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.
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2 comments:
Though Iraq’s main export is based on oil, they still don’t make money out of it. In the past articles that I’ve read, Iraq doesn’t receive all the profits made. Due to having lack of equipments and other resources for extracting oil, Iraq depends on other countries to help with the extraction which means that other countries would profit from it more. Therefore, by having foreign investments, it means that more foreigners would be entering their country and investing their property, taking up more of Iraq’s space and possibly more profits. Although having foreign investment would help improve the economy, I don’t think foreign investors may plan to invest in Iraq. By having this foreign investment plan, it wouldn’t attract too much attention due to the fact of the violence happening in the country. Though the plan may be good, but the constant violence and problems occurring in Iraq may not attract as much attention for foreign investments as the government would like it to be.
Sara Wong
Block F
Rebuilding Iraq to a prosperous country is a goal that may never be accomplished. An empire destroyed in the span of a couple years may take more than decades to rebuild. However, it is good to see that the Iraqi government is trying to rebuild Iraq's infrastructure and promote immigration. A large portion of Iraq's previous population was lost in the war in form of refugees and casualties. This new amendment allowing the purchase of property by foreigners was also published with the goal of increasing the overall money pool of Iraq. Although Iraq obtains a lot of money from the exporting of oil it is not enough to support the country and rebuild old resources. A lot of the oil is extracted by foreign countries and not enough of the profits go to Iraq. I think that this new program allowing the sale of houses in Iraq is worth a shot and, even if it doesn’t succeed, a good idea. It addresses the two main issues, of a lack of a labor force and the lack of revenue. In Iraq’s current state, I believe that it should be in their best of interests to try any and every idea that has even the slightest of chances to allow them recovery.
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