Investment and the private sector

Executive Summary

Iraq does not start from the absence of a private sector. The 2021 Labour Force Survey estimated approximately 5.3 million private-sector workers compared with 3.261 million in the public sector, but also found that fewer than 10% of private-sector workers had social security coverage at the time. Since then, Workers' Retirement and Social Security Law No. 18 of 2023 has expanded the legal framework for coverage. The issue is therefore not whether the private sector exists, but its quality, employment formality and ability to invest, expand and bear risks. ¹¹²⁴

The business environment reveals a deeper gap. The World Bank's 2022 Enterprise Survey covered 1,019 formal private non-agricultural establishments with five or more workers. Only 2.3% of firms in this sample had a bank loan or line of credit; 90.2% of investment was internally financed, while banks accounted for only 0.1% of investment financing. Moreover, 44% of firms reported competing with unregistered establishments, and bribery incidence in at least one measured transaction was 50.5%. This is not a picture of an ‘inherently weak private sector’, but one operating within financing, regulatory and enforcement markets that insufficiently reward formal expansion. ¹⁰

Iraqi banking data confirm that credit growth alone is insufficient. Total cash credit extended by banks operating in Iraq reached IQD 73.5 trillion in 2024, including IQD 43.9 trillion to the private sector, or 59.8% of the total, up 11.1% from 2023. Yet the Financial Stability Report shows that 68.39% of private-sector credit went to households, compared with 31.29% to companies. The governing indicator must therefore be not ‘private-sector credit’ alone, but credit to productive companies, its maturities, collateral, the share of investment financed by banks, and portfolio quality. ¹²¹³

Foreign investment makes the need to separate indicators even clearer. Iraq's country sheet in the World Investment Report 2025 records an inward foreign direct investment flow of negative USD 7.458 billion in 2024 under balance-of-payments methodology. This does not mean there were no foreign projects or that ‘investment in Iraq is negative’ in the everyday sense. Net flows are affected by withdrawals, intercompany debt, reinvested earnings, liquidation and transfers. By contrast, IFC announced approximately USD 1 billion in new investments and partnerships in energy, infrastructure, agribusiness and finance in September 2025, following more than USD 2.5 billion invested and mobilised since 2005. Licence values or announced project values must therefore not be combined with net FDI flows as if they were the same measure. ¹⁵¹⁶

Iraq already has an investment law, a national commission, governorate commissions and a one-stop shop. The amended law sets deadlines for agencies' approvals and provides investment guarantees. An electronic company-registration service also exists through the Ur portal, combining name reservation, registration, tax number and social security number in one process. This infrastructure, however, does not establish that the investor journey is short and predictable. Actual time must be measured from complete application to licence, and from licence to land, utilities, construction and operation, alongside return rates, contact points, rejection reasons and time to resolve administrative disputes. ³⁴⁹

An important institutional signal emerged in 2026: the National Investment Commission directed a redrawing of the investment map towards industrial and high-quality projects with strong economic returns, after reoffering strategic opportunities in April because earlier bids failed to meet conditions. These developments support the chapter's philosophy: opportunity quality and bankability matter more than opportunity counts; investor quality and execution capability matter more than announced commitments; and productive investment must pass performance gateways from allocation to commercial operation. ⁵⁶

The central question and operational definitions

The central question is: what must the state change in rules, services, finance, land and partnerships so that the risk-adjusted return on productive investment in Iraq exceeds rent-seeking and speculative alternatives, and the private sector becomes a principal generator of value and formal jobs by 2045, without policy turning into privileges, monopolies or hidden fiscal commitments?

4.1 Chapter glossary

4.2 Measurement rule

The chapter distinguishes four often-confused figures: announced project value, investment-licence value, capital expenditure implemented, and investment flows recorded in national accounts or the balance of payments. These are not interchangeable. Nor are ‘registered company counts’ evidence of company growth, or ‘loan values’ evidence of investment unless the beneficiary, purpose and maturity are known.

The constitutional, legal and institutional framework

5.1 The Constitution: the private sector is part of the economic design

Articles 25 and 26 of the Constitution provide a clear foundation for this chapter: reforming the economy on modern foundations, investing resources, diversifying sources, encouraging and developing the private sector, and encouraging investment across sectors. Article 23 protects private property and regulates expropriation for public benefit with fair compensation, while Article 24 guarantees the free movement of Iraqi labour, goods and capital between governorates and regions. The Vision therefore treats the private sector not as an optional state appendage, but as a constitutional engine of the economy, operating within law, competition, labour rights and safeguards for public money. ¹

5.2 The Investment Law: existing guarantees before any new law

Investment Law No. 13 of 2006, as amended and published by the National Investment Commission, provides guarantees and facilitation measures and defines the licensing process. Article 20 requires the one-stop shop to coordinate with sectoral bodies; an agency must approve, reject or request amendment within 15 days, with silence deemed approval under the published text, while rejection must give reasons. This is a strong rule on paper. The first reform is therefore not another deadline, but measuring compliance with the existing one and publishing total processing time and reasons for exceptions. ³

The Commission's investment guide sets a 45-day ceiling for issuing a licence after submission, while the one-stop shop page confirms its role in receiving applications, obtaining approvals, allocating land and monitoring progress and delays. The mandate therefore exists. The 2045 gap is to turn it into a data-managed digital service where investors have a case number, decision owner, remaining time and written reasons for any stoppage. ⁴²¹

5.3 What is in force and what is still being legislated

A direct legal error must be avoided in public-private partnerships. Government bodies have partnership and investment instructions and practices, but the public-private partnership bill completed only its first reading in the Council of Representatives on 7 September 2026. The chapter therefore does not treat it as enacted law or base rights and obligations on it; it uses it as evidence that the broader legislative framework is still in the legislative process. ⁸

The Private Sector Development Strategy 2014–2030 has entered an official updating process supported by UNDP. An April 2025 workshop presented five revised pillars covering the business environment, impactful investment, institutional-framework governance, supportive macroeconomic policies, and monitoring and risk management. In December 2025, the Ministry of Planning was discussing the ‘draft updated strategy’. As of this chapter's data freeze, the research uses no official source proving adoption of a final updated version. The Vision therefore records the ongoing process without assuming an unpublished document. ⁷

Baseline: a private sector that exists but operates below capacity

6.1 Employment: the private sector is larger in numbers, not necessarily better in conditions

The latest available detailed national labour force survey remains the 2021 survey conducted by Iraqi statistical bodies in partnership with the International Labour Organization. According to the ILOsummary, 5.3 million people work in the private sector compared with 3.261 million in the public sector. This overturns the notion that ‘all Iraqis work for the state’, but does not establish that the private sector has become a generator of quality jobs: at the same baseline, fewer than 10% of private-sector workers had social security coverage. After the 2023 law, the baseline must be updated rather than repeating the old share as if it described 2026. ¹¹²⁴

6.2 The formal company: self-financing and regulatory friction

The Iraq Enterprise Survey 2022 excludes agriculture, informal establishments, firms with fewer than five workers and wholly state-owned enterprises. It therefore measures only the experience of formal non-agricultural establishments. Within that scope, 43.9% of firms have a bank account, only 2.3% have a loan or line of credit, and 90.2% of investment is internally financed versus 0.1% by banks. This is a stark baseline: a company seeking expansion relies more on retained earnings than on the financial system. ¹⁰

In the sample, obtaining an operating licence took an average of 20.3 days, an import licence 25 days and a construction permit 52.4 days. Access to finance was the largest obstacle for 24.8% of firms, corruption for 14.6%, licences and permits for 11.4%, and electricity for 9.3%. These are 2022 figures, not an assessment of the current government, but they provide a historical baseline to be remeasured using the same definitions after service digitalisation and reforms. ¹⁰

6.3 Credit: growth in volume does not equal investment financing

The Central Bank's 2024 Economic Report puts total cash credit at IQD 73.5 trillion, with IQD 43.9 trillion to the private sector. The Financial Stability Report breaks private credit down further: 68.39% to households and 31.29% to companies. If personal credit backed by salaries or used for consumption rises, the ‘private credit’ figure may improve without changing a factory's, farm's or technology company's ability to finance a long-term asset. The Vision therefore requires a corporate-credit dashboard: sector, size, maturity, purpose, collateral, price, defaults and investment financed. ¹²¹³

6.4 Foreign investment: an apparent contradiction requiring explanation

According to UNCTAD , inward FDI flows to Iraq were USD -7.458 billion in 2024, after USD -5.364 billion in 2023. This is a net balance-of-payments series, not a list of new projects. Actual projects and partnerships nevertheless exist; IFC announced approximately USD 1 billion in new investments and partnerships in 2025, covering manufacturing, agriculture, finance and infrastructure. The methodological decision is to publish a dual dashboard: balance-of-payments flows according to UNCTAD/the Central Bank, and a portfolio of implemented greenfield projects/expansions under a separate definition, without using one to negate the other. ¹⁵¹⁶

Productive rather than consumption-oriented investment: the outcome test

The state needs an economic project test, not a moral classification of traders and manufacturers. Trade, housing, retail and personal services have real functions, but subsidised land, exemptions, guarantees or public infrastructure allocated to a project must be tied to its claimed benefit. Productive investment here increases repeatable capacity: a machine, modern farm, warehouse, software, data centre, laboratory, tourist hotel, clinic, logistics, energy or a professional service that exports or raises other establishments' productivity.

The proposed test does not predetermine the preferred sector; it takes the project through seven questions: does it add a new asset? Does it have demonstrable demand? Does it generate domestic value? Are its jobs formal and capable of developing skills? Does it build local suppliers' capabilities? Is the financing real and risk-bearing? Does it depend on permanent support or monopoly protection? Are its environmental, water and fiscal costs accounted for? Every additional incentive must carry an additional measurable commitment.

Why does capital flow into rent-seeking and speculation?

Capital does not select an activity because it is ‘patriotic’ or ‘unpatriotic’; it selects return, risk and liquidity. If purchasing land, a short-term supply contract or import trading offers a faster cash cycle, while a factory needs electricity, long-term finance, approvals, skills, markets and enforceable contracts, money will rationally move to the shorter, less risky activity. Changing behaviour begins by changing risk-adjusted returns, not by blaming investors.

Several distortions coincide in Iraq: large public spending that fuels consumption demand, limited corporate bank financing, unstable electricity and services in some locations, administrative friction, informal competition and uneven rule enforcement. This creates a ‘discount on long-term investment’. Industrial and agricultural policies cannot succeed without reducing that discount through reliable infrastructure, finance, enforceable contracts and predictable government services. ¹⁰¹⁴

From an announced opportunity to a bankable project

The National Investment Commission's reoffering of strategic opportunities on 12 April 2026 because earlier bids failed to satisfy requirements reveals a practical gap: an announcement does not make a project bankable. Institutional investors need legally clear land, demand or a revenue model, preliminary studies, utilities, environmental constraints, an owning agency, a contracting mechanism, risk allocation and a decision timetable. Every missing item becomes a risk premium, delay or withdrawal. ⁶

The Commission's September 2026 direction to redraw the map towards industry, high-quality projects and agricultural, digital and climate developers accords with the Vision, provided the ‘map’ becomes a portfolio of projects at different maturity levels rather than a catalogue of land and ideas. ⁵

This ladder prevents inflated achievement. The Vision does not add a level-zero opportunity's value to an operating level-five asset. Each major project receives a single published identifier following it from map to licence, land, implementation and operation, making accumulated delays and points of project failure visible.

The investor journey: the one-stop shop as a service, not a label

The one-stop shop exists in law, with powers to obtain approvals, allocate land and monitor implementation. This chapter therefore proposes no ‘new window’, but re-engineers the journey: investors enter once with a data file, information is reused across bodies, requirements are visible before application, and every request has a running clock and decision owner. Physical attendance is limited to what law, safety or verification genuinely requires. ³⁴

A similar digital structure exists commercially through company registration on the Ur portal: one form, name reservation, registration with the Companies Registration Department, tax number, social security number, payment and tracking. Some special services still require originals to be delivered in person. The lesson is not to announce ‘complete digitalisation’, but to measure the share of genuinely digital steps, how often previously submitted documents are requested again, and completion time from the user's perspective. ⁹

Attracting major companies: an anchor investor, not an isolated investor

A major company creates development value when it establishes a chain around itself, not an isolated enclave importing inputs and skills and merely remitting profits. The ‘anchor investor’ may be a manufacturer, logistics operator, technology, tourism, agricultural or healthcare company. Its value lies in bringing standards, contracts, demand and stability that allow smaller companies to invest around it.

An attraction programme begins not with conferences, but with sectors/chains where Iraq has an advantage, demand or resources, followed by specific target companies, an Iraqi value proposition, an account manager, post-entry problem-solving and a supplier and skills plan. The KPI is not meeting or memorandum counts, but the share of targeted companies progressing to feasibility studies and implemented investment, asset value, formal jobs, competitive domestic procurement and research/skills.

The announcement by IFC of approximately USD 1 billion in new partnerships and investments in 2025 provides practical evidence of bankable projects when company, structure and sector are clear: building materials, trade finance, an agricultural infrastructure study and others. It does not estimate all ‘investment in Iraq’; it establishes only that institutional deals can be built in productive sectors. ¹⁶

Iraqi companies: from small-scale survival to expansion

The most dangerous deviation in private-sector policy is equating support for companies with helping small enterprises remain small forever. The economy needs a ladder allowing a small business to close, stabilise or expand, a medium-sized business to become large, and a large business to compete beyond Iraq. Public support must address a market failure or specific capability, not protect small size as an end in itself.

An Iraqi company seeking expansion needs four intangible assets: auditable accounts, management and processes, quality/safety standards, and financial data enabling banks and buyers to assess it. The expansion programme therefore combines business diagnostics, accounting and cash-flow management, digitalisation, accreditation, lean production, safety and governance, then connects them to real demand from an anchor investor, competitive procurement or a market. This is closer to productivity than a subsidised loan without diagnosis.

Local suppliers and linkages between foreign and domestic investment

Local content should not begin with a uniform mandatory percentage. If the state imposes a share beyond suppliers' capabilities, costs rise or the percentage becomes nominal assembly. The alternative is a ‘supplier capability matrix’: quality, cost and delivery QCD, safety, accreditation, finance and the ability to scale. Investors then identify where they can buy locally now, where suppliers need development, and where imports remain more efficient.

Vietnam's experience is useful because it reveals a risk even in an economy successful at attracting FDI: foreign companies accounted for 73% of exports, while domestic companies' participation in global value chains fell from 35% to 18% between 2009 and 2023. The World Bank recommends lower compliance costs, digitalisation, supply-chain finance and a supplier development programme. The lesson for Iraq is not Vietnam's export model, but the warning that success in attracting companies does not guarantee the domestic spread of knowledge and value. ¹⁹

Productive finance: shifting credit from consumption to companies with growth potential

The Central Bank's 2024 report shows that overall credit depth remains low relative to the economy's needs, prompting the National Bank Lending Strategy 2024–2029. The Vision adds a question: what kind of credit? Companies' 31.29% share of private-sector credit in 2024 means that growth in total lending may remain far removed from corporate investment capital. ¹²¹³

In 2025, the IMF links private-sector development to reforming state banks, strengthening private banks, credit, governance and digitalisation, with instruments such as a stronger credit bureau and deposit insurance. The Vision does not automatically propose a new development bank. Before a new institution, existing channels must be improved: credit information, movable collateral, cash-flow assessment, invoice and supply-chain finance, long-term finance for productive assets, and equity/quasi-equity for growth-capable companies. ¹⁴

14.1 A financing ladder instead of one loan for everyone

Government can bear some credit risk where a clear market failure exists, but a public guarantee must be partial, priced, capped and coupled with assessment by a bank retaining some risk. A full guarantee removes discipline and turns corporate default into public debt. Every guarantee programme's performance must be published: lending genuinely added, defaults, net losses, jobs/investment, and whether the bank would have financed the company without the guarantee.

Land and industrial and agricultural property: use rights in return for performance

In investment, land can shift from a production input to a speculative instrument. The remedy is not to stop allocating land, but to separate site value from development rights: published valuation, clear contract, deadlines, minimum expenditure/progress, restrictions on transferring rights before a specified stage, and repossession or reoffering upon breach, with grievance rights. Public land is not granted in exchange for an ‘intention to invest’.

For industrial, agricultural and tourism zones, real value lies in shared infrastructure: reliable electricity, suitable water/drainage, roads, fibre, laboratories/customs where needed, site management and safety. A project entering a ready zone bears less risk than one negotiating utilities with five agencies. Zones are therefore measured by productive occupancy, consumption/production, jobs and value, not dunums allocated.

Public-private partnerships: financing or a deferred fiscal commitment?

PPP is not a way to hide a project's cost from the budget. If a company builds an asset in return for government payments, a demand guarantee or price-difference compensation, the state still bears a current or contingent commitment. The PPP gateway is therefore fiscal before it is legal: does the project need PPPat all? Does it deliver value for money compared with public procurement? Who bears construction, demand, operation, currency and force-majeure risks? What contingent commitment arises under an adverse scenario?

The PPP bill was at first reading in September 2026, so this chapter does not assume it is in force. Until legislation is completed, the state can apply fiscal disclosure, competition and risk assessment through existing instructions and contracts, and make the Ministry of Finance a mandatory participant in assessing major projects' contingent liabilities. ⁸

The PFRAM tool developed by the IMF and World Bank illustrates the principle: assessing a partnership project's effects on cash flows, budgets, debt and risk across scenarios. Iraq need not copy the tool literally, but must maintain a unified register of partnership payments, guarantees, compensation and termination rights. ²⁰

Protecting serious investors, the state and the market

Protection is not a privilege; it is predictability. Serious investors need property and contract protection, lawful funds transfers, reasoned administrative decisions, known deadlines, grievance rights and no arbitrary alteration of terms for an implemented project. The Investment Law already includes guarantees, restrictions on confiscation/nationalisation outside legal frameworks, and rights concerning transfers of capital and profits under applicable rules. ³²¹

Protection is reciprocal, however. The state and society need to know the beneficial owner, funding source and tax, labour and environmental compliance, and to prevent conflicts of interest, monopoly, collusion and money laundering. The Ur portal includes a beneficial-ownership disclosure service when establishing a company or changing its ownership structure, based on the Anti-Money Laundering and Counter-Terrorism Financing Law. Such data should connect to major investment files without becoming unlawful disclosure of personal information. ²²

Private-sector jobs: numbers, quality and formality

A job-generating private sector does not mean shifting unemployment's burden from the state budget to precarious jobs. The goal is a job creating value, paying wages commensurate with productivity, complying with safety and social security rules and offering a skills pathway. Workers' Retirement and Social Security Law No. 18 of 2023 expands the legal basis for coverage, but an ILO report in 2025 on perceptions of implementation in Baghdad and Basra still identifies awareness, registration and procedural-complexity gaps. Formalisation is therefore a service and enforcement programme together, not merely a penalties campaign. ²⁴

Nor should an investor's KPI be ‘jobs pledged’ at contract signing. A job counts only through payroll/social security records or proof of employment. Permanent and temporary, full- and part-time, and Iraqi and foreign workers are distinguished without turning ratios into unlawful discrimination. Capital-intensive projects may be highly productive with fewer but skilled jobs. Impact is therefore measured through a combination of jobs, wages, skills and value, not numbers alone.

Digitalisation and registration: from the portal to actual time

The Ur portal already provides company registration through a one-stop system: name reservation, registration, tax number, social security number, one form, electronic payment and tracking. This is important infrastructure, but does not automatically mean incorporation is ‘instant’ or that all documents and bodies operate without attendance. Even the VIP fast service explains that some originals must be delivered and certified documents collected in person. The correct measure is the user journey, not the number of published services. ⁹

Vision 2045 adopts the Once-Only principle: if the state holds verified information, it does not request it from the company again without a legal reason or an update. A single company identifier links registration, tax, social security, licences, beneficial ownership and tenders—with permissions and privacy—to make oversight less intrusive and more accurate. This also allows ‘transition to formality’ to be measured through service use, not paper registration alone.

International comparisons: transferring the mechanism, not the country

20.1 Morocco: incentives tied to impact, not investor nationality

The OECD Investment Policy Review of Morocco 2024 describes the 2022 Investment Charter as a framework linking investment support to objectives such as stable jobs, regional development, priority sectors and sustainability, alongside simplification, digitalisation and investment-governance reforms. The transferable lesson for Iraq is neither Morocco's support percentages nor its numerical targets, but ‘incentives for defined impact’ and unified governance with regional services. ¹⁸

20.2 Vietnam: FDI without domestic linkages may build a dual economy

Vietnam 2045 warns that investment attraction and exports can succeed while domestic companies remain outside the chain. Programme recommendations include reducing compliance costs, digitalisation, supply-chain finance and supplier development. Iraq needs this mechanism early, rather than waiting for an ‘advanced foreign company–weak domestic supplier’ divide and addressing it later. ¹⁹

20.3 OECD: investment quality has at least four dimensions

The OECD tool for FDI quality shifts discussion from investment quantity to its effects on productivity and innovation, job quality and skills, equality and decarbonisation. The Vision does not adopt every OECD indicator literally, but uses the idea: every major investment benefiting from public support needs a before/after impact scorecard, not a capital figure alone. ¹⁷

Investment and the private sector in Iraq in 2045

In 2045, Iraq is an economy where an entrepreneur can move from idea to company, finance, location and operation through a predictable digital and legal journey, and expand without relations with the state being the principal asset governing growth. The private market does not become a ‘replacement for the state’. The state remains responsible for law, infrastructure, competition, data, justice and stability, but stops crowding companies out of every activity or guaranteeing their profits.

The foreign investor in this model is not measured by capital size alone. A good company reinvests, buys from qualified suppliers, trains, transfers standards or management and competes without monopoly. Iraqi companies are not treated merely as state contractors; they can obtain finance, enter a chain, sell beyond their governorate and Iraq, and attract partners or capital without sacrificing governance.

The financial system, in turn, becomes able to price corporate risk, not merely an employee's salary. Public land changes from a reward into a production input subject to milestones, and PPP changes from a financing slogan into a performance contract with known fiscal commitments. This is what ‘the private sector as a job generator’ means in Vision 2045: a sector accumulating capital, productivity and skills, not merely more shops and contractors.

Stages of transformation, 2027–2045

Phase figures are not filled with hypothetical ladders. Where a legal limit exists, such as 45 days for licensing and 15 days for an agency response, it serves as the compliance standard. Private-investment share, formal coverage and corporate credit require an updated 2027–2030 baseline, after which quantitative targets are adopted based on it and on financial-system and market capacity.

Indicator and Target Dashboard

23.1 Indicators not used alone

The Vision does not use licence counts, announced opportunity values, registered-company counts, net FDI values or private-credit volume alone as success indicators. Each needs a ‘twin indicator’: licences with operation, companies with survival/growth, FDI with assets and linkages, credit with companies and purpose, and incentives with outcomes.

Implementation programme package

24.1 Programme One: the productive-investment gateway and bankable opportunity portfolio

The National Investment Commission, coordinating with governorates and ministries, leads the conversion of the investment map into a pipeline with maturity levels 0–5. Projects are not announced as investment-ready until reaching a defined level, and core information and constraints are published. The programme builds on the 2026 direction to redraw the map and creates no competing platform if the Commission's infrastructure can be developed. ⁵

24.2 Programme Two: Investor Journey SLA

Unify licensing, land, utilities, construction and operation into one register, with a project identifier, deadline, decision owner, reason for stoppage and P50/P95indicators. It starts from existing legal provisions rather than waiting for a new law. An aggregate dashboard protects commercial confidentiality while revealing institutional performance.

24.3 Programme Three: the anchor investor and post-entry support

Promotion/service units within the existing Commission target specific companies in priority chains and manage aftercare for expansion, suppliers and skills. Incentives are tied not merely to project size, but to outcomes, with part of the support recoverable upon non-achievement under the contract and law.

24.4 Programme Four: Iraqi supplier development — Scale-Up & Supplier

A competitive programme for companies with growth potential links management diagnostics, quality, digitalisation, safety and finance to real buyer demand. It does not distribute loans en masse; companies enter with a gap programme and exit with a standard, contract or proven capability.

24.5 Programme Five: financing the productive company

The Central Bank and banking sector build a corporate-credit dashboard and accelerate credit-information, collateral and cash-flow-, invoice- and supply-chain-based finance reforms. Any public guarantee is partial, capped and priced, with banks retaining some risk. No new financing institution is established unless a gap assessment proves it superior to reforming existing channels.

24.6 Programme Six: the partnership fiscal-risk gateway — PPP Fiscal Gate

The Ministries of Finance and Planning require a standardised value-for-money and contingent-liability assessment before approving any major PPP project. Every demand, price or currency guarantee and termination compensation enters a risk register, with sensitivity analysis before signing.

24.7 Programme Seven: investment land tied to performance

Digitalise the allocated-land portfolio, show legal status, utilities and milestones, and tie continued use rights to financial close, commencement and operation. Reviews of delayed projects distinguish investor failure from state failure to deliver land/utilities/approvals before imposing sanctions.

24.8 Programme Eight: formal, skilled private-sector work

Connect company and worker registration, social security and services through a digital system, simplify compliance, then apply graduated enforcement. Investment incentives are tied to actual registered employment and a skills plan where jobs form part of the support rationale. Data from the new social security law establish a baseline for use after 2027.

Implementation, Cost and Financing Matrix

The chapter gives no total figure for the cost of ‘private-sector development’. Most desired investment must be financed by private capital itself; otherwise the burden moves to the state and the economic model remains unchanged. Public money finances public goods or the removal of specific market failures: data, infrastructure, regulation, shared training, partial guarantees or project preparation. Every contribution must be evaluable after implementation.

25.1 The additionality rule

Before any incentive, the agency asks: would the same investment occur at the same scale, location and time without support? If so, support is a financial transfer with no additional impact. If the incentive shifts the location to a weaker governorate, adds training or accelerates an investment with public benefits, additionality is measured and the incentive priced at the minimum necessary, not the maximum the investor requests.

Risks and safeguards

26.1 Project red flags

• A request for a comprehensive government guarantee without financial close or a genuine equity contribution.
• A large land allocation with an unfunded expenditure schedule or a company with no execution record.
• A tax incentive that cannot be linked to a measurable job, asset or impact.
• A PPP contract containing demand/currency/price guarantees without inclusion in fiscal risks.
• A project claiming ‘technology transfer’ without a training/licensing/supplier/research plan or indicator.
• Investment relying on permanent import protection to remain profitable.
• Announced project value inconsistent with finance, disbursement schedule or implementation contract.

Conclusion and the bridge to non-oil exports

The private sector in Iraq in 2045 is built neither by a decision to ‘leave the economy to the market’ nor by the opposite decision to restore the state as producer, financier and guarantor of everything. It rests on a clear division: the state protects rules, competition, rights, infrastructure, data and stability, and purchases a specific public benefit where a market failure exists; the investor bears project risk, profits from success and exits or restructures upon failure within the law.

When opportunities become bankable, companies can expand, credit reaches productive assets, major investors connect to suppliers, land is tied to performance and private jobs are formal and skill-building, the question shifts from ‘How do we attract capital?’ to ‘How do we make what this capital produces competitive beyond the domestic market?’ This is where the next chapter, V2-D04-C06 — Non-Oil Exports — begins: export capability, competitive products, connecting industry to markets and reducing economic vulnerability to oil.

Principal references and sources

1. Iraqi Constitution, Iraqi Council of Representatives — Articles 23–26 and other relevant provisions — Source
2. Ministry of Planning — Summary of the National Development Plan 2024–2028 — Source
3. National Investment Commission — Investment Law No. 13 of 2006, as amended (published text) — Source
4. National Investment Commission — One-Stop Shop and Investor Services Department — Source
5. National Investment Commission — redrawing the country's investment map, 17 September 2026 — Source
6. National Investment Commission — reoffering strategic investment opportunities, 12 April 2026 — Source
7. Ministry of Planning — updating the Private Sector Development Strategy 2014–2030, 2025 — Source
8. Iraqi Council of Representatives — session of 7 September 2026: first reading of the PPP — Source
9. Ur portal — online application for company registration through the one-stop system — Source
10. World Bank Enterprise Surveys — Iraq 2022 Country Profile — Source
11. International Labour Organization — Iraq Labour Force Survey 2021 — Source
12. Central Bank of Iraq — Annual Economic Report 2024 — Source
13. Central Bank of Iraq — Financial Stability Report 2024 — Source
14. International Monetary Fund — Iraq 2025 Article IV Consultation — Source
15. UNCTAD — World Investment Report 2025, Iraq Country Fact Sheet — Source
16. IFC — 20 Years in Iraq and $1bn in new investments, September 2025 — Source
17. OECD — FDI Qualities Policy Toolkit, 2022 — Source
18. OECD — Investment Policy Review: Morocco 2024 — Source
19. World Bank — Viet Nam 2045: Trading Up in a Changing World — Source
20. IMF/World Bank — Public-Private Partnerships Fiscal Risk Assessment Model (PFRAM) — Source
21. National Investment Commission — Investor Guide — Source
22. Ur portal — beneficial-ownership disclosure when establishing/amending a company — Source
23. National Investment Commission — 100-day action plan and activation of the one-stop shop, 28 August 2026 — Source
24. Ministry of Justice — Workers' Retirement and Social Security Law No. 18 of 2023 — Source

29.1 Methodological note on the data

Research was frozen on 5 October 2026. Relatively old figures, such as the 2021 Labour Force Survey and 2022 Enterprise Survey, were used as historical baselines because they were the latest detailed national/comparative surveys verifiable within their scope, not as complete descriptions of 2026. The Central Bank's 2024 financing data are more recent but do not by themselves reveal each loan's ultimate purpose. The FDI flow from UNCTAD was treated under its balance-of-payments definition and not combined with project or licence values. The PPP bill was recorded as a legislative constraint, not enacted law.

29.2 Confidence and use register

End of chapter