By Gordon Platt
Signs of growth: Baghdad hosts a procession of bankers
The International Monetary Fund approved a $3.6 billion loan for Iraq, the largest such loan the country has received. The two-year standby agreement will help Iraq implement its development plan, rebuild its infrastructure and reform its banking sector. Iraq is on the verge of an investment boom, according to Hussein Al-Uzri, chairman of the state-run Trade Bank of Iraq. Al-Uzri says a growing number of foreign bankers are flying to Baghdad to consider investing in projects such as power plants, shopping malls and hotels, as well as roads, airports and schools. The Trade Bank is focusing on attracting Iraqi capital back to the country.
In neighboring Iran, China has emerged as the leading economic partner, as Western firms have withdrawn due to international sanctions. China’s bilateral trade with Iran totaled $21.2 billion in 2009, up from $14.4 billion three years earlier. Meanwhile, Caterpillar, the world’s largest maker of construction and mining equipment, said it would no longer allow its non-US affiliates to do business with Iran.
Iran Khodro, the biggest automaker in the Middle East, is looking to build a production plant in Turkey to boost exports to Russia, Ukraine, Bulgaria and Romania. The state-owned company already assembles autos in Azerbaijan, Belarus, Venezuela and Argentina and has a joint venture with Renault of France that produces the Logan, which is sold in Iran as the Tondar 90.
Oman’s Public Authority for Electricity and Water awarded Iran’s Sunir Group a $75 million contract to build a water pipeline in the Al Jabal al Akhdar resort. Iran and Turkey signed a new customs agreement that aims to boost bilateral trade to $30 billion in a few years from the current $11 billion.
Meanwhile, Standard & Poor’s lowered Jordan’s long-term credit rating by one level to BBB-. It cited weaker medium-term fiscal flexibility and a rise in government debt. Mohammed Abu Hammour, Jordan’s finance minister, says the government has cut spending in the first two months of this year.