Basra, Iraq

Oil exports remain still high, but the revenue goes steep down, due to the oil prices. The government of Iraq is eager to attract additional foreign investments, but a number of obstacles with security and economic stability and signs of administrative disintegration between 3 main communities, make their task very difficult. GDP of Iraq in 2014 was $221 billion, growth rates recently were 13.9 % in 2012, 6.6 % in 2013 and -2.4 % in 2014. The major sectors are – agriculture as 3.3 % of total economy – wheat, barley, rice, vegetables, dates, cotton; cattle, sheep, poultry; industry is 64.5 % – petroleum, chemicals, textiles, leather, construction materials, food processing, fertilizer, metal processing; services take 32.2 %. Labor force is 9 mln.; unemployment is 16 % in 2012. The prevailing semi desert nature in the region and lack of support, make the agrarian business very weak. National trade exports: $94.5 bln. – crude oil 84%, crude materials, food and live animals; China 23.8%, India 18.4%, US 15.7%, South Korea 7.7%, Greece 5.9%, Italy 4.9%. Trade imports: $62.34 bln. – food, medicine, manufactures; Turkey 23.3%, Syria 17.3%, China 16.6%, US 4.5%. Debt: $58 bln. Electricity production is 62.3 bln. kWh; consumption is 53.41 bln. kWh; import 8.2 bln. kWh; generation capacity is 11.2 GW, with 92 % fossil and hydro is 7.6 %. The grid is very unstable, with frequent black-out, caused frequent public discontent and demonstration is summer time, in Basra. Crude production is 3.4 mln. bbl/day, export is 2.4 mln. bbl/day, reserves 144 bln. bbl. Refines production – 590 000 bbl/day, consumption – 750 000 bbl/day, export 22000 bbl/day, import 242 000 bbl/day. Gas production is 1.18 bln. m3, consumption is 1.18 bln. m3, reserves are 3.158 trillion m3. Basra is a calm region, with very rare terrorist attacks, where the oil extraction and processing are the only possible businesses. The region is covered by poverty, negligence; none maintained infrastructure, dirtiness everywhere, dead animals and rats on the streets or floating in the famous canals and river Shatt-Al-Arab. The electricity is constantly off and on, water from the tap is unhealthy. Another problem is that after the invasion and in the next 13 years hundreds of thousand educated people left Basra, since no business opportunities for them were existing. Public transport does not exist for security reason. As public infrastructure need large investments for rehabilitation or for construction, the authorities started a program involving international organizations and companies. The oil prices slump down put very strong negative impact on the plans. Numerous of the planned development projects of the Governorate have been postponed or stopped. The main opportunity for Iraq is the support from Arabic countries, US, EU, Russia and other, in fighting with ISIS. But obviously this war will continue for a long time and will cause big destruction to the country. Another strong threat is the price of oil, the main budget supporter to the state. Predictions are that it will stay flat, or with slight increase. Iraq doesn’t have another business, which can balance the necessary revenues to the economy. Weaknesses of the country are numerous – widespread corruption, non-maintained infrastructure, insufficient basic services, low skill labor capacity and irrelevant laws. Legislation reform is vital; it must be updated, answering the new realities in the society, in order to support the country development. Unemployment remains high throughout the country despite the subsidized public sector. The signs of disintegration between Kurds, Suni and Shia, must be handled carefully, in order the integrity of Iraq be kept. Strengths are in connection of the geography, the river, the Gulf, with vast opportunities for tourism, as several Biblical and Muslim important places are in close vicinity. Basra has city channels, which can become touristic attractions. The river Shatt-Al-Arab which goes through the city and to the cost of the Persian/ Arabian Gulf is very attractive places for recreation. This will bring visitors from the neighbor countries Iran and Kuwait and all those together will bring prosperity to the population. The river is very attractive transport corridor Turkey – Syria – Iraq – Gulf – Indian Ocean. Encouraging private enterprise would make it easier for Iraqi citizens and foreign investors to start new businesses. The Governorate of Basra must take decision for a modest and constant infrastructure program for development, involving private entrepreneurs. Corruption down and security up, constant infrastructure investment and maintenance, culture and tourism will bring the peace and prosperity to the people.