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Country Risk Report - Iraq
Maplecroft’s Country Risk Report on Iraq provides in-depth analysis of the key risks facing oil companies operating within the Iraqi Kurdistan region. The report provides vital insights into the political risk environment, including emerging security and governance risks; the economy; legal and regulatory developments; the human rights situation and environmental operating concerns.
Although investor conditions in Iraqi Kurdistan are considerably stronger when compared to the rest of Iraq, corruption, the ad-hoc nature of business and influence of political interests remain key problems. Responding to a limited ‘trickle-down’ of oil wealth, public discontent with the established PUK-KDP administration has grown, accounting for the rise of the Goran (Change) Party.
The report expects Iraqi Kurdistan to continue to face significant short-term political uncertainty. Despite its imminent expiration, the 2007 strategic agreement between the region’s two main parties – the Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP) – has yet to be renewed. Accusations from within the ranks of the PUK that the KDP is acting in a unilateral manner have resulted in calls for the abandonment of the ‘joint ticket’ system, whereby both parties present a single political block in elections.
The region continues to be heavily affected by ongoing instability in southern Iraq. Although the Kurdish governorates did not vote in the April 2013 elections, the alarming drop in turnout and weakening position of Prime Minister Nouri al-Maliki could see tensions between Baghdad and Erbil rise. Al-Maliki will continue to strongly oppose Erbil’s independent oil policy in order to shore up his domestic position, as the crucial 2014 parliamentary elections approach.
According to the report, developments in Iraqi Kurdistan’s powerful northern neighbour, Turkey, will remain a key dynamic. Turkey has positioned itself as the principal transit route for Kurdish oil to international markets, and this should provide Erbil with much-needed finance – finance that is independent of Baghdad. If successful, the ongoing peace process between Ankara and the Kurdistan Workers’ Party (PKK) is likely to enhance Turkey’s regional clout. Ankara is committed to bolstering its influence over Erbil.
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Jason McGeown, Head of Communications
Tel: +44 (0)1225 420000
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