September 2013 saw some of the worst violence in Iraq since the civil unrest of 2007 and 2008. Two years after international forces withdrew from the country, Iraq has struggled to stand on its own two feet.
U.S.-Iraq relations have clearly moved to another level, past direct military engagement, but is there still more the U.S. can do to help Iraq stabilize? Iraqi Ambassador to the U.S. Lukman Faily believes so, expressing in an interview with the Diplomatic Courier that investment opportunities in Iraq present a great opportunity not only to American businesses, but also to the Iraqi people.
Ambassador Faily presented his credentials to U.S President Obama in July 2013, making him one of the newer ambassadors in Washington, DC, but hardly an inexperienced one. Ambassador Faily previously served as Iraq’s Ambassador to Japan; before that, he served as an Ambassador at the Iraqi Ministry of Foreign Affairs.
***
[Diplomatic Courier:] Within the past year, it was revealed that China has become the largest importer of Iraqi oil since Operation Iraqi Freedom. Some Americans were disturbed by this information. Besides oil exports, what other Iraqi industries or resources could provide valuable opportunities for American businesses?
[Ambassador Lukman Faily:] Iraq continues to play a critical role in stabilizing global oil prices by providing a significant and steady supply of oil to the world market, which is in the interests of the United States and others. Moreover, Iraq is influenced by supply and demand. As an open market economy and a mature oil producing country, we also sell oil to East Asian countries; not only China.
Although oil represents the majority of Iraqi exports to the United States, there is much potential for Iraq to broaden its exports by utilizing its natural resources in minerals, ores, natural gas and agriculture. Iraq recently launched its National Development Plan, which outlines a vision to invest $357 billion over the next five years in a number of key strategic sectors, namely, energy; building and services; agriculture; education; transportation; and communication. The government seeks $75 billion in investment from the private sector, and Iraq expects American businesses to play a key role in this investment.
[DC:] Many oil-rich Middle Eastern countries are heavily investing in sustainable energy projects and development. What clean energy plans or initiatives does the Iraqi government have?
[LF:] The Iraqi government has launched a national strategy for the protection of the environment. An executive 4-year plan is in place to address the problems and challenges facing the country.
The oil and gas industry is a critical sector that has major implications on the environment. The government imposes strict health, safety and environmental (HSE) requirements on oil companies operating in the country as part of their contractual obligations. Environmental impact studies are a prerequisite before commencing any drilling activities and contingency plans are also in place to mitigate the risks of oil spills and other accidents. However, greater efforts are needed to expand Iraq’s use of clean energy, and to this aim, the Ministry of Environment is working closely with the scientific community on an advocacy program to increase awareness and promote the use of clean energy for power generation, with an initial focus on scientific laboratories across the country.
[DC:] Corruption is becoming a significant problem for the Iraqi government and international businesses. What measures is the central government taking to mitigate it?
[LF:] The Iraqi government is working diligently to address corruption, and we understand the concerns of U.S. companies, however, we know it is a problem that cannot be fixed overnight and we have a long road ahead. Corruption is a decades-long problem and something that was deeply rooted in Saddam Hussein’s regime. Our efforts have been slow but steady, and we are working to strengthen the capacity of anti-corruption mechanisms by introducing strict legal and technical frameworks to combat the causes of corruption.
One such example is Iraq’s recent success in implementing the Extractive Industries Transparency Initiative (EITI), an international standard for disclosing revenues from natural resources. After a lengthy process that included consultations between the government, civil society and international organizations, Iraq successfully introduced transparent reporting mechanisms that allow citizens to see how much revenue the country receives from oil and gas. Iraq was proud to become only one of two EITI-compliant countries in the Middle East.
[DC:] With the lifting of Chapter 7 sanctions in June 2013, $82 billion in frozen assets were released and Iraq once again has control of its oil revenues and policy. Specifically, where will this help Iraq’s economic development?
[LF:] For the first time in over two decades, Iraq participated in the United Nations General Assembly this year as a fully-fledged member of the international community, following its removal from Chapter 7 of the UN Charter. The lifting of sanctions gives Iraq and international companies the ability to do direct business, specifically in the areas where the sanctions had the most impact. For example, in an effort to rehabilitate its national carrier, Iraq recently purchased 30 Boeing planes.
There is a pressing need to rehabilitate Iraq’s infrastructure, notably in the field of water treatment and distribution; and to build new roads, ports, and rail networks. The government has also announced a national housing program that seeks to build one million new housing units.
Having direct control over revenues from its vast oil and gas reserves, which amounted to $94 billion last year, will encourage creditors to go the extra mile in funding large and strategic investment projects.
[DC:] Further,the lifting of Chapter 7 sanctions removes limitations on advanced weapons purchases. Can increased control of revenue and weapon purchases increase stability in the country in the near-term?
[LF:] The government is stepping up its fight against Al-Qaeda and other extremist organizations that seek to impede Iraq’s political and economic development. The Iraqi people have proven patient, resilient, and determined to stand up in the face of terrorism. The purchase of military equipment will increase our capability to challenge this threat and create a secure environment to build a more stable and prosperous country.
[DC:] The situation in Syria does not seem to be improving. How is the ongoing situation in Syria affecting Iraq? What are your thoughts on U.S. President Barack Obama’s decision to ship arms to “selective” Syrian rebels?
[LF:] We believe that there can be no military solution to the conflict in Syria; therefore, we oppose the arming of any of the warring parties. From the outset of the conflict, we stated that only a negotiated settlement could offer any hope of peace. Iraq sees the conflict in Syria as extremely dangerous, posing a threat not just to us, but to the entire region. Moreover, Iraq fears that arms shipments may end up in the hands of the wrong people. Our policy is to remain impartial. When protests first began and were still peaceful, Iraq encouraged the government of Syria to meet their demands by undertaking reforms and to refrain from using force. At the same time, Iraq called on other countries not to interfere in the internal dispute in Syria or to support one side over another, knowing full well that this would only escalate the conflict.
As the conflict developed, we warned that if extremist groups triumph in Syria it will only serve to destabilize the region further and this has the potential to spark sectarian violence in Iraq, Lebanon, and elsewhere in the region. The increased support for terrorist networks across the Iraqi-Syrian border and the spike in attacks inside Iraq this year are manifestations of this reading.
[DC:] Reports indicate that nearly a third of Syria’s 21 million people are now displaced or a refugee. Many Syrian refugees have fled to Iraq. The UN envoy to Iraq recently reported that the Syrian and Iraqi battlefields are merging. Are there concerns that Syrian Sunnis will join in sectarian violence in Iraq?
[LF:] Our main concern with Syria today is the increase in civilian casualties and the rising threat of Al-Qaeda. As bad as Syria has been under the Baathist rule of Assad, and as bad as the situation is today, we can imagine it becoming even worse if opposition forces loyal to al-Qaeda and other extremist groups come to power. Extremist elements are trying to take advantage of the turmoil in Syria and exacerbate sectarian polarization in the region.
[DC:] What steps is the Iraqi central government taking to address the increasing violence in the country, as well as to prevent any increase of violence from Syria?
[LF:] When it comes to Syria, we have been working with the Arab League, the UN, the United States, and other countries to encourage the warring parties to come to the negotiating table. We strongly support the efforts of the UN special envoy, Lakhdhar Ibrahimi and we are hopeful that a Geneva II conference produces an outcome that stops the bloodshed in Syria.
The implications of the Syrian conflict on Iraq are dire. We are suffering from deadly attacks carried out by cross-border insurgents who are trying to destabilize our country. The government has stepped up its efforts and is working closely with other countries in the region as well as the United States to prevent the spillover of the conflict to Iraq. We are also working, particularly with the United States, to enhance the capabilities of our armed forces and secure our borders. Moreover, Iraqi political leaders of all religious and ethnic backgrounds continue to call on the people of Iraq to stand together in the face of terrorism.
[DC:] How is Iraq’s relationship with Iran in the wake of international forces leaving Iraq? Do you see any change in this relationship under Iranian President Rouhani?
[LF:] Iraq and Iran share a long border and have longstanding cultural and religious ties, which have been key factors in shaping relations between the two nations, both before and after the withdrawal of the coalition forces from Iraq. Our relationship is based on the mutual respect of two sovereign nations.
As for President Rouhani, we see his election as a fresh opportunity for other countries to engage with Iran and we welcome the recent exchanges between President Obama and President Rouhani, as well as Iran’s positive messages during the United Nations General Assembly and its willingness in finding common ground with the international community regarding its nuclear program.
[DC:] What do you see for Iraq’s future?
[LF:] Iraq is a country with unlimited potential, and our economic development is a testament to this. Last year’s GDP growth exceeded China’s, and we expect to see sustained growth over the next decade. The country is moving towards a market economy and offers unrealized opportunities to businesses, entrepreneurs and investors that cannot be found anywhere else in the region.
We are continuously strengthening our democracy. While we recognize that we have a load road ahead, our political stakeholders share a common vision for national reconciliation to support this democratic effort in our country.
This article was originally published in the Diplomatic Courier's November/December 2013 print edition.
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Interview: Lukman Faily, Iraqi Ambassador to the United States
November 19, 2013
September 2013 saw some of the worst violence in Iraq since the civil unrest of 2007 and 2008. Two years after international forces withdrew from the country, Iraq has struggled to stand on its own two feet.
U.S.-Iraq relations have clearly moved to another level, past direct military engagement, but is there still more the U.S. can do to help Iraq stabilize? Iraqi Ambassador to the U.S. Lukman Faily believes so, expressing in an interview with the Diplomatic Courier that investment opportunities in Iraq present a great opportunity not only to American businesses, but also to the Iraqi people.
Ambassador Faily presented his credentials to U.S President Obama in July 2013, making him one of the newer ambassadors in Washington, DC, but hardly an inexperienced one. Ambassador Faily previously served as Iraq’s Ambassador to Japan; before that, he served as an Ambassador at the Iraqi Ministry of Foreign Affairs.
***
[Diplomatic Courier:] Within the past year, it was revealed that China has become the largest importer of Iraqi oil since Operation Iraqi Freedom. Some Americans were disturbed by this information. Besides oil exports, what other Iraqi industries or resources could provide valuable opportunities for American businesses?
[Ambassador Lukman Faily:] Iraq continues to play a critical role in stabilizing global oil prices by providing a significant and steady supply of oil to the world market, which is in the interests of the United States and others. Moreover, Iraq is influenced by supply and demand. As an open market economy and a mature oil producing country, we also sell oil to East Asian countries; not only China.
Although oil represents the majority of Iraqi exports to the United States, there is much potential for Iraq to broaden its exports by utilizing its natural resources in minerals, ores, natural gas and agriculture. Iraq recently launched its National Development Plan, which outlines a vision to invest $357 billion over the next five years in a number of key strategic sectors, namely, energy; building and services; agriculture; education; transportation; and communication. The government seeks $75 billion in investment from the private sector, and Iraq expects American businesses to play a key role in this investment.
[DC:] Many oil-rich Middle Eastern countries are heavily investing in sustainable energy projects and development. What clean energy plans or initiatives does the Iraqi government have?
[LF:] The Iraqi government has launched a national strategy for the protection of the environment. An executive 4-year plan is in place to address the problems and challenges facing the country.
The oil and gas industry is a critical sector that has major implications on the environment. The government imposes strict health, safety and environmental (HSE) requirements on oil companies operating in the country as part of their contractual obligations. Environmental impact studies are a prerequisite before commencing any drilling activities and contingency plans are also in place to mitigate the risks of oil spills and other accidents. However, greater efforts are needed to expand Iraq’s use of clean energy, and to this aim, the Ministry of Environment is working closely with the scientific community on an advocacy program to increase awareness and promote the use of clean energy for power generation, with an initial focus on scientific laboratories across the country.
[DC:] Corruption is becoming a significant problem for the Iraqi government and international businesses. What measures is the central government taking to mitigate it?
[LF:] The Iraqi government is working diligently to address corruption, and we understand the concerns of U.S. companies, however, we know it is a problem that cannot be fixed overnight and we have a long road ahead. Corruption is a decades-long problem and something that was deeply rooted in Saddam Hussein’s regime. Our efforts have been slow but steady, and we are working to strengthen the capacity of anti-corruption mechanisms by introducing strict legal and technical frameworks to combat the causes of corruption.
One such example is Iraq’s recent success in implementing the Extractive Industries Transparency Initiative (EITI), an international standard for disclosing revenues from natural resources. After a lengthy process that included consultations between the government, civil society and international organizations, Iraq successfully introduced transparent reporting mechanisms that allow citizens to see how much revenue the country receives from oil and gas. Iraq was proud to become only one of two EITI-compliant countries in the Middle East.
[DC:] With the lifting of Chapter 7 sanctions in June 2013, $82 billion in frozen assets were released and Iraq once again has control of its oil revenues and policy. Specifically, where will this help Iraq’s economic development?
[LF:] For the first time in over two decades, Iraq participated in the United Nations General Assembly this year as a fully-fledged member of the international community, following its removal from Chapter 7 of the UN Charter. The lifting of sanctions gives Iraq and international companies the ability to do direct business, specifically in the areas where the sanctions had the most impact. For example, in an effort to rehabilitate its national carrier, Iraq recently purchased 30 Boeing planes.
There is a pressing need to rehabilitate Iraq’s infrastructure, notably in the field of water treatment and distribution; and to build new roads, ports, and rail networks. The government has also announced a national housing program that seeks to build one million new housing units.
Having direct control over revenues from its vast oil and gas reserves, which amounted to $94 billion last year, will encourage creditors to go the extra mile in funding large and strategic investment projects.
[DC:] Further,the lifting of Chapter 7 sanctions removes limitations on advanced weapons purchases. Can increased control of revenue and weapon purchases increase stability in the country in the near-term?
[LF:] The government is stepping up its fight against Al-Qaeda and other extremist organizations that seek to impede Iraq’s political and economic development. The Iraqi people have proven patient, resilient, and determined to stand up in the face of terrorism. The purchase of military equipment will increase our capability to challenge this threat and create a secure environment to build a more stable and prosperous country.
[DC:] The situation in Syria does not seem to be improving. How is the ongoing situation in Syria affecting Iraq? What are your thoughts on U.S. President Barack Obama’s decision to ship arms to “selective” Syrian rebels?
[LF:] We believe that there can be no military solution to the conflict in Syria; therefore, we oppose the arming of any of the warring parties. From the outset of the conflict, we stated that only a negotiated settlement could offer any hope of peace. Iraq sees the conflict in Syria as extremely dangerous, posing a threat not just to us, but to the entire region. Moreover, Iraq fears that arms shipments may end up in the hands of the wrong people. Our policy is to remain impartial. When protests first began and were still peaceful, Iraq encouraged the government of Syria to meet their demands by undertaking reforms and to refrain from using force. At the same time, Iraq called on other countries not to interfere in the internal dispute in Syria or to support one side over another, knowing full well that this would only escalate the conflict.
As the conflict developed, we warned that if extremist groups triumph in Syria it will only serve to destabilize the region further and this has the potential to spark sectarian violence in Iraq, Lebanon, and elsewhere in the region. The increased support for terrorist networks across the Iraqi-Syrian border and the spike in attacks inside Iraq this year are manifestations of this reading.
[DC:] Reports indicate that nearly a third of Syria’s 21 million people are now displaced or a refugee. Many Syrian refugees have fled to Iraq. The UN envoy to Iraq recently reported that the Syrian and Iraqi battlefields are merging. Are there concerns that Syrian Sunnis will join in sectarian violence in Iraq?
[LF:] Our main concern with Syria today is the increase in civilian casualties and the rising threat of Al-Qaeda. As bad as Syria has been under the Baathist rule of Assad, and as bad as the situation is today, we can imagine it becoming even worse if opposition forces loyal to al-Qaeda and other extremist groups come to power. Extremist elements are trying to take advantage of the turmoil in Syria and exacerbate sectarian polarization in the region.
[DC:] What steps is the Iraqi central government taking to address the increasing violence in the country, as well as to prevent any increase of violence from Syria?
[LF:] When it comes to Syria, we have been working with the Arab League, the UN, the United States, and other countries to encourage the warring parties to come to the negotiating table. We strongly support the efforts of the UN special envoy, Lakhdhar Ibrahimi and we are hopeful that a Geneva II conference produces an outcome that stops the bloodshed in Syria.
The implications of the Syrian conflict on Iraq are dire. We are suffering from deadly attacks carried out by cross-border insurgents who are trying to destabilize our country. The government has stepped up its efforts and is working closely with other countries in the region as well as the United States to prevent the spillover of the conflict to Iraq. We are also working, particularly with the United States, to enhance the capabilities of our armed forces and secure our borders. Moreover, Iraqi political leaders of all religious and ethnic backgrounds continue to call on the people of Iraq to stand together in the face of terrorism.
[DC:] How is Iraq’s relationship with Iran in the wake of international forces leaving Iraq? Do you see any change in this relationship under Iranian President Rouhani?
[LF:] Iraq and Iran share a long border and have longstanding cultural and religious ties, which have been key factors in shaping relations between the two nations, both before and after the withdrawal of the coalition forces from Iraq. Our relationship is based on the mutual respect of two sovereign nations.
As for President Rouhani, we see his election as a fresh opportunity for other countries to engage with Iran and we welcome the recent exchanges between President Obama and President Rouhani, as well as Iran’s positive messages during the United Nations General Assembly and its willingness in finding common ground with the international community regarding its nuclear program.
[DC:] What do you see for Iraq’s future?
[LF:] Iraq is a country with unlimited potential, and our economic development is a testament to this. Last year’s GDP growth exceeded China’s, and we expect to see sustained growth over the next decade. The country is moving towards a market economy and offers unrealized opportunities to businesses, entrepreneurs and investors that cannot be found anywhere else in the region.
We are continuously strengthening our democracy. While we recognize that we have a load road ahead, our political stakeholders share a common vision for national reconciliation to support this democratic effort in our country.
This article was originally published in the Diplomatic Courier's November/December 2013 print edition.
