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DE RUEHGB #2811 2460623
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FM AMEMBASSY BAGHDAD
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C O N F I D E N T I A L BAGHDAD 002811 
 
SIPDIS 
 
E.O. 12958: DECL: 09/01/2018 
TAGS: EINV ETRD PGOV ECON IZ
SUBJECT: NIC CHAIRMAN OPTIMISTIC DESPITE CHALLENGES 
 
Classified By: EMIN Marc M. Wall for reasons 1.4 (b,d). 
 
¶1. (C) SUMMARY: National Investment Commission (NIC) 
Chairman-Designate Ridha continues to aggressively court 
foreign investors, even though the GOI has not promulgated 
implementing regulations for the 2006 Investment Law to 
support his mission.  Ridha is creative and well-intentioned, 
but he is also so eager to bring investors to Iraq that he 
may be seeking work-arounds (in the absense of a true 
investment regime) and may be promising investors protections 
that he cannot necessarily gaurantee.  END SUMMARY. 
 
¶2. (SBU) Economic Minister-Counselor (EMIN) made his initial 
call on NIC Chaiman-Designate Ahmed Ridha September 1.  Ridha 
described his mission to encourage foreign and domestic 
investment in expansive terms, saying that what he is really 
trying to do is create an entirely new "economic philosophy" 
in Iraq.  After 40 years under the yoke of a command economy, 
the task is not easy, he said.  During the Saddam era, "the 
private sector was the enemy, but now we are asking it to 
lead" Iraq's reconstruction and development.  Ridha described 
with some frustration ministers of government who still view 
"investment" as a series of projects that their ministries 
plan, fund and fully control.  The free market will take hold 
here, he concluded, but it will take time and a lot of 
re-education. 
 
¶3. (U) Turning from philosophy to concrete successes, Ridha 
brightened.  He stated that the NIC has facilitated USD 74 
billion in FDI over the past five months.  This includes an 
Iraqi-led international consortium's USD 13 billion 
investment in the Grand Basra port, and a potential USD 17 
billion airport construction investment from a Saudi-led 
consortium.  (The latter  is temporarily on hold because of 
security-related allegations surrounding one of the Saudi 
investors.)  Looking forward, Ridha said he has been 
negotiating a potential USD 38 billion investment in housing 
and university buildings in Najaf with an international 
consortium that includes US investors; a USD 5 billion 
medical center and pharmaceutical plant with an Iraqi-Saudi 
joint venture; a possible USD 30 billion 
Kuwaiti-Emirati-Iraqi nationwide housing investment; and what 
he called a Chinese-funded "Disneyland" in Baghdad (pricetag 
unspecified). 
 
¶4. (SBU) While all of this is good -- or potentially good -- 
news, Ridha did suggest that there is growing frustration 
within the NIC over the lack of implementing regulations to 
support the 2006 national investment law and over the Council 
of Representative's failure to confirm him officially as NIC 
chairman.  A full set of implementing regulations was drafted 
four months ago and delivered to the Shura Council.  The 
Shura took six weeks to approve and to refer the regulations 
to the Council of Ministers (COM) for promulgation, but when 
it finally acted it did so with enthusiasm, Ridha reported. 
Now, however, the COM still has failed to move the texts 
forward.  EMIN noted that this lack of a clear regulatory 
framework -- as well as current delays in passing legislation 
that permits foreign firms to register and operate legally in 
Iraq -- are a clear disincentive to American firms.  Ridha 
did not dispute this, but encouraged US firms to come to Iraq 
anyway.  Tell US investors to come -- the NIC will ensure 
that they are treated fairly and their investments protected, 
he urged.  "If American investors want to wait for all the 
regulations to be in place, they will wait ten years."  Ridha 
also noted that Asian, Middle Eastern and a slowly increasing 
number of European firms are moving investments forward. 
 
¶5. (C) COMMENT: The legislative and "philosophical" 
disincentives to investment in Iraq -- as well as the 
security concerns -- remain very real, and no one knows that 
better than the still-unofficial NIC chairman.  For these 
reasons, we truly admire the optimism, enthusiasm and 
creativity Ridha has brought to his task.  However, in this 
meeting we sensed that frustration may be prompting Ridha to 
try to work around the fact that his government thus far 
proven unable to produce a valid legal investment framework 
for him to publicize.  We also sensed that he may be asking 
investors to come to Iraq under conditions that are not ideal 
and perhaps offering them promises of protection that he may 
-- or may not -- be able to gaurantee.  END COMMENT. 
BUTENIS