With vast oil and gas reserves, a large well-educated workforce, and about $450bn of major projects planned or underway, there is no doubting the huge potential of the Iraq market for anybody looking for new project opportunities in the Middle East. The reality however is that the country’s vast potential has been undermined for decades by war, insurrection and sanctions, leaving it facing major political, economic and capacity challenges.
An improvement in Iraq’s security situation in 2018 following its “liberation” from the Islamic State in Iraq and Syria (Isis) in December 2017, combined with an improving economic outlook, gave Iraqis hope that perhaps they could look forward to a period of stability during which they could start rebuilding their country.
But an improvement in security is one thing, being able to pay for projects is another. Sadly, the fall in oil prices since 2014 has put a halt to many government-funded schemes as Baghdad simply can’t find the budget for them. As a result, there has been an emphasis in the last few years for the state to seek contractors and investors to self-finance projects. In theory this would seem a sensible approach, but in reality internal politics and geo-political tensions mean that attracting international investment is a tall task.
The net result of this is that Iraq continues to perform well below its undoubted potential. In 2018 contract awards just about exceeded $8bn compared with almost $25bn just six years earlier. For the market to prosper in the long run, it will need either oil prices to return to levels above $100 a barrel or for a dramatic softening of the political situation. This would seem unlikely in both cases, unfortunately.
Iraq Projects Report H1-2019 is the update to last year’s popular report. Focused on data, it is aimed at helping companies create strategies for targeting and growing the market by providing quick and easy use data snapshots. It uses almost exclusively adjusted data from MEED Projects, the region’s leading online projects tracking service. With 15,000 active projects tracked and more than 35,000 in total in the database, MEED Projects makes it possible to quantify current, historical and future trends in the projects market in the region.