Iraqi MPs of all stripes have complained for years that the country’s investment legislation contains too many flaws to attract foreign business. The first few weeks of the new parliamentary session will give them an opportunity to do something about it.
Parliament returns from its summer holiday having failed to pass government-proposed amendments to the Investment Law before the recess. The amendments would give foreign contractors the right to buy land to use for housing projects.
The plan to redevelop the Rasheed airbase in southeast Baghdad is now a test case not only for the legislation, but also for Iraq’s democratic and legislative processes.
Foreign companies will be watching carefully. All are aware of the huge potential of the Iraqi market, but few will commit money when the legal framework offers no security on their investments. If parliament approves the law, the first phase of the $20bn Rasheed project could move forward and work would follow on other contracts as foreign investors re-examine Iraqi projects.
However, with national elections scheduled for December, there is a danger that the Investment Law could drift as political groups in parliament jockey for position and patronage.
Political self-interest should not be allowed to delay critical steps to accelerate the country’s reconstruction. This being Iraq, unfortunately, few would count against it.