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Corruption, lack of transparency scare German investors from Kurdistan

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Corruption and a lack of transparency are the main obstacles preventing German companies from investing in Iraq and the Kurdistan region, according to the head of the German Liaison Office for Industry and Commerce in Iraq (DWI).
“Corruption is one of the issues that German companies unfortunately have to deal with in Iraq and the Kurdistan region,” Nasrin Khalil told Rudaw on Wednesday.
“However, the main obstacle in front of German companies is the lack of transparency.”
According to Transparency International, Iraq is among the world’s most corrupt nations.
The lack of transparency is made worse by the region’s muddled regulatory environment.
“The process is not always clear for us, and there is no source that we can read to explain what we should do exactly to go through the process of deals with businesses in Iraq and Kurdistan region,” Khalil said.
Member of the Iraqi Kurdistan parliament’s finance committee Sherko Jawdat Mustafa said on Wednesday that the Ministry of Natural Resources has not shared any of the Kurdistan region’s oil contracts with the committee. And said that he does not know anything about the details of the oil contracts that have been signed over the last thirteen years.
Khalil says German firms find it far easier to invest in the Kurdistan region than in federal Iraq as investors can get visas on arrival, register businesses easily, and import and export goods more straightforwardly.
There are 3,252 foreign companies registered in the Kurdistan region, according to the Department for Company Registration. Some 2,371 of these are registered in Erbil.
At least 700 German companies operate in the Kurdistan region and Iraq, according to the records of the German chamber of commerce in Erbil. However, just a fraction of these actually operate offices inside Iraq itself.
German firms mostly invest in automotive parts, food and beverages, chemicals, and machinery.
Germany has provided the Kurdish Peshmerga militias with weapons and training over the cause of its war with ISIS, but the German arms appeared for sale at local market in 2016.
Germany has also been one of the largest donors of humanitarian aid, helping the Iraqi Kurdistan to support millions of Iraqis and Syrians displaced by the war.
Kurdistan considered as the most corrupted part of Iraq. According to Kurdish lawmakers and leaked documents billions of dollars are missing from Iraqi Kurdistan’s oil revenues.
According to observers such illegal oil activities and practices occurred with the full knowledge of the ruling Barzani family.
Masrour Barzani is the prime minister of Kurdistan regional Government KRG – his cousin, Nechirvan is president, and the former president Massoud Barzani remains the driving power behind the throne.
The Barzanis have been routinely accused by critics of amassing huge wealth from oil business for the family instead of serving the population. The Barzani clan control a large number of commercial enterprises and involved in oil business in Iraqi Kurdistan, with a gross value of several billion US dollars, according to observers.
Masrour Barzani has “pledged” to tackle corruption and clean up the region’s business environment in the hope of attracting more foreign investment.
On Thursday more than 25 German companies exhibited their products via catalogue sales to the people of Iraqi Kurdistan, aiming at growing their investment in the Kurdish region.
The event, held in Erbil, was attended by many Kurdish officials and German envoys, with around 400 local businessmen invited to the exhibition from across the Kurdistan region and Iraq.