Dr. Muhammed Shukri is Chairman of the Board of Investment (BOI) in the Kurdistan Region Government. He has a bachelor's degree in economics, a master's degree in the privatization of industrial projects in Iraq, and a Ph.D. in consumer protection in the KRG. Dr. Shukri has been engaging in numerous roles and activities in the Government of Kurdistan since 2001.
In this interview, Dr. Shukri discusses the investment scene in the Kurdistan Region. He reflects on the commitment of the regional government towards attracting investment opportunities into the region, highlights the role of the BOI in fulfilling that goal across multiple levels, and emphasizes the promising opportunities available to investors in different sectors.
Could you give us a brief introduction about you and your background?
My name is Dr. Muhammed Shukri. I have a bachelor's degree in economics, a master's degree in the privatization of industrial projects in Iraq, and a Ph.D. in consumer protection in the Kurdistan Region of Iraq. I have been practicing government work since 2001, where I served as the Director of Planning and Follow-up at the Ministry of Interior, after which I became the director of the Strategic Research Department in the Kurdistan Region Security Council. In 2011, I started working as the general director of the Anti-corruption and Organized Crime Department in the region. Furthermore, I was a member of the Economic Reforms Committee in the Kurdistan Region Presidency for the years 2011 to 2019. Currently, I am the Chairman of the Board of Investment in the Kurdistan Regional Government since the beginning of the 9th cabinet.
What is the Kurdistan Board of Investment? And what services does it offer?
In 2006, the KRG took a major step forward by establishing the Board of Investment (BOI) to spearhead investment attraction efforts. The BOI is responsible for promoting and supporting investment opportunities in the Kurdistan region, granting investment licenses, offering incentives, and fostering a conducive business environment.
What is the potential of the Kurdistan Region in terms of investment?
Kurdistan Region is rich in natural resources, including oil and natural gas, and has fertile land and a climate suitable for agriculture. The region's economy is growing, providing opportunities for investors to participate in the region's economic development and benefit from its expanding market. In addition, there are other factors that make the Kurdistan Region an excellent and attractive investment destination, including political and economic stability, favorable investment legislation, a skilled and educated workforce, and diverse investment sectors.
How do you evaluate the region in terms of risks of investment?
Kurdistan Region is known for its security and safety, having largely avoided security incidents over the past two decades. This security has given investors and business owners the confidence to initiate investment projects, allowing businesses to operate without interruption or concern for the safety of their employees.
Both politically and economically, Kurdistan Region has experienced relative stability in recent years. Despite some challenges and even during times of conflict in Iraq, the Kurdistan Regional Government (KRG) has managed to maintain a relatively stable political environment and a conducive atmosphere for international companies and organizations to operate in the region.
What are the most promising sectors for investment in KRG?
The region offers multiple sectors open to investment. This diversity allows investors to choose the sector that best aligns with their interests and expertise. We offer exciting investment opportunities in key sectors such as agriculture, industry, tourism, energy, and ICT. Specific opportunities include livestock and dairy, construction materials, light manufacturing, and the development of resorts. These sectors have high potential and present attractive avenues for investors to capitalize on the region's strengths and contribute to its economic growth. These are just a few examples of the exciting investment opportunities available in our region, and there are plenty of other opportunities in these sectors and many others.
What methods is the Board of Investment applying to make Kurdistan investment-friendly?
The Kurdistan Region is considered a safe and stable area. Its economy has experienced significant growth over the past two decades and has received major investment from both local and foreign investors.
We offer a range of incentives through our investment law to attract local and foreign investors. These include the right for foreign investors to own the entire capital of their projects established in our region. Additionally, we provide exemptions from non-custom taxes and duties for a period of 10 years, as well as land allocation for investment projects and the provision of utilities. Investors can also enjoy the full repatriation of investment profits and capital. Furthermore, imported raw materials for investment projects are exempted from customs duties for a period of 5 years. These incentives aim to create a favorable environment for investment.
Could you tell us about your projects and initiatives?
The Board of Investment in KRG has taken proactive steps to enhance the appeal of Kurdistan Region to foreign investors. We have implemented various strategies to simplify processes and make the region more attractive. We have set up a special team, the Foreign Direct Investment Unit, to help out foreign investors and created the Invest Kurdistan brand to spread the word about the region and its opportunities. In addition, we have decentralized licensing by giving the rights to general directorates in provinces to accept and facilitate investment licenses. The BOI has also opened new general directorates in a few districts. We are proud to collaborate with international organizations like UNDP, WAIPA, and IFC to improve the investment landscape further. Together, we are working towards a more prosperous future for the Kurdistan Region. Furthermore, we have established agreements with local universities and organizations to team up, especially for studying important sectors and finding new chances.
All these initiatives demonstrate that the KRG-BOI is focused on making Kurdistan an attractive place for foreign investments in the Middle East. And we are not stopping there - we are committed to keep making things better in terms of policies, procedures, and promotions.
You have recently signed an MoU with the International Finance Corporation (IFC). Could you please tell us what it aims to achieve?
The International Finance Corporation (IFC) is a member of the World Bank Group (WBG). The purposes of our agreement include stimulating and creating conditions conducive to the flow of private capital, both domestic and foreign, into productive investments in our region, which are projected to attract over $1 billion in private investments. This will be achieved through mapping and streamlining the investment license approval process, providing investment generation and facilitation support to the clients, and developing the legal and regulatory framework that will enable private development and management of special economic zones (SEZs).
Do you have any initiatives in the banking sector and access to finance to support the investment scene?
The Kurdistan Region has witnessed the rapid development of financial services in recent years, with 28 banks now operating in the region. The regional government has recently taken steps to accelerate financial inclusion and development of financial services through (My Account) initiative requiring all government employees and contractors to be paid digitally directly to bank accounts. This and other reforms will open up a wide range of opportunities for investors in banking, non-banking financial services, digital payment services, and FinTech in general.
How is the energy sector in Kurdistan? and is the Board of Investment approaching the renewable energy sector and promoting it?
Despite existing challenges and the need for many new projects, KRG is actively working to enhance infrastructure to present a promising business environment. Renewable energy projects, Industrial zones, and transportation initiatives are strategic priorities. The BOI is keen to attract private investment in renewable energy and waste-to-energy projects through independent power producer (IPP) models. Currently, there are two solar plants that generate 3MW, with a 100MW solar project underway in Erbil.
BOI has been striving to enable research efforts and knowledge exchange, such as in their most recent cooperation with KAPITA, Soran University, and Tishk Universities. Could you share with us more about that?
BOI's commitment to research and knowledge exchange is evident in the various activities and agreements we've undertaken recently. One noteworthy collaboration is our Memorandum of Understanding with Soran Research Center, Tishk University, and KAPITA Business Hub. The Kurdistan Regional Government Board of Investment (KRG-BOI) is dedicated to generating investment opportunities, providing top-notch services to investors, and contributing to the rebuilding of Iraq, with a particular focus on the Kurdistan region.
Through our partnership with KAPITA, we are working hand-in-hand to bolster business development and promote investments in the Kurdistan region. This is achieved through in-depth research on specific sectors, industries, and areas of interest within the region. Similarly, our cooperation with Soran and Tishk University further emphasizes our commitment to advancing knowledge and driving growth in the Kurdistan business landscape.
Could you share with us some of the success stories of investing in Kurdistan?
Our region has already granted investment licenses to 1,128 projects, attracting a total investment capital of $67 billion, including around $12 billion in FDI and joint ventures. We are actively working through the FDI unit to increase these numbers and bring more foreign investors to our region. As we mentioned, our partnership with IFC is a source of pride for us. This agreement is set to significantly increase the number of investment projects in the Kurdistan region. Additionally, we are proud members of the World Association of Investment Promotion Agencies (WAIPA). As a member of WAIPA, our main focus is to spotlight Kurdistan on the global stage, highlighting the wealth of untapped opportunities available in our region. Their support in providing us with the necessary tools and resources is invaluable. This will enable us to make well-informed decisions and craft effective investment promotion strategies.
Even with the success we have achieved and the incentives we offer, we aim to increase investment in the region, unlock the untapped potential across various sectors, and seize new opportunities.