Iraq is a once in lifetime opportunity
The fall of Saddam Hussien has brought down new opportunities in the Iraqi oil sector for American oil companies. According to OPEC records the ban on sale of Iraqi oil after the first Gulf War has resulted into the preservation of Iraqi oil fields and now Iraq has second biggest oil reserves in the world. Iraq is a once in lifetime opportunity No matter on what side of the war the company was but it is ethical after the fall of Saddam regime to help out the Iraqi people to make the most of their lives.
By investing in Iraqi economy the company will not only provide additional employment to Iraqi citizens but also bring in new technology which will help the economy in long run. Secondly as Iraq is on the path of becoming a liberal and secular democracy it is much more ethical to do business compare to countries like Saudi Arabia where the oil wealth is controlled by few which has led to concentration of wealth in few hands and the benefits are not passed on the people.
By making an early move in the Iraqi oil the company will put itself in a position to enter the lucrative and fast growing market of India with which Iraq and United States have good business relation. India’s demand for oil has been increasing in past half a decade with booming economy and already companies like Chevron have started making investment in the refining sector and if DWI able to make foray then it can secure the future of the company (The Economics Times, 2006). Apart from oil the company can venture into telecommunication, housing, financial services, environment and manufacturing sectors.
Investing into these sections will help in fostering the growth of middle class in Iraqi society which for years has been systematically destroyed under the oppressive regime and left on the margins. By investing in these sectors will generate massive employment compare to the oil sector so it will bring prosperity to the middle class of Iraqi society. If one looks holistically then this will go a long way in establishing a sound democracy in the country as best democracies in the world are formed on the back of strong middle class and relative equality in the society.
Legal perspective The commercial laws in Iraq are formed in an environment familiar to any western business and are one of the most progressive in Middle East. According to Iraqi Ministry of trade the next set of laws will include bankruptcy protections, enforceable property rights, and a well-functioning judicial system. For investment in Iraq the Iraqi government has formed the Iraq Investment and Reconstruction Task Force. The task force makes the laws for investment in Iraq the salient features of the present law are (Iraq Ministry of Trade, 2006)
According to article 10 of the law investors from every country will be given equal treatment and opportunity. Article 12 : Iraqi workers will be given preference but companies are free to hire workers which it deem necessary for the operation and Iraqi workforce doesn’t have enough technical know how. All the companies are exempted of any fees for the first three years when the license to investment is granted. No fee for three years will not only help in adjusting the initial investment but also help in securing long term profitability.
Security concern for American employees in Iraq All American employees hired by American companies working in Iraq are covered under Equal Employment Opportunity Commission (EEOC). Selecting partner in Iraq At present Iraqi government is striving to build a free economy and has virtually brought down all the trade obstacles in terms of trade and protectionism. Tariff in Iraq are at 5 percent and corporate tax rate in the country is only 15 percent. The Secretary of Trade Gutierrez met with Iraqi Minister of Trade Dr.
Abd-al-Falah al-Sudani in September 2006 and discussed five key areas of trade and one of them is privatization of state oil companies (Iraq Ministry of Trade, 2006) . This will provide massive opportunity for DWI to enter the Iraqi market.
Bibliography
- EEOC(2006) “Employee Rights When Working for Multinational Employers” Retrieved on 19th November 2006 from http://www. eeoc. gov/facts/multi-employees. html
- Fram, Alan. (2004). “Iraq costs are $119. 4 billion and rising; lawmakers ponder how money might have been spent. ” Associated Press. http://www. boston. com/dailynews/153/wash/Iraq_costs_are_119_4_billion_aP. shtml
- Iraq Ministry of Trade (2006) “New Investment Laws”. Retrieved on 19th November 2006 from http://www. export. gov/iraq/
- The Economics Times (2006)“Chevron picks 5% in RPL for Rs 1350 cr- The Economic Times” Retrieved on 19th November 2006 from economictimes. indiatimes. com/articleshow/1487859. cms
- Washington Files (2004) “Evans Urges Private Investment in Iraq”. Retrieved on 19th November 2006 from http://canberra. usembassy. gov/hyper/2004/0212/epf408. htm
