing forests and trees. Ministry of Environment


39

necessary attention. A law to protect the wild fauna must be

enacted.

8 Power required for agricultural

operations is not made available, and

when available it is of high costs.

Establish new energy-saving methods

including solar systems and windmills in order

to save effort and costs.



9 Small investors do not get financial and

in-kind assistance to help them persist in

production

Assist farmers by providing loans to them to

be able to purchase the agricultural production

inputs.

The Agricultural bank

Private banks

11 The Agricultural Sector has been

suffering from the problem of water

scarcity in the past years.

Establish a group of small dams on valleys

found in the desert to reserve rainfall water

(water harvest) to be used for agricultural

purposes and livestock watering. Also increase

the ground water reservoir.

Ministry of Water Resources

11 Deterioration of the field irrigation

networks, canals, and the public filtration

(drainage) networks.

Constant and continuous maintenance should

be provided for the field irrigation canals and

the drainage networks.


2. Legal Procedures


1 Laws and bylaws that regulate the agricultural

investment operation, and secure the investor’s

rights, are not clear.

It is essential to disclose laws and bylaws of

agricultural investment, and articles of those

laws need to be clarified.

The House of Representatives at the Iraqi

Parliament


2 Most of the agricultural land in the Western

Desert is left as tribal tenures without any

reclamation projects.

A law needs to be enacted to remove tribal

tenure and declare land for agricultural

investment


Parliament


3 There is a lack of good laws regulating

agricultural operation and land ownership.

Update existing laws to cope with the

economic development requirements

Enact laws to promote agricultural production


Parliament



4 Investors in agriculture face the problem of

others dumping the market with plant and

animal products that compete with the local

A law needs to be enforced to protect

consumers and establish procedures to

prevent entry of plant and animal products


Parliament

41

product. This policy of market dumping swept

over the Iraqi markets after 2003 due to the

absence of control departments and non-

regulated importation.

that do not comply with the approved

standards and specifications. Ministry of Agriculture

The Central Office of Metrology and Quality

Assurance

5 Investors in agriculture still lack the required

knowledge and experience to do economic and

financial feasibility studies before attempting

the establishment of a project

A financial and economic feasibility study

must be submitted prior to attempting the

establishment of an agricultural project in

order to secure its success.

Research Centers

Universities

Consultancy Offices

6 Legislative frameworks required for the

optimal use of natural resources in the Western

Badia are still not in existence

Draft laws and legislative frameworks for

investment in the Western Badia and

announce these explicitly and transparently

through farmers’ and agricultural federations.

The Agricultural Committee at the House of

Representatives/Iraqi Parliament




7 All local agricultural organizations and

federations do not have representatives for

them at the Investment Commission of the

Province

Local organizations and federations and other

stakeholders must be involved in the

Investment Commission as this

representation relates to the economic

decision-making process and they must be

involved in it.


Ministry of State for the Civil Society

Organizations’ Affairs

41

3. Procedures Related to Development of Livestock


1 Lack of scientific and healthy

methods of treatment, vaccination,

veterinary services, and

insemination.

Special centers must be created to employ up-to-date

scientific methods in treatment, vaccination, and

insemination.


Research and specialized centers

2 Natural pasture land is not given

much attention and not developed

yet.

Laws to regulate irrigation processes and avoid over

irrigation must be enacted. Laws must also provide for

clearing landmines in order to facilitate investment and turn

those pasture locations to tourist attractions.



Ministry of Interior

3 Decreasing opportunities in the

poultry production domain due to

hard access to protein fodder,

vaccines, and hatched chicks.

Secure access to vaccination, hatched chicks, and protein

for poultry keepers.

Ministry of Agriculture/ Public Commission for

Livestock

Public Veterinary Company

4 Non-regulated importation of broiler

chickens and table eggs.

Regulate importation of broiler chickens and table eggs in a

manner that does not affect the local production. Ministry of Agriculture

Ministry of Trade

5 There is no pasture land in the

Western Desert due to poor supply of

services including power, water,

health, and transportation.

Establish pasture locations and desert oases provided with

services and a veterinary clinic in order to help shepherds

settle down.

The Cabinet

6 Most of investors in the poultry-

keeping domain face the problem of

suspended operation of most

hatchers, massacres due to terrorist

acts, and looting taking place after

2003.

Rehabilitate hatchers and recover from destructive terrorist

acts


Provincial Council/ Compensation Committee

7 Importation of low quality hatching

eggs and layer hens from

neighboring countries.

Rehabilitate the governmental control centers and put the

imported products under the control of the Office of

Metrology and Quality Control/ Assurance


Agricultural Quarantine


Ministry of Finance

Customs Department

42

4. Procedures Related to Human Resources

SSeerriiaall PPrroobblleemm PPrrooppoosseedd SSoolluuttiioonnss SSttaakkeehhoollddeerrss

1 Farmers have poor knowledge of

proper use and operation of modern

agricultural methods.

It is imperative to revive the role of agricultural

extension. Training must be provided by specialty

centers for farmers in order to develop their

knowledge and help them develop their agricultural

product.

Ministry of Agriculture/Agro-extension

Department

Faculty of Agriculture and Research Centers

2 There is a shortage and absence of

qualified staff and many have poor

knowledge of modern technology.

Staff working in agriculture must receive

specialized training to help them increase their

skills in all domains of agricultural production.




3 There is a negative impact resulting

from migration from rural to urban

areas.

Services must be provided in rural areas to help

reduce the gap between the rural and urban areas. Ministry of Agriculture


4 Graduates of agricultural colleges and

institutes still lack a good level of

competence and skills. This group of

people cannot help advance the

agricultural status if a policy of

innovation and motivation is not set

for them.

Develop performance of those working in

agriculture by having them join several specialized

training events. This will help create experienced

and skilled human resources with good experience

to achieve the balance between demand and supply

for skilled staff.

Ministry of Higher Education and Scientific

Research


Major Proposals and Recommendations to Develop the Private Agricultural Sector in Al-Anbar Province

1. Prepare an extension program for farmers to help them change the traditional methods they are utilizing at present and establish agricultural

research stations.

2. Prepare an integrated program to reclaim land with saline soil and establish integrated filtration sites.

3. Encourage the use of supplementary irrigation systems (dripping, sprayers) and modern irrigation equipment.

4. Issue relevant legislation to protect investors in the agricultural domain.

5. Prepare an integrated program in cooperation with the Arab Organization to Combat Desertification, conserve natural plants in the Western Badia

in order to produce adequate feed for livestock and dig wells to provide potable water.

43

6. Encourage the private sector to import agricultural production inputs (seeds, fertilizers, equipment, machines, and spare parts) and irrigation

systems (fixed sprayers, revolving sprayers, and drippers). These ought not to be monopolized by the Public Company for Agricultural Supplies.

7. Establish plant nurseries to produce good quality transplants to multiply orchards and gardens.

8. Provide good quality species and breeds of livestock and cows to produce milk and meat.

9. Encourage palm trees growing in selected locations in the West Badia, especially since they proved to be needed for some oases.

10. Establish an agricultural project to produce plants that can be used to provide raw ingredients for medicament manufacturing including haloxytom,

artemisia, and ephedra-alata desne. Such plants can be successfully grown in the Province.

11. Substitute costly energy sources currently used with solar systems to generate power.

12. Plant the Jatropha trees on a wide scale to produce bio-fuel. The plant can be successfully grown in Al-Anbar Province.

44

The Private Construction Sector

45

The Private Construction (Contracts) Sector in Al-Anbar

Summary

Many of the infrastructure projects in Al-Anbar Province, especially roads, bridges, railways, transport and transportation networks, water, and

electricity have been partially, or in some cases completely, destroyed due to war conditions. Human development is the other side of the story here.

This development requires the reconstruction and rehabilitation of several health, education, and other service facilities.

The Private Construction Sector lacks the capacity to shoulder the responsibility of reconstructing these projects to build up the economy of Al-Anbar

Province. The reconstruction process requires further transparency and good governance in addition to financial, accounting, and economic

information to assist decision makers. When implementing the required reconstruction projects through contractors, the local private construction

sector should be involved as a core partner. The operation of this sector must commit to transparency and information disclosure as well as conditions

that can make such a role possible. Thus, this vital sector can take the lead as transparency of governmental operations in this respect is seen as an

imperative element for safe procedures, good governance, and integrity. Accordingly, efforts to implement the reform policies and improve the

capacity of local construction sector should be enhanced.

Introduction

The Construction Sector is a main pillar in the development process through reconstruction and building in Al-Anbar Province. It is capable of creating

job opportunities and attracting scientific expertise as well as professional specialties. It can employ both skilled and non-skilled labor as it serves all

the economic sectors, main branches and activities in the province. The construction sector motivates development and is a catalyst in creating a

competitive spirit by supporting innovation to develop the human capital in a competitive market economy. The construction sector is capable of

creating and forming fixed and varied capital. A contractor is the corporate body doing construction and contractors work with official governmental

agencies, offices, and the mixed sector (private-public partnerships) while holding a registration card at the Iraqi Contractors’ Association.

46

First: Methodology of the Profile

a. Core Partners Participating in this Profile

- Al-Anbar Chamber of Commerce

- Federation of Businessmen/Al-Anbar Branch


- Trade Unions/Al-Anbar Branch

- Professionals in the Construction Sector

b. Classification of the Construction Sector in Al-Anbar

Classification of the Construction Sector

in Al-Anbar

Filtration Sites and Shovel out Rivers

Sanitary Networks and Water Treatment

Plants

Contract to Supply Materials used in

national industries

Roads and bridges Building and Housing

47

Second: Challenges of the Private Construction Sector and Proposed Solutions

1. The First Challenge: Costs of Concluding Contracts, their Monitoring and Impact on the Private Sector

Objective: Establish the costs of applications and their processing. These costs include those of organizing and managing businesses that identify the

method of regulating the construction activity, which has an impact on business planning and investment opportunities. High costs of operations result

in market failures and consequently markets do not perform at a competent level.

Background: Contractors, especially those who are of lower economic status, feel the negative impact of high costs of application processing. This

will result in the creation of the suitable environment for financial and administrative corruption, which has a potential to be destructive to private

sector activity.

Proposed Solutions: The several aspects of costs to conclude contracts must be analyzed and considered. They must be observed and implemented by

the contractors in order to decrease costs including the following:

a. Company association and registration.

b. Access to financing and capital (loans and benefits).

c. Access to business information/data and available opportunities.

d. Concluding and implementing contracts.

e. Transporting, importing, and exporting goods.

f. Compliance with laws and bylaws.

Stakeholders: All ministries involved in the sector (Transport, Planning and Finance), the Provincial Council, the Investment Commission, and

professional associations.

2. Second Challenge: Method of Operation of the Private Construction Sector in the Market Economy

Objective: Identify the method of operation of the Private Construction Sector in light of incentives provided by the government and its agencies,

which are the sector’s partners.

48

Proposed Solutions: It is essential to have a full knowledge of the Construction Sector, and how it is operated, as it is still an emerging sector. The

government must provide the relevant incentives (because this sector is a core partner in reconstruction) through the following:

1. The legal framework that regulates the contractual process (including the contract conclusion) and the court system which identifies the mechanism

of dispute resolution as per bylaws regulating the construction sector activity.

2. The impact of governmental ownership on costs of activities and operations (electricity, telecommunications, transport, etc.).

3. Enforcement of laws.

4. The banking system, which identifies the method of financing businesses.

5. Reform the investment environment and provide technical assistance and consultation services.

6. Law of constructions.

7. Transparency, disclosure, and public announcement of opening and awarding contracts.

Stakeholders: All the involved ministries (Transport, Planning, and Finance), the Provincial Council, the Investment Commission and professional

associations.

3. Third Challenge: Lack of knowledge of the mechanisms and methods of construction contracts

Challenge: Introduce methods of contract management, their attributes and interaction with laws

Background: The Construction Sector faces the challenge of government interference and competition.

Proposed Solutions: Methods of construction contracts must be known and applied according to the principle of transparency. Principles of the

market economy must be enforced and corruption incidences must be handled through the following:

a. Method of Invitation to Tenders

It is the preferable method because it helps achieve the public interest on one hand and achieve the principle of equal opportunity among the

applicants on the other. In addition, the contractor submits documents, insurance deposits, and financial offers according to their estimates.

b. Request for Price Quotations:

49

This is the method used in cases when the management cannot identify the specifications and standardized conditions for the jobs to be

implemented. The contractor might be required to submit a detailed and complete study by himself. Such a study is to cover the technical

issues, tables of quantities, blue prints, financial issues, costs, and administrative issues.

c. The Method of Adding up or Deducting from the Amount Provided in the Proposal

The project management considers the tables that the contractor submits. They focus on quantities, prices, and specifications required for

implementation. Then, the proposal is accepted in line with the documents approved by the project management. Otherwise, an appropriate

amount is proposed to complete the work in compliance with the required specifications. In other cases, the project management deducts an

amount on condition that the implementation is in compliance with the same specifications and quality required.

d. Restricted Bidding Method:

This method is used in cases when the contracts to be implemented by contractors are restricted in a certain manner and upon special conditions

(financial and moral). In coordination with the bidding committee, the project management identifies names of the selected contractors whose

profiles prove that they can implement the assignment efficiently and effectively. Then, the committee makes a final and decisive resolution to

select the winning contractor.

e. Mutual Acceptance Contracting Method:

Contracting takes place with the contractor that the bidding committee selects according to special rules. For instance, one contractor or a

certain company monopolizes the required materials, services, or works. Otherwise, the contract is concluded for major technical, political,

military, or financial reasons. It can be also for the reason of initiating the project in a traditional manner and no contractor submitted a

proposal, or proposals submitted are irrelevant to the agency looking for the contract. This method can be used in cases of implementation on

the account of the contractor who failed to implement the contract or when revoking the contract with the agency requiring the assignment.

f. Trustworthiness Method:

This method is used in urgent cases or in cases when no contractors could be reached. It takes place according to the minutes of meeting that

the bidding committee submits to explain the reasons for following this method. The senior manager of the involved department ratifies the

minutes of meeting and awards the assignment on condition that the quantity tables and prices are submitted along with all other relevant

information be attached with the minutes of meeting.

51

g. Direct Implementation Method

This method depends on the intention of the agency requesting the assignment in terms of supplying materials and assigned tasks. The

contractor’s task will be to work and implement, on an actual basis, the assignment to be delivered to the requesting agency. In this sense, the

contractor must identify the quantities, types, and specifications of the materials that the agency must provide. In fact, the private sector will not

prosper unless the business environment creates opportunities for long term profitable investment in terms of disclosure and task processing.

Market dealings must be facilitated because long term investments can never succeed wherever and whenever risks are high. The contractor

must be fully knowledgeable of contract methods to recognize the competition rules of the market economy and strike a balance between the

public and private interest.

Stakeholders: All relevant ministries, (Transport, Planning and Finance), the Provincial Council, and the Investment Commission, and Professional

Associations.

4. Fourth Challenge: Methods to Invite Contractors (Submitting Proposals)

Objective: Create a common vision between public agencies and contractors in terms of methods of inviting contractors to bid on projects in order to

secure transparency, prevent cases of corruption, and optimize selection of the offer submitted by the contractor.

Proposed Solutions: Announce terms of reference that the relevant ministries and other beneficiary agencies need to observe when inviting

contractors in order to secure transparency and prevent corruption cases in order to secure a competitive price and achieve quality assurance through

the following:

a. Invitation through Bidding:

These are used in the case of a large numbers of contractors being available and competing with their proposals. An ad hoc committee will

consider and analyze these proposals to decide the award of bid to one of the competitors submitting the lowest price and best conditions.

These bids can be:

Public Bid: An invitation is announced to an unlimited number of contractors inside and outside the country. Those participating for the

first time need to submit documents and credentials establishing their competitive and financial position (financial position statement, and

a statement of income that the official accounting and tax organs have ratified). In addition, the contractor must provide a legal deed of

51

association of the company and a summary of similar assignments implemented in several places. The contractor must also provide a list

of banks with which they have dealings.

Private Bid: This is limited to contractors and competitors listed in commercial directories and who have a history of good dealings with

the contracting body. Bidders receive direct official letters inviting them to participate in the bid.

b. Implementation upon a Direct Invitation:

When prices are fixed, as is the case in public institutions and monopoly, the invitation is extended to the contractor.

When the decision is made as of which method of implementation will be used, invitations are extended to solicit proposals. The proposals

comprise of two basic sections: general conditions, and the table of quantities. This dealing can be indirect through the media or direct to a certain

group of contractors in the following cases:

One contractor monopolizes work.

Prices are fixed.

There are bilateral agreements in this respect.

In all cases, the history and profile of the contractor must be provided including previous experience and registers, classification of contractors,

credentials of implementing previous assignments, and issues related to the sector of constructions and contractors. Therefore, there must be some file

keeping for contractors and the jobs they have implemented along with their contact details to be ready upon request and whenever necessary.

Accordingly, the following needs to be observed:

a. Clear terms of reference must be provided to select a bidder. These must be transparent and free of favoritism to secure just and fair competition.

b. Create an e-gate for tenders and bids to facilitate submittal of applications and build a database for each applicant.

c. Restructure the classification of contractors according to companies and depending on three basic criteria that show the competitive edge for

contractors. These include financial considerations, human capital (administrative and professional competencies and experience), and volume of

dealings and deliver (customer base).

d. Issue a list of names of ill-reputed contractors as proved by their performance and history vis-à-vis a list of well-reputed contractors including

their deliverables, successful activities, and work history.

52

Fourth: Problems and Proposed Solutions

53

1. Quality Assurance and Construction Laboratories

PPrroobblleemmss PPrrooppoosseedd SSoolluuttiioonnss SSttaakkeehhoollddeerrss

Generally, the governmental and

private quality assurance approaches

are insufficient to measure the extent of

quality achieved in the building

processes. This also takes into

consideration the resulting corruption

and bureaucratic cases which incur

further social and economic costs for

the Country.

1. Set a mechanism for quality assurance and testing of imported

and local construction materials.

2. Increase the number of public labs to reduce time and cost of

processes, and achieve prompt delivery and high quality work.

3. Enable the private sector to establish and build labs to test

construction materials in line with mechanisms and controls,

such that the goal of governmental cooperation is achieved while

improving the quality of the materials.

Ministry of Planning and

Developmental Cooperation/

Central Office for Metrology

and Quality Assurance

Ministry of Municipalities

Ministry of Housing and

Construction

Investment Commission of Al-

Anbar


2. Quarries and Construction Materials

Problem Proposed Solutions Stakeholders

11 There is no explicit governmental

plan to assemble factories and

establish companies of production,

importation, and construction

materials.

Provide the required mechanism to permit entry of alternative

construction materials.

Open a free market for all manufactured construction materials, and

equipment used in the production process in certain places.


Developmental Cooperation



Construction

Ministry of Finance/ Public

Department of Taxes


Investment Commission of Al-

Anbar



22 The government is not controlling

the quarries operation in the province

due to the lack of machinery to

enforce the law.

Support importation of construction materials by providing the

required deregulation and reducing taxes.

3 Lack of controls in establishing

quarries

Draft a new bylaw for quarries and methods of filling and packaging.

Do geological surveys to identify quarries that pass lab tests.

Consider an exemption or reduction of taxes imposed on quarries

involved in production processes.

54

44 No protection is provided for owners of

quarries and manufacturing plants to

help them evade dominance of non-

governmental and illegal operations of

quarries and manufacturing sites.

The state must control all such sites in the province especially where

raw and primary materials are produced. Laws must be enforced as

well.

3. Contractors and the Public Sector Departments


11 There is not a supportive culture

among government employees and

other groups in the community

towards contractors’ trustworthiness.

Raise awareness among state employees of their tasks in relation to

other groups in the community such as the importance of the

contractors and construction companies. Also create a labor force

with legal, administrative, accounting, and engineering specialties.

People in such a group must be known for their integrity.

The Public Sector Institutions and

Departments


Media Institutions

22 Governmental agencies do not deal

with contractors from the

perspective that they are core

partners in the construction and

building process.

Launch a satellite channel specialized in contractor work to introduce

their activities as is the case with Al-Aqariyah (real estate) channel.

4. Standards and Specifications of Quality and their Description in most of the Existing Projects


11 The contractor’s interest does not balance with the

public interest. Focus is usually on the beneficiary

agency and the lowest prices no matter what the

quality should be.

Enact new laws and bylaws in response to recent market

trends and exchange rates. These must observe the

international best practices of standardized contract forms

as a reference.



Construction


Developmental Cooperation/

Central Office of Metrology and

Quality Assurance


22 Lack or scarcity of construction labs involved in

quality assurance testing.

Upgrade lab equipment to cope with international

developments in this field and establish autonomous

private non-governmental labs

55

3 The National Commission for Quality is not an efficient

monitoring body.

Support the role of the National Commission of Quality

and have all agencies participate in it (private sector,

consultants and experts).

44 There are no committees specializing in the tendering

process to submit advice to the Central Committee at the

beneficiary agency with direct interest in the contract or

project to be implemented.

The beneficiary agency of all official institutions must

participate in central committees at the provincial level in

order to guarantee integrity and implementation of the

contract in compliance with regulation and quality.

5. Referrals of Contracts and Requirements of Project Delivery


11 Lack of transparency of information related to bid

awarding or disclosure and inaccessibility to

information

In cooperation with the government, draft solutions and

effective formulas to abolish bureaucratic and

administrative corruption. In this context, the referral

decision cannot be personal and disclosure must be

maintained.

Institutions and Departments

of the Public Sector

Professional Associations

Provincial Council of Al-

Anbar

22

Bid awarding is not taking place according to the

qualifications of contractors as they relate to the

type of project. Neither the ministry nor the

beneficiary department knows the contractual

method that can be approved or the announcement

method to be implemented.

Adopt sound forms of bid awarding in compliance with

the classification bylaw and avoid any preferential scores

unless to the minimal requirement is fulfilled for

contractors according to their classification.

33 Approval is frequently at the lowest price as a core

standard for awarding a contract, which affects the

value, quality of performance and implementation

period.

Revisit the principle of the “lowest price” and more

closely review all aspects of the project proposed,

including type of materials used, the period to deliver the

project and its promptness as criterion for awarding the

bid.

44 There are public companies competing with the

private construction sector for contracts.

Issue an official resolution to deny public companies the

permission to get involved in activities that the private

sector can implement to revive the market performance

and prevent monopoly.

56

6. Financing, Coordination and Indemnities


11 There is no fund to provide financial assistance to

contractors to solve the problems of delayed

delivery due to force majeure factors.

Establish a fund to provide support and solutions for

financing problems with implementation of construction

contracts.

Provide for the right of indemnity in exceptional cases or

in cases of unusual increase in prices of primary materials

and in mutually agreed rates.

Ministry of Finance

Ministry of Housing


Institutions and Departments

of the Public Sector in their

capacity as beneficiaries of the

contract

Provincial Council of Al-

Anbar

22 There is no specialized bank to provide lending

services to contractors under controls of special

requirements.

Facilitate the task of establishing specialized banks to

finance construction works according to classification and

experience of the contractor as a basic factor to give a loan

and have classification and affordability of the contractor

as a special criterion for guaranteeing the credit provided.

3 The beneficiary agency defers operational down

payments to the contractors.

The beneficiary agency needs to prompt the down

payment to help the contractor implement the contract

7. Problems of Implementation


11 High prices, market fluctuations, and instability in

the local and international scenes.

Enforce valid articles and laws to protect the contractor. The Cabinet

House of Representatives at the

Iraqi Parliament

Ministry of Construction

Ministry of Justice


22 Non-compliance with disbursement bylaws,

procrastination, and administrative corruption.

Regulations of disbursement of due payments overlap and

no fixed criteria are put in place to control this issue. Laws

need to be enacted in order to protect the contractor and

provide a flexible mechanism to facilitate refund

transactions by the government.

Approve a mechanism of transparent disbursement of

down payments within intervals set for this purpose

57

8. Competition and External Participation


11 There are no real partnerships between local contractors

and their foreign peers.

Enact laws to regulate real partnerships between

local and foreign contractors in order to facilitate

transfer of knowledge to support competition

capacity and technical and engineering issues to

local contractors.

The Cabinet

House of Representatives at the Iraqi

Parliament

Ministry of Housing

Ministry of Justice


22 There are legislative frameworks and laws that hinder

the operation of contractors and expansion of their

projects.

Provide equal opportunities for local and foreign

contractors to win bids.

3 Preferential treatment by the government and laws that

give preference to local contractors especially when it

comes to financing, refunding, and bid awarding

Provide facilities, grants and loans to all without

any exceptions to support solvency and economic

capacity of both the local and foreign contractors.

58

Private Transport Sector

59

Private Transport Sector in Al-Anbar Province

Summary

The transport sector assumes a significant role in being one of the major sectors to aid in establishing rules in order to rebuild infrastructure,

which is necessary for the development process, especially in Al-Anbar Province. The private transport sector in the province faces several challenges

which also impede advancement of other sectors. In Al-Anbar Province, the transport sector can enhance trade, develop exchange routes, and increase

investment opportunities in the province. It can help enhance the province’s economic and trade relations with other provinces and the foreign world.

Al-Anbar has an important strategic location as the border exit to Aqaba Gulf in Jordan. Through it oil, industrial, and service products are exported

and goods and services are imported. It also has a road network connecting it with Jordan and Syria making it a regional trade hub of great importance

as it contributes to improving the level of economic activity in the province, raising living standards, and increasing individual income. Al-Anbar’s

transport sector can even connect Aqaba Gulf with Basra Port.

Introduction

The private transport sector is one of the major economic sectors as it connects areas with each other and backs up the socio-economic activity.

It is a basic component in the investment process and a linking chain between the production centers and consumer areas. It also plays a role in setting

production units as well as providing production inputs inside and outside the country. It helps export finished products to local and international

markets and deliver transportation services for citizens.

The Sector has increasing importance due to geographic expansion through construction of modern roads, rehabilitation and maintenance of

existing roads, upgrading of passenger stations and implementation of several strategic projects in this domain. It is imperative to advance capacities

and potentials of the private transport sector and enhance its internal and external services. This will enhance economic integration and prosperity, as

well as develop local trade and exportation activities.

For Al-Anbar Province, this sector can support trade, develop exchange, increase investment opportunities in the province, and strengthen its

economic and trade relations with other provinces and the foreign world. Al-Anbar enjoys a strategic location. It is the border exit to Aqaba Gulf

(Jordan) and facilitates exportation of oil, industrial, and service products vis-à-vis importation of goods and services. In addition, the province is

connected with several neighboring countries- namely, Jordan and Syria. Therefore, it is a regional trade hub of great importance and helps increase

61

the level of economic activity inside the province as well as increasing incomes of individuals and improving their living standards. Through this

border passage, Aqaba Gulf links to Basra Port either by land roads or by electric railways. The Euphrates can also be made of use as it is 2900 km

long and extends to the far west towards the southern part of Iraq.



- Chamber of Commerce of Al-Anbar

- Businessmen Federation/Al-Anbar Branch


- Trade Unions/Al-Anbar Branches

- Private transport companies

- Professionals from the Transport Sector

b- Classification of the Private Transport Sector in Al-Anbar Province

The Transport Sector consists of the following:

1. Land Transport including:

1. Vehicles:

i. Land transport of passengers

ii. Land transport of tourists

iii. Land transport of loads including:

1. Goods and services (foodstuff, manufactured items…etc)

2. Land transport of raw materials (crude oil, construction materials)

2. Transport by railway

3. Air transport

4. Marine transport (through the Euphrates)

61

Classification of Private Transport

Sector

River Transport Air Transport Land Transport

Vehicles

Passengers Loads

Oil Products Goods

Passengers

Railways

62

Second: Attributes of the Private Transport Sector in Al-Anbar Province

Following are the major attributes of this sector:

Land Transport- Vehicles:

1. The private transport sector within the province is limited to land transport only. Still, this domain is lagging behind in terms of models and

modernity of vehicles due to the quality of roads and the low proficiency of drivers and regulatory agencies.

2. There are several transport vehicles that are not registered at official agencies. These are not covered in official surveys and statistics that may

result in certain indicators and significances when studying this sector and the process of its development and improvement.

3. Usually, vehicles operating in the province are owned by private/informal sector operators. Companies that can operate in a better proficiency

can be established to operate this domain in compliance with an explicit transport policy.

4. This sector is still operating in a random, informal manner without any regulatory frameworks for both the private and the public sectors.

5. Vehicles including passenger vehicles, oil derivative tanks, and trucks are still lagging behind modern technologies due to their old models.

6. There are ample restrictions imposed by neighboring countries (especially Jordan and Syria) on transporters and drivers, which results in

restricted transport of passengers to and from Iraq.

7. Parking lots in the province are still poorly kept and unorganized. Most of the operation takes place outside them.

8. The developing role of the informal transport of passengers has resulted in:

a. A continuous increase in the number of vehicles operated for transport fares in a random and informal manner.

b. Lack of proficient operation and safety/security elements as well as technical and quality requirements.

c. Lack of private firms to operate tours; if available, owners lack proficiency in managing and organizing private tours.

d. These firms or offices do not have the required licensing to operate.

9. Loads of trucks are characterized with the following:

a. Loads of trucks operated for land transport do not cope in reality with the technical level of roads, which results in damage to the roads.

b. There is an increased number of units annexed to the vehicle (trails for good transport), which represents risks on roads and negatively

affects safety conditions.

63

c. Transport vehicles belonging to the private and public sectors are obsolete.

10. Regulatory and administrative procedures that govern the licensing process of driving or opening passenger/goods transport firms are still poor

and there are no controls for accountability purposes.

11. There are no maps or blueprints to facilitate the use of certain roads. Lighting of roads is poor and night signs are not available.

12. The province does not have rest houses on highways to help promote and increase the volume of tourism.

13. The low performance level of human resources and their lack for technical skills whether in terms of licensing, practicing, conditions, controls

and methods of effective control and follow up.

14. Funding that competent agencies provide for transport sector of all types is insufficient, which results in poor infrastructure of roads that are

narrow in width.

15. The lack of networks to connect highways surrounding the province with internal roads. These networks connecting the province with other

provinces are still few. Therefore, the province is isolated to a large extent from the outer local and international world, which resulted in the

loss of large opportunities that people in the province could have made use of to develop economic activities and social conditions in the

province.

Land Transport- Railways:

Following are the main attributes of railways in their current status:

1. The low level of technical competence of the railway facilities, insufficiency of equipment and many other inputs required for operation and

spare parts has had a negative impact on safe and controlled technical operation.

2. There is a need for relevant annual large investments to maintain the network and construct the infrastructure required for the railway facility.

3. Railways are not operated due to the poor implementation of overall maintenance which is a result of the economic embargo conditions and the

events taking place after 2003.

64

River Transport:

Along with road transport, river transport provides a prompt solution for some of the internal transport problems given that the time element is of high

importance in the transport market. The river transport cannot compete at present, as the industry has been deteriorating. Although, river transport has

several advantages as follows:

Providing infrastructure (Euphrates) for no significant cost compared with the infrastructure cost for railways and land roads.

Low cost of operation of river units. Average fuel consumption for river units is much lower than fuel consumption for other transport means,

which positively reflects in the transport fare and environmental dimensions.

Half of the river transport units (50%) can be built up locally.

Type of goods: river transport is optimal for low value goods and other long and large weight equipment.

65

Following are the main challenges facing river transport in Al-Anbar province:

The river navigation route has been left without any development during the past years, which resulted in its deterioration and difficulties for

regular river transport.

Investments available for building the infrastructure for river transport are insufficient, which has resulted in delayed implementation of

pertinent projects.

Transporters and commercial firms are still unaware of the importance of this method in their commercial transactions. Even the public sector

is still unaware of this importance. This has led to the private sector stakeholders abstaining from using this means of transport in their

operations.

Air Transport:

The province does not have an international airport to help develop commercial linkages, although a qualified basis for this branch of transport is

available by virtue of the military airports on the military bases (especially in Al-Habbaniyah).

The Critical Relation between the Transport Sector and Trade Sector:

Road networks still lack a highway close to the province to connect the capital with other provinces in order to increase trade exchange and

facilitate the production process.

Trade development is dependent on accomplishments of the transportation sector. If this sector is strong, effective and capable of striking its

objectives and development requirements as well as coping with recent developments on the international economic level, it will surely

enhance commercial exchange within the province and between other provinces.

The Transport Sector is still poor in terms of the legislative framework and modes of operation. This results in some negative impacts on

transport of goods and passengers, cost and competitive potentials in general.

The distinct geographic location of the province is not well invested in yet. It connects Iraq with the international Aqaba Port in Jordan. Iraq,

therefore, is a very important linking chain between the Orient in Asia through Basra and Europe through Al-Anbar Province and the Aqaba

Port.

67

Third: Problems and Proposed Solutions

1. Strategy of the Transport Sector in the Province


1 Poor development of the infrastructure of the

transport sector in the province, especially

roads and bridges that connect areas in the

province with each other.

Increase the number of projects to construct networks

of roads and bridges, and maintain and improve those

in existence to achieve objectives and requirements of

economic development as well as cope with economic

development.


Ministry of Transport





2 Financing for the transport sector with all its

domains is insufficient.

Increase financing for projects of transportation and

revive the public-private partnerships in order to

improve the performance level of this vital sector. Such

a partnership must provide plans and strategies to

transport vehicles with large capacity and latest state of

the art technologies.

Ministry of Finance





Ministry o f Housing

3 There are no clear studies or plans for the

private transport sector in order to develop or

increase the efficiency of this sector inside

the province.

Conduct studies and draw a clear strategy to develop

operation of the transport sector. Implement a new

network for highways to have new roads employed in

the socio-economic development process in remote

areas. This network must provide dimensions of length

and width with a focus on areas that have relatively

concentrated traffic.



Experts from the Academia

Research Centers

68

2. Regulatory, Legal, Administrative and Supervisory Procedures


1 Some of the current legislation frameworks

do not cope with the economic directives of

the transport service delivery.

Some substantial changes must be introduced to

validate legislation in order to develop the structure of

transport services.

House of Representatives/ Iraqi

Parliament


Ministry of Finance

2 There are no regulations to help create

relevant and effective environment for the

private sector involvement in transport

projects.

Provide rules and regulations to create an adequate and

conducive environment for all types of participation of

the private sector to finance and operate these projects.

A focus must be on international best practices

especially when it comes to rights and commitments of

the involved agencies and in a manner to back up direct

investment in transport services and provide a

diversified funding base.





3 Insufficient supervision and monitoring of

the operation of vehicles and traffic

management, which results in low quality

service delivery.

Highlight the role of supervision and monitoring by

enacting and issuing laws to guide the process and

provide accountability.

Public Department of Traffic



4 Poor lighting and traffic signs and the lack of

road maps to facilitate the process and

increase safety of transport.

Work on increasing and developing road maps and

provide adequate lighting for roads. Ministry of Electricity



5 The insufficient awareness of traffic issues

due to inadequate controls and lack of

training of those working in the transport

sector.

Provide prompt and intensive training courses in order

to improve performance and raise public awareness as

well as compliance with laws and bylaws that govern

the transport process.



6 There are no parking lots for the transport

vehicles that achieve modern international

specifications to deliver high quality

services.

It is necessary to conduct a study to establish the

potential to develop and establish parking lots

according to high standards in order to provide smooth

flow of vehicles. This will help develop the transport

operation inside the province and between the

province, the capital and other countries.




7 Scarcity of information and data of the It is essential to build a database for this sector in order Ministry of Transport

69

private transport sector which can provide

indicators to the extent of development of

this sector and methods to develop it in the

future.

to enable researchers and scholars to investigate the

sector status and its problems. Ministry of Planning

8 There are no insurance schemes for the land

transport vehicles and passengers.

Have the private sector and the mixed sector (PPP)

establish insurance companies and urge those already

operating in Baghdad to launch branches in the

province while developing the existing ones.


Insurance Companies

9 The infrastructure required for roads and

railways connecting areas inside the

province and connecting it with other

provinces has not yet materialized.

Set a strategy with clear features for the infrastructure

in the province in line with the national strategy as a

whole.




11 The need calls for upgrading the transport

vehicles as they have become obsolete.

Replace the vehicles operated at present with newer

ones in compliance with controls issued by relevant

agencies.


Ministry of Interior (Traffic

Department)

Ministry of Trade

11 Model parking lots available for vehicles are

not sufficient.

Build new parking lots to cope with the population

density and number of cars. Ministry of Transport


Municipal Departments

Construction Planning


12 The supervisory role of monitoring drivers is

still insufficient, which encourages them to

not comply with the routes allocated for

them

The law must be enforced to ensure commitment of

each driver to their route and not allow for such

violations. A tariff must be identified for each route

according to its length and distance. The Ministry of

Oil must provide mobile fuel stations at each parking

lot and for reasonable prices.


Ministry of Oil



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Fourth: Major Proposals and Recommendations to Develop the Private Transport Sector in Al-Anbar Province:

1. The several subsectors under the Transport Sector must network.

2. Information and Communication Technology (ICT) at the railway station must be developed by virtue of its importance in transporting

passengers and goods.

3. Models of foreign experiences in advanced countries must be introduced to establish a comparison for the river transport domain.

4. Increase attention given to ICT to serve the land transport sector.

5. Draw general policies to guide transport plans, maps, and programs for the building of roads and bridges.

6. Set plans and programs to develop land and river transport means and connect the province with the capital through an effective transport

network.

7. Establish, operate, and maintain stations and parking lots (garages).

8. Promote investment in the sector of transport, roads and bridges in cooperation with the Provincial Investment Commission.

9. Set bases, standards, and technical specifications for the transport means and monitor the same.

10. Have the private sector participate in setting policies for the importation of transport vehicles of all types.

11. Coordinate plans and programs of organizations operating in the domain of transport.

12. Adopt technical standards and specifications for roads, bridges, and all transport vehicles, and monitor their enforcement.

13. Issue licenses for road projects.

14. Set the regulations, rules, and fees of using roads as well as relevant controls in coordination with relevant stakeholders.

15. Improving the transport sector calls for introducing developments to several transport domains as follows:

a. Air Transport: To develop airports, handling systems, management of airliners, and management of electronic monitoring of goods

traffic, logistic centers, and safety and control standards for air transport.

b. River Transport: Draw navigation maps, and survey depths to draw relevant maps.

c. Develop railways: By implementing the following:

Use refrigerated wagons to transport goods that require refrigeration.

Extend routes and provide clearance services for imported and exported goods with the supervision of the railway management.

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Establish a company for taxi and light transport services at all railway stations.

Provide express mail services through railway operations.

Establish an insurance company to provide insurance coverage for goods and passengers against theft, fire, and other types of

insurance.

The existing railway must shift to transporting goods and create a new railway, operate by electricity, to transport passengers

with a high level of standards and technologies and high safety and competence. However, the private sector and investors must

implement such a project as they are the ones to be trusted with such a development process. Investors are to conduct the

feasibility studies required for this project.

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Trade Sector in Al-Anbar Province

Summary

The Private Trade Sector is a main driver for all industrial and agricultural functions and activities. It is the core basis for development process

and an indicator to the success or failure of development as can be seen from the balance of trade which is a major component of the balance of

payment. Accordingly, the private trade sector in Al-Anbar is covered herein in order to highlight the extent of difficulties and challenges that it stands

especially under an imbalanced competition that the industrial and agricultural products are exposed to. This competition causes serious damage to

industry and agriculture due to the dumping policy, which has resulted in the suspension of several projects especially those that fulfill the local

demand by virtue of Al-Anbar location as a border area. However, the informal sector is still dominant and producing negative impacts on the status of

agriculture and industry for the population in the province. This requires the state to assume an effective role to back up the private trade sector and

create solutions for all its problems while securing a selected safeguard mechanism for goods and services produced locally. The involved agencies are

still uninterested in conducting studies and make efforts to identify imbalances and structural distortion in this sector. They do not pay attention to the

structural imbalance of exchanging goods in trading transactions among the provincial areas, and between the province and others.

The province, to a large extent, depends on foreign imports due to the current lack of internal trade. This has resulted in a deficit in its balance

of trade and dependence on limited goods (most of which are agricultural items used in the commercial exchanges inside the province). These

exchanges are the backbone of the economy of the province vis-à-vis the severe decrease in the volume of trade exchange of industrial goods due to

the poor performance of the industrial sector. This reveals a high indicator of openness of the economy of the province to the external world and the

heavy reliance of the economy on foreign markets to market its products. It also indicates the province relies on foreign products to fulfill its needs for

consumer and investment goods and services, and submits to the foreign agencies, which results in increasing sensitivity to external developments.

Introduction

The Trade Sector in Al-Anbar Province assumes a major role in reviving other economic sectors. It helps handle the excess demand for the

several local products and it fulfills the economic needs of the province including goods and services required for the development and reconstruction

projects. It also helps manage the surplus of the local demand for the product.

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The relation between the trade and industrial sectors is strong as can be seen in the contribution of the trade sector to the industrial sector in the

form of capital formation and goods (machines, equipment and other supplies) in addition to primary and raw materials provided through importation.

It also helps the industrial sector to market its excess product on foreign markets and niches through exportation.

However, the relation between the trade and agricultural sectors is a prominent and important one. This relation contributes to the economic

development and trading of agricultural products to achieving food security as it results in covering the needs of the province that suffers from a deficit

in agricultural production. It helps achieve stability of prices. In addition, trading with agricultural products is a basic pillar for the economy of the

province. If the local agricultural product volume in the province exceeds the volume of consumption, an agricultural product surplus will be set for

exportation and can help improve the country’s balance of trade.

Interchange between the trade sector and the transport sector has become a strong one as the trade exchange transactions concur with the

movement of goods from one place to another. Whenever the trade volume increases, the land/marine/air transport operations increase.



Chamber of Commerce of Al-Anbar

Businessmen Federation/Al-Anbar Branch

Federation of Industries/Al-Anbar Branch

Trade Union/Al-Anbar Branch

Private Trade Firms

Professionals from the Trade Sector

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b. Classification of the Private Trade Sector in Al-Anbar Province

The Trade Sector consists of:

1. Intra trade among areas in the Province; it consists of the following:

o Wholesale Trade

o Retail Trade

2. Inter Trade between the Province and other provinces; it consists of:

o Export Trade

o Import Trade

o Transit Trade

Private Trade Sector

Inter-trade between the Province and other Provinces

Imports Transit Exports

Intra-trade among areas in the

Province

Retail Trade Wholesale Trade

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Second: Attributes of the Trade Sector in Al-Anbar Province

1. Governmental agencies do not conduct studies or show interest in identifying structural distortions in the Sector. Agencies also fail to highlight the

major role of trade and its impact on the other economic sectors in the province as well as highlighting the exports of agricultural and industrial

raw materials.

2. The goods’ structure of trade exchange within the province between the province and other provinces demonstrates distortion. The province relies

on foreign trade largely due to the lack of internal trade. This has resulted in a deficit of the balance of trade.

3. Inside the province, the sector depends on limited goods most of which are agricultural items. It is the pillar of the province economy. On the

other side, there is a severe decrease in the trade exchange volume for industrial goods due to the declined industrial sector.

4. The high indicator to the openness of the province economy to the external world reveals the heavy dependence on the economy of foreign

markets to market its products and fulfills from them its needs for goods, and consumer and investment services. The sector is submissive to

foreign influences, which increases its sensitivity to external variables.

5. Private and public institutions do not exploit economic and productive items on an optimal level due to the poor marketing on the local market.

This market has a certain absorption capacity. There are similar imported goods that compete with goods on the local market. Many production

capacities are wasted as is the case now with the agricultural commodities. This shows that local goods cannot compete with imported goods.

6. Accordingly, the economic integration in the province is still not maintained with other provinces. It is not integrated locally among the areas of

the province itself. This has resulted in concentrating trade activities in the center of the province on the account of other districts not being as

developed. This has resulted in high prices; and the problem exasperates due to the difficult trade transport among these areas.

7. The infrastructure is severely deteriorating especially in the domain of transport, telecommunications, and other major services that facilitate the

trade exchange process. Moreover, the volume of investments provided for this part by both the public and private sectors is insufficient.

8. Economy of the province is unstable as it is affiliated to the Iraqi economy as a whole. This is mainly reflected in the sector of trade, especially in

terms of changes in prices and rates.

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9. The major sectors in the province face the challenge of the policy of dumping of imported goods into the local market taking advantage of the

severe shortage in the local product and its poor competitive capacity. Moreover, the governmental economic policies to prevent such cases are

irrelevant and cause damage to Iraqi traders, industrialists, and farmers in general.

Third: Problems and Proposed Solutions


1 Lack of legal and regulatory frameworks that govern

the operation of trade companies and identify their

commitments, duties, and rights.

Issue legislation frameworks to regulate the operation

of those companies, track previous legislation

frameworks, and support them to enhance the activity

of these companies.

House of Representatives/ Iraqi

Parliament

Ministry of Trade

Ministry of Justice

2 A clear shortage of financing for trade to help

expand its scope of work. When available, financing

is limited to conventional banking financing which is

characterized by several complications especially in

relation with banking collaterals.

Provide support for current forms of bank financing

especially in facilitating opening of documentary

L/Cs, and diversifying the financing forms, which

requires further financial and banking reforms.


Commercial Banks

3 Methods of payment among traders (especially the

wholesale trade) are inadequate. They are limited to

local currency and impede the trade exchange

process.

Support the banking operation to cope with the

volume of trade exchange. Raise banking awareness

for traders and help them expand their knowledge base

in all banking issues and modern methods of payment.

Consider the establishment of a stock exchange

market based on scientific standards to enhance

economic activities especially trading.


Commercial Banks

Civil Society Organizations

Experts from the Academia

4 The large gap of technological expertise and e-

communication media in the province among traders

has resulted in further isolation of the province.

State of the art telecommunication networks must be

developed by expanding investments in

telecommunications. Telecommunication towers must

be installed to provide for prompt communication and

access to information that helps and assists all

investors including traders, industrialists and farmers.

Ministry of Telecommunications


5 Experts and operators of ICT are still few in the

province.

Provide training for specialized staff especially those

holding academic degrees. Ministry of Telecommunications

Higher Education Institutions

6 There are strict restrictions on Iraqi traders operating

between Iraq and neighboring countries which

Agencies in charge of negotiation with neighboring

countries especially those maintaining strong trade Ministry of Foreign Affairs

Ministry of Trade

78

results in a low volume of trade exchange and their

negotiation capacity.

relations with Iraq are important in facilitating entry of

Iraqi traders and giving traders visas to go to these

countries for trading purposes.

7 There is an obvious and severe shortage of insurance

activities that enhance the trade exchange operations.

Invite insurance companies to operate in the province. The National Insurance Company

Other insurance companies

8 The province is in need of more regulated

commercial areas with an infrastructure that is

conducive for investment in this sector.

Establish trading communities inside the province and

give them orientation to be able to cope with advanced

trading activities.

Ministry of Trade

Investment Commission


9 There are no free trade zones to enhance trading

activities. This is true not only at the provincial level

but at the national level as well.

Conduct a study to establish the possibility to create

free trade zones like those spreading all over the

world.

Ministry of Trade



11 There are no sites and yards for trade exchange

between Al-Anbar and other provinces. In fact, the

province is still living almost in complete isolation

from those provinces due to security conditions.

Attempt to establish sites and yards to facilitate

smooth movement of goods from the province to other

provinces and vice versa.

Ministry of Trade



11 Tax calculation is not transparent especially when it

comes to customs duties, which have a major impact

on international trade exchange.

Enhance transparency of tax schemes and imposition

and the method of calculation. Also, raise tax

awareness among investors in relation to all activities

especially trade.

Public Department of Taxes

Chamber of Commerce


12 Negligence of trade transport through railways that

facilitate the process of transport for a low cost

compared with other means.

Use railways to support trade activities in the province

knowing that these railways connect Baghdad with all

parts of the province.


Ministry of Trade


13 Poor performance of institutions implementing trade

transactions. This especially applies to the Chamber

of Commerce. This Chamber can be a major

contributor in developing trade.

Enforce the role of institutions involved in trading

especially the Chamber of Commerce in order to

enhance cooperation between traders and trading

companies. This will help revive the trade activity in

the province.

Ministry of Trade

Chamber of Commerce

Commercial Firms

Traders

14 Imported goods and services are not submitted for

testing and quality assurance.

Stress the importance of control and quality assurance

agencies in inspecting imported goods especially

foodstuff and enforce quality and standardized

specifications.

Central Office of Metrology and

Quality Assurance


Ministry of Trade

Ministry of Health

Public Department of Customs

business agenda of al-anbar province english...business agenda of al-anbar province 8 ......

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