The country is split into 18 governorates or provinces, with three under the authority of the Kurdistan Regional Government, and 251 municipalities. The Iraqi Constitution, which was signed in 2005, provides for a model of decentralised political and administrative government, with authority devolved to the governorates.

Baghdad

The Baghdad province is the capital governorate of Iraq, and includes the city of Baghdad and the wider metropolitan area. Although it is the smallest of the provinces, at just 4,555 square kilometres (sq km), it is the most densely populated with nearly 7 million people. It is also one of the most dangerous, with almost 20 per cent of attacks in 2013 occurring in the city.

Baghdad is suffering from a serious shortage of housing, with more than 860,000 new units required in the city. The ad-hoc manner of reconstruction work carried out since the US-led invasion in 2003 has made developing the city complicated. A masterplan for Iraq as a whole was sponsored by the Italian government in 2004, but with no specific provision for the capital. Instead, government ministries and the Baghdad Mayoralty, assisted by multinational forces and international institutions such as the World Bank, have launched projects in a piecemeal fashion according to immediate needs and available funds.

It is only since 2009 that a masterplan for Baghdad has been developed. Among the more ambitious schemes included in the plan is the $3bn Baghdad metro project, which will involve two lines crossing the city on a 39 kilometre route, linking sectarian areas that were in conflict at the height of the insurgency.

Basra

The Basra Investment Commission was established in 2006 under the Iraqi Investment Law, as part of the National Investment Commission. The commissions are tasked with granting investment licences, and promoting and securing strategic investments.

As the only province with access to the Gulf, Basra also contains all six of Iraq’s ports

The province has been at the centre of Iraq’s oil and gas industry since the discovery of the Rumaila oil field in 1953. It houses the headquarters of the South Oil Company, which handles upstream exploration, production and transport in the south of the country.

Along with oil, Basra is also home to petrochemicals and fertiliser plants that are owned and operated by the State Company for Petrochemical Industries. The Petrochemicals Complex One (PC-1) unit at Khor al-Zubair, near Basra, was built in 1976, and is still operational, although war and sanctions have taken their toll on the plant’s productivity.

The National Investment Commission is seeking foreign investment in the expansion and modernisation of Iraq’s petrochemicals sector, in particular at Basra. In the years since the US-led invasion, the Oil Ministry and the Industry & Minerals Ministry have held talks with several integrated energy and petrochemicals firms over new investments, including US companies ExxonMobil Chemical and Chevron, and UK/Dutch energy firm Shell Group over the rehabilitation of the Basra complex.

As the only province with access to the Gulf, Basra also contains all six of Iraq’s ports, the largest being Umm Qasr, which has a deep-water quay with 22 berths. Umm Qasr also has warehouses covering an area of more than 175,000 square feet. The other ports, including Al-Maakal and Abu Flus, all require significant investment to become operational or reach capacity.

Anbar

At 138,228 sq km, Anbar in the west of Iraq is the largest of the country’s 18 provinces, but is also one of its smallest in terms of population, with only 1.4 million residents. Since the end of 2012, the province has become one of the most violent in Iraq, with near daily security incidents.

In terms of oil and gas resources, the province is largely unexplored. However, the Akkas gas field, which was discovered in the 1990s, is now being developed by a consortium led by South Korea’s Kogas. The group plans to increase production to 400 million cubic feet a day by the end of 2017. Engineering, procurement and construction contracts for the field’s gas processing plants were awarded to South Korea’s Daewoo Engineering. 

The government hopes the development of the field will spur greater economic activity in the province, which is comparatively hydrocarbons poor. It has planned gas exploration across Anbar, but no international firms bid for the blocks in the last round. The government is also planning a major crude oil export pipeline that will run through the province to Jordan. The city of Haditha will be the starting point of the pipeline, housing pumping stations and crude oil storage facilities. Further pipelines from Haditha are planned for Syria and Turkey.

The Anbar Investment Commission is seeking investors for a diverse range of projects including shopping malls, cement and glass plants, fertiliser production and power generation. The region has reserves of limetone, sulphur, phosphate, silicate and magnesium to name just a few.

Karbala and Najaf

The provinces of Karbala and Najaf house two of the holiest sites for Shia Muslims. Karbala is the site of the martyrdom of the Prophet Muhammad’s grandson, Hussain, and is venerated by Shias, who make annual pilgrimages to the city.

Expanding religious tourism is a particular focus of the government as it looks to foster non-oil growth

Najaf, which is just to the south, is another holy city for Shias as the burial site of Ali, the cousin of the Prophet Muhammad and father of Hussain. The Najaf seminary is the centre of Shia political power in Iraq and one of the most important centres of Shia teaching in the world. 

Expanding religious tourism is a particular focus of the government as it looks to foster growth in the non-oil sector. Several new airports are planned to cope with the anticipated rise in the number of pilgrims. The Transport Ministry is looking to build the Middle Euphrates airport between the cities of Karbala and Najaf.

Once completed, the new airport will be vying for passengers with the existing airport in Najaf, which opened in 2008 and has an annual capacity of 3 million passengers. The government estimates that more than 35 million people will visit the two cities each year.

As a result of the huge influx of tourists and pilgrims, the two cities have witnessed a dramatic rise in real estate prices. Hotels located near the Imam Hussain Mosque in Karbala now draw so many visitors that real estate prices for hotels have exceeded $4,000 a square metre (sq m) and are expected to increase as the expansion of the shrines is completed. By comparison, Baghdad prices are just over $2,000 a sq m. Investment is also being sought in industrial, housing and power projects.