Chapter 10: Industrial Organization in Canada

Source:http://in.reuters.com/article/fundsNews/idINL451337720090604?pageNumber=1&virtualBrandChannel=0

Summary:

On June 4th, 2009, an amendment regarding foreign investors to be able to own Iraqi estate was passed through parliament. Foreigners will be able to invest in land for only housing projects. Investors will only be able to sell land and property after the project is complete. In this war-torn country of Iraq, the government plans to encourage foreign capital to rebuild after years of conflict. Iraq hopes to have about $500 billion of foreign capital by 2015 with millions of new houses. The government of Iraq hopes foreign investors does not worry about violence after years of conflict. The violence has fallen since last year.

Connection:

The connection between this article and the textbook is foreign ownership. In the textbook, foreign ownership is defined as investment by foreign residents in a country’s assets and financial securities. Although in our textbook talks about only foreign investments in Canada, we can use the same analogy to foreign investments in Iraq. In the textbook, foreign ownership is split into two categories: foreign direct investment and foreign portfolio investment. The article of allowing foreigners to invest in Iraq can be described foreign direct investment. Foreign direct investment implies managerial control of a business by persons in a foreign country. Like Canada, having foreign ownership brings upsides to the country’s economy. This would help the Iraq’s economy in create employment, access to capital, and outward orientation. Three of these benefits are described in the textbook as the few of many benefits of foreign investment.

Personal Reflections


After the years in war, the country is trying to rebuild itself. It is time for the Iraqi government think ways to prosper its country. Because Iraq’s economy is known for only oil export, they try to turn their estate into money. I agree this is a great way to allow investors from out of the country to create money flow in the economy. However, it might be hard to attract foreign investors since there is still continuous violence in Iraq. In addition, you can only make investments in house projects. This might not be appealing as building factories which big corporations in foreign countries would like. All in all, I believe the Iraqi government has made a stepping stone to rebuild Iraq to a prosperous country.