After experiencing a period of economic deadlock imposed by the unsettling situation in Iraq and the Middle East, the Kurdistan region is regaining its former status of being the bustling business hub of Iraq.
Owing to its liberal business environment that favors local and international private investment, a population of nearly 5.5 million accounting to a large consumer market, and a marked insufficiency to satisfy local demand, the Kurdistan Region harbors the right elements to attract foreign investments and build strong trade relations. As a matter of fact, the trade sector is one of the key drivers of economic growth in the KRG and Iraq at large.
“Despite the multiple challenges facing Kurdistan, the KRG has been able to maintain stability and security. Kurdistan Region remains safe and secure and is open for business.”
KRG Foreign Minister Falah Mustafa
According to the Kurdistan Board of Investment, imports account for 85% percent of the estimated US$5.0–5.5 billion of annual external trade in the Kurdistan Region, with Turkey being the largest trade partner, dominating multiple sectors including construction. The KRG struck a 50-year energy deal with the latter that also covers gas exports to Turkey as of 2017, based on previous plans.
A survey conducted by the Ministry of Trade and Industry revealed that 94% of the KRG’s business transactions involve 15 countries, and categorized imports into 21 clusters led by electronics, iron products, followed by food products including groceries and poultry.
“We have been able to establish good relations with more than 45 regional business chambers and business unions like Turkey, Iran, UAE, Lebanon, Jordan, Egypt, Tunisia, and many other Arab countries.”
President of the Erbil Chamber of Commerce and Industry, Dara Jalil Khayat
Based on data formulated by the Central Statistical Organization of Iraq, trade dealings for 2015 have registered a noticeable increase from previous years. The value of total net trade balance amounted to $7.8 billion for that year.
The value of total imports for commodity and oil products was $41.6 billion in 2015, registering a 12.4% increase from the previous year and a compound growth rate of 11.7% from 2013.
The data also indicate that the highest value of imports ($8.5 billion) equivalent to 21.7% of the total imports of non-oil merchandise originated from Turkey, followed by China ($6.5 billion) and South Korea ($4.6 billion).