Making Room for Small Business: The Iraqi Economy Remains Dominated by Large, State-Owned Firms, with Small and Medium-Sized Enterprises Struggling to Secure the Investment They Need to Expand
Gavin, James, MEED Middle East Economic Digest
Operating a business in Iraq today is a job few companies, however ambitious, would covet. The positive mood created by the improved security situation after 2007, together with the trickle-down effect on the economy of four years of high oil revenues, has given way to a period of introspection.
Foreign investment outside the hydrocarbons sector is still largely absent, while raising capital from domestic sources is proving an arduous task for local companies with ambitions to expand.
"It is not a promising year for us in the private sector," says Ismael al-Bahrani, head of Baghdad-based air-conditioning supplier Western Breeze Trading Company, part of the family-owned Bahrani Group. "Iraq's economy still depends totally on oil, and when the price of crude comes down, this affects investment."
Since the overthrow of Saddam Hussein in 2003, Iraq's largest private companies have been heavily focused on sectors related to the reconstruction of the country's infrastructure, such as cement, steel and power. The largest of these, H Mahmood al-Bunnia & Sons Group, with more than 6,000 employees, has established footholds across sectors such as construction, food and drink, dairy and financial services, as well as traditional agency representation for importing foreign brands.
But outside the elite family corporates, the private sector has yet to make a mark on the Iraqi economy, which still labours under a legacy of state ownership that dates back to 1964, when most large and …
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Publication information: Article title: Making Room for Small Business: The Iraqi Economy Remains Dominated by Large, State-Owned Firms, with Small and Medium-Sized Enterprises Struggling to Secure the Investment They Need to Expand. Contributors: Gavin, James - Author. Magazine title: MEED Middle East Economic Digest. Volume: 53. Issue: 34 Publication date: August 21, 2009. Page number: 30+. © 1999 MEED Middle East Economic Digest. All Rights Reserved. COPYRIGHT 2009 Gale Group.
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