Business Agenda of the Holy Najaf

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Business Agenda of the Holy Najaf

This Agenda was Prepared by Business Associations in the

Holy Najaf Province

in cooperation with

The Center for International Private Enterprises (CIPE)

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Table of Contents

Contents Page Message by the Center for International Private Enterprises (CIPE) 4 Message by Business Associations in the Holy Najaf Province 6 List of Business Associations and Economic Organizations Participating in

Setting the Business Agenda of the Holy Najaf Province 7

List of Names of Coordinators of Committees of the Business Agenda of

the Holy Najaf Province 8

List of Names of the Consultative Team to Revise the Business Agenda of

the Holy Najaf Province 8

Introduction 9 Some Indicators (Indices) of the Holy Najaf Province 10 The Private Agricultural Sector 17 The Private Industrial Sector 31 The Private Tourism Sector 43 The Private Commercial Sector 59 The Private Construction Sector 69

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Message by the Center for International Private Enterprise

Esteemed Governors, Provincial Council and Provincial Investment Commission members,

A provincial business agenda (PBA) is a vital tool for the local business community to encourage investment by

stimulating business activity and economic growth. Private sector organizations in many countries of the world, including Egypt, Iraq,

Montenegro, Romania, Russia, and the United States, develop agendas that help identify the legislative and economic reforms

necessary to advance their countries’ economies. With such agendas, organizations have succeeded in prioritizing economic and

legislative issues that have led to democratic, market-oriented economic reform.

In developing a PBA, private sector organizations mobilize the business stakeholders that they represent to influence

policy reform by setting legislative and regulatory priorities and clearly communicating them to policymakers. Often, through clear

communication, the private sector can attract public and government attention to the obstacles that obstruct development and growth

of the overall business climate. The private sector can also offer concrete recommendations and solutions to improving the business

operating environment. A provincial business agenda educates members of the private sector on public policies that affect them and

their business interests. The process allows private sector representatives to present the concerns of the business community to

government officials in a unified voice and increase the likelihood that the agenda will be adopted.

Center for

International

Private

Enterprise

1155 15th

Street, NW, Suite

700

Washington, DC 20005

Tel: (202) 721-9200

Fax: (202) 721-9250

www.cipe.org

[email protected]

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In Iraq, CIPE has provided technical and financial support to numerous organizations in order to support their

institutional capacities and strengthen their capability to play an effective role in democratic and economic processes. CIPE started

supporting work on PBAs in Anbar, Basrah, and Najaf in 2008 with business organizations in multiple sectors. The business

community, through their private sector organization representatives, identified the economic sectors that they felt were pivotal in

advancing and promoting Iraq’s economy at the provincial level. The private sector organizations then identified the main barriers in

those sectors and offered solutions. Workshops involving the leadership of business organizations and specialists and researchers in

provincial economic affairs were organized. The events gave participants a chance to discuss their ideas, propose solutions, and

contribute to economic development in these crucial sectors. The resulting agenda is the fruit of this effort.

When business associations come together to promote a core set of market-oriented policies, they are much more

effective than if they pursue policy change individually. CIPE will continue supporting such organizations in making their voices

heard by decision-makers. This agenda constitutes a step that the private sector’s organizations have taken to define their role in

achieving sustainable provincial level development in a newly democratic society. Success is to be attributed to all – organizations and

individuals alike – that help promote the standard of living for all people in the province.

I would like to extend my deep appreciation to the organizations and individuals that have contributed to finalizing the

Najaf business agenda.

Abdulwahab Alkebsi

CIPE Regional Director for the Middle East and Africa

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Message of the Business Associations in the Holy Najaf Province

By the Name of God; the Most Gracious, the Most Merciful

Your Excellencies,

Governor of the Holy Najaf, President of Provincial Council of the Holy Najaf, and Chairman of Provincial Investment

Commission of the Holy Najaf Province

Greetings to all of you,

We extend our gratitude to you for the efforts you are making to build up the Holy Najaf Province under the developments and

changes taking place in our beloved country, Iraq, after September 4, 2003. In order to put these efforts on the right track and direct

them to find solutions for problems impeding the development process, we feel that our ethical responsibility and feelings towards our

nation direct us, as the business associations and economic organizations in the province, to provide assistance to you. In fact, all

efforts need to be consolidated to move our province forward in all domains of economy and support its position as a Capital for

Islamic Culture for 2012. The province was selected for this position during the Conference of Ministers of Culture in the Arab

countries which convened in Lybia in December 2007.

Business associations and economic organizations in the Holy Najaf Province convened with a deep feeling of their

responsibilities, tasks, and role to develop and improve local economy in the province. They conducted an accurate diagnosis of the

major impediments and challenges facing the process of reform and development in the province. They worked on providing serious

solutions and proposals to overcome these impediments and identify the competent authorities that can participate in reaching these

solutions.

The business agenda took a year to be produced, since late 2008, with substantial assistance from CIPE. The major objective of

the agenda is to create an understanding between the public and private sectors to build a real partnership between them. This is not

the first attempt in this domain; it builds on similar experiences in other countries in the third world. The same has been already

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implemented in Kurdistan Region in Iraq. We all hope that this effort will be welcomed by you and that it will have your care and

attention. We hope that our dialogue will go on in order to implement the content of this agenda in support of the role and importance

of the private sector in building this holy province to serve our beloved country: Iraq.

Business Associations and Economic Organizations Participating in Preparing the Business Agenda for the Holy Najaf

Province:

1. Chamber of Commerce in the Holy Najaf

2. Federation of Iraqi businessmen- The Holy Najaf Branch

3. Federation of Iraqi Industries/ the Holy Najaf Office

4. Federation of Contractors/the Holy Najaf Branch

5. Federation of Farmer Associations/ the Holy Najaf Branch

6. Federation of Importers and Exporters/ the Holy Najaf Branch

7. Association of Agricultural Engineers/ the Holy Najaf Branch

8. Association of Veterinary Doctors/ the Holy Najaf

9. Association of Engineering Professionals/ the Holy Najaf

10. Association of Hotels and Restaurants in the Holy Najaf

11. Association of Travel Agencies/the Holy Najaf

12. Society of Producers of Dates/ the Holy Najaf

13. Al-Khair Agricultural Society/ the Holy Najaf

14. Society of Pesticide Dealers/ the Holy Najaf

15. Society of Bee Keepers/ the Holy Najaf

16. The Iraqi Society for Consumer Rights Defense (ISCRD)

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(Signatures of the above agencies)

Coordinators of Committees of the Business Agenda in the Holy Najaf Province:

1. Dr. Muna Mousawi

2. Dr. Sa’doun Hmoud Jutheir Rbei’awi

3. Dr. Yusef Hjeim Sultan Ta’ie

4. Dr. Ihsan Kathem Sharif Qurashi

5. Dr. Adel Hadi Hussein Baghdadi

6. Salah Hasan Abdul Abbas Al Rfeish

7. Isam Hameed Dodah

8. Ali hadi Abdul Jawad Naffakh

List of names of the consultant team to review the Business Agenda of the Holy Najaf Province:

1. Dr. Sadeq Ali Ta’aan

2. Dr. Mu’ayyad Abdul Hussein Al-Fadl

3. Dr. Muna Turki Al-Mousawi

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9. Dr. Sa’doun Hmoud Jutheir Rbei’awi

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Introduction:

The transition taking place in Iraq, and the Holy Najaf Province in particular, since September 4, 2003, including the growing

economic openness of the country, has affected the economic status in the province in several aspects and directives. The calls for

shifting towards the market economy in a short period without any thorough studies have hindered the implementation of some of the

transition mechanisms and components. Thus, the economic programs of the local government have been confused and some funds

put towards projects could have been better invested in other critical activities to the interest of the city.

One of the proper principles to shift to the market economy is to develop laws and legislative frameworks, as well as proper

economic planning and sound regulatory frameworks in the business organizations. These principles have been gradually reflected in

the legislative steps made by the legislature and strategic directives that have been going on the right track recently.

In light of the growing financial and human potentials for business organizations and their increasing experience during the

past years, deliverables achieved so far do not reach the aspired level. The historical and religious importance of the province makes it

a major economic source that yields large revenues if opportunities are maximized in a sophisticated, scientific method. As it is well

known, this province attracts thousands of visitors every year from all over the world coming to visit the sacred shrines and historical

sites. Religious tourism is still in need of further development. Also, the industrial sector in the province needs to put forth its

programs and plans for review. Moreover, the distinct agricultural status in the province by virtue of its fertile land can be a trigger to

develop the agricultural sector to increase and improve productivity per dunum. Moreover, the openness of the province to other

provinces all year long makes the trade and construction activities of critical importance. These activities need to be a focus of

attention and appropriate methods need to be employed to help advance these domains.

In order to consolidate all efforts to advance the economic status of this province, a common language must be established

between the public and private sectors. A culture must be developed to highlight the importance of the private sector’s contribution to

the development of the country in general and the Holy Najaf Province, in particular. Officials in the public sector must be convinced

of this because ignoring the capacities and competencies of the private sector will result in negative effects on growth in the province.

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Some Indicators of the Holy Najaf Province

The Holy Najaf Province is a sacred historical city and a renowned religious and scientific site. It was built around the shrine of Imam

Ali bin Abi Taleb (May Peace be Upon him) in Al-Koufah when it was first discovered late in the second century. It inherited Al-

Koufah’s status and population. Today, it is one of the largest Iraqi cities. The word “Najaf” means “the place that water cannot cover

or flood.” Najaf will be the Capital of Islamic Culture in 2012, meaning that the province, official agencies and the civil society

organizations have little time left to meet the requirements of this project to help the city cope with the event and its significance as

“the Islamic Culture Capital.” This status reminds others of the historical importance of this city, known for its scientific and literature

achievements given its location on the civilized triangle of Al-Heera, Al-Koufah, and Najaf. The city, along with the other two “legs”

of the triangle, has always influenced the lives of Muslims, and Iraqis in particular. Following are some of the main indicators of the

Province:

1. Geographic Indicators of the Holy Najaf Province

The Holy Najaf City is situated at the edge of the western desert hill of Iraq to the south-west of Baghdad, 160 km far away. The city

is 70 meters above sea level. It is at 44 degrees of longitude and 19 minutes, and at 31 degrees of latitude and 59 minutes. To the north

and northeast, it is bordered by Karbula’ city, which is 80 km away. To the south, it is bordered with Saudi Arabia and to the East,

Diwaniyah and Samawah provinces. To the west, it is bordered with Al-Anbar Province. The space of Holy Najaf Province is

28824km2. That is 6.6% of total space of Iraq, which is 435244km

2. The Holy Najaf Province encompasses three main districts: Najaf,

Koufah, and Manathreh, the spaces of which are 24461km2, 437km

2, 626km

2, respectively. It has 7 subdivisions: Haydariyah,

Shabaka, Abbasiya, Hurriya, Mishkhab, and Qadisiya.

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2. Population Indicators of the Holy Najaf Province:

The population of Najaf Province counts for 1,042,900 as per 2006 statistics. This figure counts for 3.7% of total population of

Iraq (about 27 million). In this respect, Najaf ranks as the ninth biggest city in Iraq.

3. Industrial and Mineral Indicators

Explorations have revealed certain mineral reservoirs and residuals, and raw materials such as the oil field in Al-Kufl area. The

soil investigations revealed fields of liquefied gas and many other types of stone, rock, sand and rubble with potential for uses in

chemical, construction, extractive, and manufacturing industries. It also has several mineral fossils such as silicates, precious

stones, igneous rocks, sulfur residuals, and other metal and nonmetal resources.

A satellite picture of Najaf City

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4. Tourism Indicators

Religious tourism in the Holy Najaf Province is a major source of revenue with the holy shrines and sites of Imam Ali bin Abi

Taleb (May Peace be Upon him), Al-Koufa Mosque which houses the shrine of Moslem bin A’queel (May Peace be Upon him),

and the shrines of Hani bin Urwa and the Companion Maitham Tammar. It also has several sites, mosques, and graveyards of the

Prophets Hood and Saleh (May Peace be Upon him) in addition to other several antiquities.

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5. Agricultural Indicators

By virtue of the Euphrates River, which is the major source of water in the Holy Najaf Province, its fertile soil, and the skilled

agricultural labor, the basic ingredients are all available in the province to invest in the agricultural sector.

Rice ranks first among agricultural products in the Holy Najaf Province, followed by wheat, barley, and maize. Other agricultural

indicators include fruit production, agricultural machinery and equipment, as well as large numbers of livestock heads. These

require further inputs to develop and improve.

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6. Indicators of Trade and Constructions

By virtue of the religious, archeological, and historic importance of the Holy Najaf Province and the ample religious occasions and

rituals, it receives hundreds of thousands of visitors a year. This makes it a busy trading center all year long. Therefore, it needs

more construction and commercial projects to help accommodate the increasing numbers of visitors and revive the trading

movement.

Statistics reveal that the goods from Iranian, Chinese, and Syrian origins traded in 2006- 2008 in the province accounted for more

than USD 20 billion of imports.

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The Private Agricultural Sector

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Summary:

The Agricultural Sector is vital for the economic development process in many countries worldwide. It is important because it

is the bridge between production and consumption.

The Holy Najaf Province has a distinct geographic location and nice weather conditions adequate for highly diversified

agriculture, which produces several types of fruit, vegetables, and cereals. It also has the appropriate conditions for bee, poultry, and

fish keeping as it is located on the Euphrates. In the past, it was known as the main province in Iraq to produce the rice known as “Al-

Anbar Rice” of “Mishkhab,” which is known for its high quality and nice flavor worldwide. The province is also famous for

producing barley and maize. Fields of tomatoes, potatoes, and palm trees spread over large spaces in the province. However, the

agricultural status in the province has deteriorated noticeably during the past six years for several reasons including, inter alia, water

scarcity, the increasing rate of desertification and salinity, the crisis of energy and fuel, and the lack of government intervention to

provide fertilizers, seeds, and soft loans.

The governmental legislation frameworks are also insufficient to safeguard the local agricultural products. Therefore, several

farmers have abstained from working in the field and opted for other jobs such as joining the armed forces to secure a better living

standard. Agriculture has become the profession of troubles and losses, which requires a consolidation of efforts to lay down the basis

for good planning to help the sector restore its importance in the province to support the gross national product of the whole country

and make it a source for food security.

Introduction

Since the founding of the Iraqi State early last century and until the present date, all walks of life including the economic one

in the Holy Najaf Province have been neglected. It is one of the agricultural provinces especially in terms of the strategic crops such as

rice and amber, in addition to other field crops that suit its soil and climate.

Although the province was included in the agricultural initiative to which the Cabinet agreed to finance agricultural projects

through loans to farmers and livestock owners, the attention given is still insufficient. The funds are limited and not well invested due

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to the administrative corruption and lack of criteria for giving those loans. Some beneficiaries used those loans for non-agricultural

purposes leaving the agricultural concern behind.

Farmers and other stakeholders in the province hope that they will be assisted to advance agriculture as a major economic

contributor.

First: Attributes of the Private Agricultural Sector in the Holy Najaf Province

The Holy Najaf City has the “divine” grace of the Euphrates and cultivable land. At present, millions of dunums of virgin land are

available for agriculture with water available from the Euphrates and fresh non-saline water from wells in the Western Desert (Badia)

of Najaf. There are also spaces of desert land, on the road to the sacred city of Karbula, of 60 Km length and 11 Km width. At

present, it is planted with several types of vegetables including tomatoes, cucumber, eggplants, and onions. Following are the

attributes of this sector:

1. The province has large spaces of fertile cultivable land as illustrated in Table No. (1).

2. Most of this space is located close to the Euphrates which provides water for most of this land. The remaining part of it

depends on wells and underground fresh water.

3. The legislative framework of this sector is still inadequate and fails to cope with developments in other sectors and domains.

4. Low productivity per dunum of the agricultural land.

5. Imported crops are highly competitive to the local product which is still neglected.

6. Immigration of the labor force from the province for more profitable jobs.

7. Water scarcity due to the decreasing level of the Euphrates and the little rainfall during recent years.

8. Livestock heads are decreasing due to the spread of diseases, and shortages of land for vegetation and animal feed.

9. Agricultural automation is still lagging behind and insufficient due to the government’s ignorance of it.

10. Shortage and high price of seeds and vaccines due to the poor governmental intervention in this domain.

11. The poor level of research and development as well as the absence of scientific approaches in this sector.

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12. Widespread administrative and financial corruption in the governmental and agricultural departments, which impedes delivery

of agricultural projects.

13. Deterioration of bee, fish, and poultry keeping in the province due to several reasons including shortage of animal feed and

vaccines as well as the lack of promotion for the local product.

Table (1)

Space of Districts and Sub-divisions in the Holy Najaf Province and Cultivated Spaces during 2004-2008*

District/Sub-

division

Space

Km2

Cultivated Spaces in Dunum

2114 2115 2116 2117 2118

Najaf 1133 3511 6511 7311 6391 5311

Al-Haidariyah 1228 5111 4851 4751 51491 3511

Al-Koufa 129 5611 5311 5111 4511 2311

Al-Abbasiya 85 56811 55911 55111 56311 47141

Al-Hurria 223 21251 21111 21311 21511 2831

Al-Manathra 324 2851 27811 27251 25748 5151

Al-Mishkhab 123 36417 35851 36311 36477 36138

Al-Quadisiya 179 52721 52511 52611 52483 52711

*The above data are taken from the Statistics Department of the Holy Najaf Province

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Second: Methodology of the File

Core Partners in this Profile

1. Federation of Farmer Associations/ the Holy Najaf Branch

2. Association of Agricultural Engineers/ Holy Najaf Branch

3. Veterinary Doctors Association/Holy Najaf Branch

4. Association of Engineering Professionals in Holy Najaf

5. Association of Dates’ Producers in Holy Najaf

6. Al-Khair Agricultural Society in the Holy Najaf

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7. Society of Pesticide Traders in the Holy Najaf

8. Several consultancy firms

9. Federation of Importers/Exporters/ the Holy Najaf Branch

a. Classification of the Private Agricultural Sector in Holy Najaf

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Third: Major Problems of the Private Agricultural Sector and Proposed Solutions:

Based on the above, these problems and solutions can be summarized as follows:

1. Some Legislative Frameworks and Procedures are Irrelevant:

Problem Proposed Solutions Stakeholders

1- Laws in place do not serve the

agricultural sector especially the

Law of the Ministry of Agriculture

No. (35).

2- The pace of enacting new laws for

the Agricultural Sector is very slow.

3- Multiple problems exist between

owners and farmers.

4- Decisions to increase prices of

agricultural products are not well

considered and do not respond to

the market prices.

5- The local product is incapable of

competition.

Enact some laws to help advance the

agriculture status and enforce laws that help

develop the agricultural process.

Revisit the Law of the Ministry of

Agriculture No. (35)

Review decisions to increase prices of

agricultural products to be made on

scientific rules that respond to the market

trends.

Enact laws to promote local agricultural

products (plant and animal) and increase

their competitiveness to foreign products.

The House of

Representatives/ the Iraqi

Parliament

Ministries of Agriculture,

Finance, and Trade

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2. Low Production of Agricultural Crops

PPrroobblleemm PPrrooppoosseedd SSoolluuttiioonnss SSttaakkeehhoollddeerrss

1- Insufficient exploitation of cultivable

land.

2- Reclamation of agricultural land has

stopped.

3- Immigration of agricultural labor force

to the city because of unemployment.

4- Lack of diversification and innovation

of crop growing.

5- Serious competition of imported

agricultural crops.

6- Field crops, orchards, and forests do not

get enough attention, which also applies

to gardens and flower nurseries.

7- Low fertility of agricultural land and the

low productivity per dunum.

- Optimal exploitation of all cultivable land.

- Work on increasing the space of reclaimed land for

investment purposes and to increase production.

- Provide labor force and pay attention to the rural

areas in Najaf by controlling migration to the city

and securing means for welfare.

- Grow new agricultural crops in the area including

sugar beets and potatoes- two crops that grow in

sandy areas.

- Increase the level of quality and competitiveness of

agricultural products.

- Promote cultivation of field crops, orchards, and

forests, and give due care for nurseries and gardens.

- Maintain soil fertility and increase productivity per

dunum by introducing new technologies in

agriculture, fertilizers, and seeds of high

productivity and other necessary pesticides.

Prime Ministry

Ministry of

Agriculture

Ministry of Planning

and Development

Cooperation

Ministry of Trade

Ministry of Science

and Technology

Investment

Commission of

Najaf

Provincial Council

of Najaf

3. Scarcity of Water Problem


1. Low rainfall volume.

2. Lack of dams.

3. Negligence of irrigation projects.

4. Available water is not made use of.

5. Artisan wells fail to serve the purpose and

new wells are not being dug, nor do

appliances exist to do so.

6. Lack of weather forecasts.

- Create new methods for irrigation like

dripping.

- Construct dams.

- Build irrigation canals and supply water

for non-reclaimed land.

- Provide appliances for digging wells.

- Develop weather forecast stations to

predict changes in the weather

conditions.

Ministry of Water

Resources

Ministry of Agriculture

Ministry of Science and

Technology

Provincial Council of

Najaf

Weather Forecast Station

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4. Shortage of Livestock


1. The low and decreasing number of

livestock heads due to over

slaughtering and smuggling many

heads outside the country.

2. The few and decreasing number of

poultry and fish projects.

3. Most of imported eggs and meat

and their products are not subjected

to lab testing and analysis.

4. Shortage of vaccines, and those

imported by the private sector are

not subjected to quality assurance.

- Control slaughtering and impose strict controls on

borders to combat livestock smuggling.

- Establish and develop pasture land projects and pay

due attention to livestock, poultry, and fish projects.

- Vaccines must be provided in relevant quantities

and put for quality assurance tests to help maintain

good health of livestock.

- Enforce the role of control and quality assurance

agencies to test local and imported animal products

in order to maintain health of consumers.

Ministry of

Agriculture

Ministry of Interior

Investment

Commission of

Najaf

Ministry of Health

Ministry of Trade

Central Office for

Metrology and

Quality Assurance

Provincial Council

of Najaf

5. Decline of Bee Keeping


1. A severe decrease in bee keeping in farms

and fields.

2. Medicines and feed alternatives are not

provided nor are appliances for bee keeping.

3. There are no research centers specializing in

bee keeping in the province.

4. Inadequate level of training programs aimed

at increasing the level of professional

education for the Iraqi bee keepers.

5. Imported types of honey that are invalid for

human consumption are sold for low prices.

- Establish a research center for bee

breeding and development and detecting

diseases to be treated.

- Support bee keepers and provide required

medicine and feed alternatives in addition

to all other appliances for bee keeping.

- Inform Iraqi bee keepers of foreign

experiences and experiments through

training programs.

- Position all types of honey, including

those locally produced and the imported

ones, for testing to ensure validity.

Ministry of

Agriculture

Ministry of Trade

Ministry of Health

Central Office for

Metrology and Quality

Assurance

Al-Koufa University

and other Higher

Education Institutions

and other relevant

research centers.

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6. Lack of fertilizers, seeds, and agricultural machines


1. The required fertilizers are not available, and when

available, they are invalid due to their old dates and the

lack of appropriate storage.

2. Locally produced and approved seeds are not available

3. The required vaccines are not available.

4. Agricultural machines are old and obsolete.

- Provide fertilizers, seeds, and

vaccines required for the

process and provide relevant

storage areas.

- Provide modern agricultural

machines.

Ministry of

Agriculture

Ministry of

Industry and

Minerals

Ministry of Trade

7. Food Processing Industries are Shrinking


1- Shrinkage of local industries in

general, and food processing in

particular.

2- Selling some plants and factories.

3- Lack of support for rural and

handicraft industries.

4- The lack of ancillary industries.

- Rehabilitate local industrial projects by means of

a governmental initiative.

- Introduce investment opportunities by

establishing food processing factories.

- Rehabilitate and develop existing industries.

- Support rural industries.

- Establish ancillary industries.

Prime Ministry

Ministry of Industry

and Minerals


Investment

Commission of Najaf


Najaf

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8. Lack of Research and Development


1- Scientific approaches to solving

problems of the agricultural sector are

lacking.

2- Extension and educational courses are

few.

3- Technical and economic studies are not

conducted for agricultural projects.

4- Budget allocated for scientific research,

studies, and consultations is minimal.

5- Studies on food security and alternative

agricultural crops are few.

6- Public departments of agriculture do little

research and have no established

development institutes.

7- There is poor coordination between Al-

Koufa University and other agencies

involved in agriculture in the province.

- Employ scientific techniques in problem

solving.

- Organize training and extension courses for

farmers, especially those in Najaf, who wish

to be educated.

- Promote studies on food security and

alternative agricultural crops.

- Abstain from establishing new projects

unless relevant economic and technical

feasibility studies have been completed.

- Establish research and development firms at

the public departments of agriculture.

- Coordinate with the Faculty of Agriculture

at Al-Koufa University and other research

organizations to provide necessary

consultations and research for the province.

Ministry of

Agriculture/ Public

Commission for

Agricultural

Research

Department of

Agricultural

Extension

Relevant Higher

Education and

Scientific Research

Institutions in Najaf

Ministry of Science

and Technology

Farmers’

Associations.

9. Poor Level of Infrastructure and Logistic Support


1- Lack of roads qualified for

transporting agricultural products

from the rural areas to the city.

2- Lack of adequate transport

vehicles.

3- Lack of refrigerated storage areas.

4- Available silos are insufficient

- Construct new roads to connect the rural

areas with the city in order to facilitate

transport of agricultural products

- Provide appropriate and necessary

transport vehicles.

- Introduce investment opportunities by

establishing refrigerating and freezing

storage sites, and constructing new and

sufficient silos.

Ministry of Housing

Ministry of Transport

Ministry of Agriculture,

Trade, and Transport

Investment Commission of

Najaf

Provincial Council of Najaf

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10. Investment Opportunities are Inadequate


1- Poor level of local and

foreign investment

2- Small projects currently in

existence are not given due

attention

3- Difficulties facing

enforcement of the Law of

Investment

- Give due attention to the private sector and foreign

investment.

- Establish a public private sector partnership with clear

policies and procedures to ensure success.

- Create a joint capital to facilitate agricultural

production works.

- Enforce the Law of Investment and update it for easy

application.

- Revive agricultural programs and pay due attention to

small scale projects in existence now.

- Encourage previous endeavors after developing them

and overcoming failures.

House of

Representatives

Ministry of

Agriculture

Ministry of Finance

Investment

Commission of

Najaf

Provincial Council

of Najaf

11. Administrative Corruption


1- Incompetent and non-specialized

management of the agricultural sector.

2- There exists a serious imbalance in

lending procedures, which results in

wrong use of loans and those in charge

of the lending process do not observe

fiduciary principles.

3- The role of the province in developing

the agricultural sector is still inefficient.

- Make note of administrative and technical

specialized competencies and put the right

person in the right position.

- Impose strict controls and balanced criteria

to distribute loans so that they reach those

who may benefit the most.

- Make all efforts required by the Provincial

Council members to help develop and

advance agriculture in Holy Najaf

Province.

Ministry of

Agriculture

Ministry of Finance

Ministry of

Planning and

Development

Cooperation

The Provincial

Council of Najaf

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12. Scientific and Technical Expertise is not Well Exploited


1- Lack of

coordination

between relevant

agencies to make

use of the higher

education, scientific

research and

education outputs.

2- Lack of focus on

the agricultural and

consultancy centers.

- Coordination must be observed between the relevant agencies to

make use of the higher education and education outputs. Benefit

from technical staff should be achieved by involving vets,

agricultural engineers, agricultural extension officers, and

graduates of preparatory agricultural schools in agricultural

projects.

- Provide sufficient appliances to help those staff members do their

tasks properly

- Involve technical staff in planning and implementation through

minimizing bureaucracy and assigning them a leadership role in the

agricultural process.

- Pay due attention to agricultural and consultation firms and

develop them


Ministry of Higher

Education and

Scientific Research

Ministry of Education


Technology

Professional

organizations, unions

and associations in the

private sector.

13. Declining Role of Farmer Associations


1- Agricultural associations

are influenced by the

official and partisan

pressures.

2- There is a lack of

technical and

professional staff

3- Poor support and self

financing

- Associations must be free, autonomous, and kept away from

official decision making to assume their role in advancing the

agricultural sector in the province.

- Farmer associations must be represented on the committees of the

Provincial Council and other governmental institutions, as

relevant.

- Create a Chamber of Agriculture and a private agricultural council

in each province.

- Support and fund associations and involve professional staff in the

leadership of such associations.

Prime Ministry

Ministry of

Agriculture

Ministry of

Finance

Provincial Council

of Najaf

Civil Society

Organizations as

relevant.

31

14. Agricultural Loans are not being used


1- Financial and administrative corruption in

the lending process as loans are given to

other beneficiaries rather than farmers and

those involved in the agricultural business.

2- Complicated and prolonged red tape of

lending to farmers.

3- The lack of monitoring and evaluation to

ensure the use of those loans for their

intended purposes.

4- The lack of a clear and transparent

mechanism for granting those loans.

- Lend only to farmers and owners of agricultural

projects

- Facilitate the lending process by reducing the red tape

and redundant requirements.

- Create monitoring and evaluation committees to

follow up on the use of loans to ensure they are used

for agricultural purposes.

- Set an explicit and transparent mechanism to control

lending.

Prime

Ministry

Provincial

Council of the

Holy Najaf

Ministry of

Agriculture

Ministry of

Finance

15. Miscellaneous Problems


1- Negligence of the rural areas in Iraq

has resulted in migration to the city.

2- Agricultural land is abused and

other projects are built on it.

3- High prices of fuel are unaffordable

to most farmers.

4- The State gives little attention to the

environment

5- Agricultural land is not being

reclaimed.

- Pay attention to the rural areas in Iraq in general, and

in Najaf in particular, by strengthening

belongingness of farmers to land, and establish

projects to help minimize migration such as better

schools, modern housing, and agricultural factories

and manufacturing facilities.

- Control abuse of agricultural land and stop

establishment of other projects on it.

- Subsidize fuel prices for farmers.

- The State supports leading projects and pays

attention to environment.

- Launch serious and wide scale campaigns to reclaim

agricultural land.


Ministry of Irrigation

Ministry of Electricity

Ministry of Oil

Ministry of Trade

Ministry of Housing

Ministry of

Environment

Investment

Commission of Najaf


Najaf

31

The Private Industrial Sector

32

The Private Industrial Sector

Summary:

The major impediments in the Industrial Sector of the Holy Najaf Province can be summarized as follows:

1. The lack of power supply (electricity and fuel) causes companies and factories to stay idle most of the time, which results in

industrialists purchasing the needed power supply from the black market no matter what repercussions may occur in terms of

operational costs.

2. Technical and administrative experience of those working in the private industrial sector is insufficient.

3. The lack of explicit and transparent operational structures among governmental agencies, which impedes interaction with the

private industrial sector while permitting unjustifiable centralization and routine.

4. Production lines are still operating obsolete technologies and machinery, which results in declining quality and high operational

costs.

5. High cost of upgrading production lines and infrastructure of private industries, which leaves the industrialist unable to compete

with the market trends and developments.

6. Complicated lending processes and procedures for private industrial projects and no proper mechanism and objective criteria in

practice for lending to industrialists. Lending is influenced by personal relations and partisan affiliations with no respect for the

public interest of the State and the province.

7. Mechanisms to identify standards and specifications of national products in Najaf are insufficient, which has resulted in

incompetent finished products with very high overhead expenses incurred by the original product.

8. Poor coordination, or complete lack thereof, between ancillary and supporting industrial structures.

9. The private industrial sector is not represented on the Investment Commission of the Holy Najaf Province.

10. Insufficient legal and security protection for both the local and foreign investors

33

11. Lack of coordination and cooperation among the several agencies involved in data and information disclosure, resulting in a

lack of accreditation.

12. Financial, administrative, judicial, and political corruption creates a burden for the development process of the private industrial

sector in the province.

13. The increasingly noticeable importation of various low quality goods for low prices. This has affected the competitiveness of

locally produced goods.

14. Departments of the province do not promote national industries and most of their procurement offers go to imported goods.

15. The State represented by its governmental department involved in the process does not work on facilitating and deregulating the

process of raw materials supply as required for industry.

16. High costs of participation in industrial and commercial exhibitions and events (locally and abroad).

17. Imported raw materials are not exempt from customs duties.

18. The printing industry in the province is seriously abandoned, although there are 60 print houses and no governmental agency

available to follow up on their operation.

34

Introduction

For a long time, the private industrial activity in Najaf Province was limited to consumer industries which fulfilled the needs of the

province population. However, some of these industries had access to some external markets whether outside the province or outside

Iraq. In general, these industries targeted the province’s market because its industrial enterprises were of small capacity and unable to

supply the external market demand for their products on a continuous basis. Therefore, the industrial activity in the province was

limited to food processing, textiles, and construction industries. Other industries such as chemicals, basic metals, and engineering

industries declined. Reasons for this decline include the general consumption directive, and the private industrial investments were

directed to industries that yielded more and immediate profits due to the lack of knowledge of the sector. Moreover, the public sector

enterprises have been exposed to the conditions prevailing after April 2003; the production of some declined, while others ceased to

operate. Industry in Iraq has been exposed to hard conditions due to destructive wars and the comprehensive economic embargo.

35

Therefore, it failed to cope with developments in the industrial domain worldwide. In fact, some industries ceased to operate and

others witnessed a declining production.

Despite the importance of the private industrial sector in Najaf, its development is moving at a very slow pace compared to the other

sectors of construction and banks. It has been in severe decline due to the poor performance of human resources, its infrastructure

facilities are inadequate, technological expertise transfer is not available, production, marketing and management methods are still

underdeveloped, and local private industries cannot stand competition with imported products due to the lack of standards to help

improve quality of national products and enhance its competitiveness. Moreover, investments in this sector are limited and technical,

financial, and marketing assessment is not available for projects.

First: Attributes of the Private Industrial Sector

The private industrial sector in Holy Najaf is known for the ample availability of resources for a successful industrial sector. These

resources, including raw materials and labor, are not taken advantage of. The status of industry in Najaf is not different from the

status of industry and economy in Iraq. In general, performance in this sector is poor in terms of its mechanisms and operations, and

real estate allocation and funding/investment methods face many hindrances. Other factors include the following:

1. Poor skills and scarcity of technical staff at present which can’t accommodate to developments in technology in neighboring

countries and other countries worldwide.

2. Products of private industries in Holy Najaf, as is the case in other provinces, cannot stand the competition of imported products

in terms of both price and quality. This is due to the poor level of safeguards for the local product and the lack of standards and

rules to improve quality of national products and enhance their competitiveness.

3. Limited investments in the private industrial sector, local and foreign, due to fears resulting from several impediments.

4. The role of the Ministry of Industry is insufficient in supporting and promoting the industrial sector. Loans must be given to fund

industrial projects, the lack of which results in closing down several factories due to shortage in financing and the increasing

competition of foreign products.

36

Second: Methodology of the Private Industrial Profile

1. Core Partners in the Profile

- Chamber of Commerce in the Holy Najaf Province

- Federation of Businessmen/the Holy Najaf Branch

- Federation of Industries/ the Holy Najaf Branch

- Federation of Contractors/ the Holy Najaf Branch

- Federation of Importers and Exporters/ the Holy Najaf Branch

2. Classification of the Private Industrial Sector in the Holy Najaf Province

Following is a classification of private industries in the Holy Najaf Province:

- Construction Industries

- Mineral Industries

- Food Processing Industries

- Leather and Tanning Industries

- Chemical Industries

- Textile Industries

- Printing and Advertising Industry

- Service Industries

- Traditional heritage and handicraft industries

- Wooden industries

37

Third: Problems and Proposed Solutions

1. Human Resources


1. Poor level of technical,

administrative and

technological skills of

those working the

private industrial sector.

2. Processes to recruit

those specialized and

experienced staff from

outside the province or

from outside Iraq

3. The insufficient use of

foreign expertise

4. The threat of Asian

expat labor exists along

with any effective

controls.

- Prepare a comprehensive program to attract and

develop administrative, technical, and industrial

competencies by providing developmental and

habilitation programs for such staff.

- Create strategy for cooperation between the education

sector and the industrial sector in order to fulfill the

needs of the industrial sector for competent staff.

- Introduce legislative reforms for residence and provide

assistance and facilities to recruit experts and skilled

labor from abroad without increasing the levels of

unemployment.

- Create new mechanisms to facilitate residence process

for companies, consortiums, and mergers between local

companies and factories on one hand and

Arab/International companies on the other.

- Create explicit and specific controls for foreign labor

force in the province in order to safeguard interests of

the Iraqi labor force.

Relevant Higher Education and

Scientific Research Institutions in

Najaf


Technology

Ministry of Industry and Minerals

Ministry of Planning and

Development Cooperation

Education District in

Najaf/Preparatory Schools in the

Industrial Stream


Ministry of Labor and Social

Affairs

Ministry of Trade

House of Representatives


Province.

2. Energy and its Sources


1- The severe shortage in power supply for

factories, which causes them to stop operation.

Sometimes they have to operate under their

capacity level.

2- Low quantities of fuel that the Ministry of Oil

- Conduct a comprehensive survey on the

needs of the private sector companies and

factories for power supply to operate their

production lines in order to identify the

quantity of required power and adjust to

Ministry of Electricity/

Directorate of

Electricity in Najaf

Ministry of Oil/

Directorate of Oil

38

supplies for companies and factories to operate

the front lines in order to operate the electric

power generators, they have to purchase them

on the black market. This affects the price of

the finished product.

3- The multiple and complicated procedures

related to the processes of fuel and oil supply

with a high degree of bureaucracy.

reflect needs.

- Create special power generation plants for

industrial and handicraft zones separate

from urban and rural supply in the province.

- Conduct a comprehensive survey of the

needs of the private sector and companies

for fuel and oil in line with specific simple

and clear mechanisms for supply.

Products in Najaf


and Minerals


Najaf

3. Legislation


1- Insufficient legal and security safeguards for the

local and foreign investor.

2- High amounts of rental for land of sand and

stone quarries.

3- Slow enforcement of the Law of Investment and

the law does not stipulate coverage of small and

handicraft industrial projects in the concessions

of owning or allocating land.

4- Non-controlled random importation of goods for

prices that can be even lower than the cost of

imported raw materials; this causes harm to the

local industry.

5- The industrialist is not free to select the type of

activity to practice in compliance with the laws

in practice.

6- Imported raw materials are not exempted from

customs duties.

7- Severe negligence of the printing industry

although there are 60 printing houses in the

Province; there is no governmental agency to

monitor and evaluate their operation. During the

- Provide security and legal safeguards for the

investor and urge the insurance companies to

operate in this field.

- Set explicit, simple, and fair mechanisms to identify

rental fees in a manner to strike balance of interests

between both parties.

- Enforce the Law of Investment and amend it to

include small scale industrial and handicraft

projects upon concession of acquiring the land for

the project.

- Enact the law of Competition and promote national

products. Prevent market dumping to help increase

competitiveness and achieve balance.

- Provide the industrialist with further freedom in

selecting or changing the type of activity, thus

creating a spirit of competition and enthusiasm

among industrialists to increase production and

improve quality.

- Imported raw materials must be exempted from

customs duties and must be treated as industrial

goods rather than commercial ones.

House of

Representative

Investment

Commission of

Najaf

Provincial

Council of

Najaf

Ministry of

Interior

Insurance

companies

Ministry of

Municipalities

Ministry of

Finance/ Public

Department of

Taxes

Ministry of

Industry

39

former regime, these were subjected to security

surveillance.

- Show more interest in the printing industry and

identify a governmental agency to monitor and

evaluate their performance with the aim of

improving its status.

4. Industrial Land


1. High rentals of industrial land which is not sold to

investors who are thus often compelled to quit their

projects when the State asks them to evacuate the

land and give it back and must move somewhere

else.

2. Since 2003, no new pieces of land are being zoned

in the province for industrial purposes.

3. Land zoned for industrial use is transformed for

other uses, which has become a widespread

practice.

4. No geological survey is made for soil due to the

lack of any classification for land to identify its

suitability for industrial uses.

5. Mechanisms to allocate land for industrial projects

are not explicit and clear as most often these

mechanisms are left to personal discretion.

1- Sell land for industrial investment projects for

ownership instead of rental and stop enforcing

industrialists to abandon their projects.

2- Enforce laws and regulations governing the

operation of mechanisms used to change

classification of land.

3- A comprehensive survey of soil must be

implemented to classify land and identify its

validity for industrial purposes.

4- Identify land suitable for private industrial

projects and give it in ownership for industrial

investors for promotional prices.

5- Set clear and specific standards for classifying

land for industrial investment purposes.

Ministry of

Municipalities

Ministry of

Finance

Ministry of

Interior

Ministry of

Health

Ministry of

Environment

Investment

Commission of

Najaf

Provincial

Council of Najaf

41

5. Financing and Investment


1- The private industrial sector lacks proper representation in

the Investment Commission of the Holy Najaf Province

2- The governmental financial assistance for industrial

investors is so rare and when available, it is inadequate. In

addition, conditions are very difficult, let alone the very

complicated procedures to obtain financing..

3- Procedures to open an L/C to import primary materials,

machines, and equipment are very complicated.

4- There is no secondary market for financial securities in the

province. Stock trading is not facilitated to enable the

industrial investor to establish large projects.

5- Land is not given in ownership for the industrial investor,

it is kept in rental only and the State can force the

industrialists to evacuate it and restore it at any time.

6- The current taxation system is not transparent. It is subject

to personal discretion and does not reflect reality on the

ground where challenges and problems are exasperating

for the private industrial sector.

7- Hard restrictions and procedures are imposed on the local

investor, which hinders funding of industrial projects from

both the public and private banks.

8- There are no incentives to attract the foreign investor into

the Holy Najaf Province.

9- The lack of a clear plan for the Investment Commission in

the province where plans and procedures are still random

and incompetent.

10- Industrial machines and equipment are not exempted from

customs duties, which results in high costs for establishing

private industrial projects.

- The Private Industrial Sector must be

represented at the Investment

Commission of the province.

Nomination must be made by the Iraqi

Industries Federation at the Holy Najaf

office

- Tax schemes, procedures and criteria

must be standardized and must be clear

and transparent.

- Governmental procedures must be

deregulated in order to have access to

loans and credit provided for the mid

and small scale industrial projects.

- Industrialists must be encouraged to

upgrade their production lines through

governmental financial support and

deregulation of L/C processes.

- Urge industrialist to participate in

industrial/trade exhibitions and events

locally and internationally organized

and provide some financial support for

them.

- Provide tax holidays for private mid

and small scale industrial projects to

promote investment.

- Seek a mechanism to provide partial or

provisional financial assistance for

private industrial projects whose

operations have been suspended.

- Coordinate with relevant agencies to

The House of

Representatives/

the Iraqi

Parliament

Ministry of

Finance/ the

Public

Department of

Customs

The Public

Department of

Taxes

Ministry of

Industry/

Department of

Industrial

Development

Investment

Commission

Ministry of

Interior

Ministry of

Municipalities

Investment

Commission of

Najaf

Provincial

Council of

Najaf

41

11- Tax procedures and regulations are not standardized.

12- The spread of financial and administrative corruption

among the state departments responsible for funding

industrial projects.

13- There is no banking facility near handicraft professionals.

establish a stock exchange in the

province.

- Open a banking facility nearby

handicraft professionals to reduce time

required for processing their

applications. It is essential to provide

all the necessary services in this area.

6. Administrative, Organizational, Technical and Supervisory Issues


1. The prevalence of financial, administrative, political, and

judiciary corruption, which jeopardizes the private

industrial sector development.

2. Complicated and overlapping governmental interventions

and procedures, a high degree of bureaucracy and

personal discretion at the relevant official departments.

3. Complicated procedures to admit imported raw materials,

machines, equipment, and spare parts. These procedures

take a long time, which result in inefficient and ineffective

production.

4. The noticeable and severe shortage of mechanisms to

identify standards and specifications, which has resulted in

the emergence of informal/illegal markets and poor quality

of the products. Thus, the authentic product has to bear

further burdens that create negative effects for

competition.

5. The low level of monitoring and evaluation of the private

industrial sector and an almost totally absent information

and statistics required for the sector in terms of planning

and evaluation of its activities.

6. Industrial investors are still ignorant of the importance of

feasibility studies when they apply for investment

Combat corruption of all forms by

applying high standards of transparency

and enforcing the legal frameworks.

The role of the Central Office for

Metrology and Quality Assurance must

be enforced to identify specifications of

the local product in line with ISO 9001

and its equivalent Iraqi standards.

Make it possible for information and data

of statistics of industry and finances,

market studies, and trends to be

published.

Investors must be committed to submit

feasibility studies for the investment

projects that benefit from the advantages

of the Law of Investment, loans, and

other investment opportunities.

Urge the private and public industrial

sector to cooperate, integrate, and

coordinate. Industrial projects of infra

and ancillary structure must be

established.

House of

Representatives

General

Commission for

Integrity/Najaf

Office

Ministry of

Industry and

Trade

Ministry of

Finance

Ministry of

Trade

Ministry of

Municipalities

Ministry of

Planning and

Development

Cooperation/

Central Office

for Metrology

and Quality

42

licensing.

7. Projects of the industrial sector lack integration and

harmony among each other.

8. The lack of standards and basics of administrative,

technical, and financial skills for those responsible for the

management of private industrial projects. This results in

negative effects on the specifications of goods produced

and the understanding of the market mechanisms and

competition.

9. Administrative routine procedures are complicated and

difficult in terms of following up on the status and affairs

of industrial projects as well as the time required for

processing applications of industrialists. Also,

industrialists frequently must incur high costs due to time

they waste in waiting to obtain several approvals and

ratifications.

10. Conditions of importation and supply for the departments

of the State are overlapped and contradictory. They do not

promote the national production, whether in terms of

finished products or inputs of industry and production.

11. The lack of coordination and integration among the

relevant agencies of the State in terms of official approvals

to obtain a license to establish industrial projects, which

can be unrealistic sometimes.

Enact laws to protect the local product

and impose taxes on imported goods

identical with the national ones and set

basics and standards to control informal

and random importation of goods.

Deregulate the process to obtain an

investment license for industrial projects

and facilitate acquisition of land required

for this purpose.

Develop administrative, leadership,

marketing, and technical skills for

industrial investors by having them

participate in training and developmental

courses inside Iraq and abroad.

Create a regulatory environment with

competence qualifications and make

decisions on a clear basis and a definite

time line.

Urge industrialists to participate in local,

regional, and international exhibits and

assist through financial and moral

support.

Create a strategic participation among the

governmental agencies industrial sector,

the private industrial sector, and the civil

society.

Assurance

Investment

Commission of

Najaf

Provincial

Council of

Najaf

43

The Private Tourism

Shrine of Imam Ali (May Peace be upon him) in Najaf

44

The Private Tourism Sector

Summary

The Holy Najaf Province enjoys religious, historical, natural, and geographic components that have not been a focus of attention by

successive governments. If such an attention is provided, it can be a positive contribution to the national product of the country as it

can help provide hard currency. The province embraces the shrines of Imam Ali, and Imam Muslem bin Aqueel (May Peace be upon

them) and also the shrines of the Prophets of God Hude and Sale, and Bah’r AnNajaf as well as Wadi AsSalam Graveyard (The Valley

of Peace Cemetery).

There are other archeological sites which attract foreign tourists to perform the rituals of visiting the holy sites all year long and tour

its religious, historical, and antiquity sites. However, and regretfully, this sector had been neglected by the successive central and local

governments for more than half a century due to various reasons. Therefore, the city has become incapable of absorbing the increasing

numbers of visitors on the several religious occasions due to the lack of hotels, tourist facilities and restaurants up to par with the

reputation of this sacred province. Moreover, the tourism activity is still primitive and lacks professionalism. It needs to be

reconsidered in terms of infrastructure, legislation, staff, management, and funding to help achieve a real jump and empower the

province to make an effective contribution to the national product of the country.

Introduction

The Holy Najaf Province is distinct for its geographic location as well as a long history of civilized, archeological, and religious

heritage. It ranked on top of all provinces due to its particular religious status. Citizens from several countries and other close

provinces visit this city, in certain religious seasons, tourists coming to the Province count for millions. As is the case with other

provinces, this province had been neglected and abandoned by the previous governments.

45

At present, however, this city is a tourist attraction by virtue of the tourism contribution to the economic, social, psychological, and

cultural conditions of the city. This will have a positive impact on all layers of the society because tourism is a sustainable economic

resource. Thus, appropriate solutions need to be created for problems facing the tourist industry in this city.

Najaf will be the Capital of Islamic Culture in 2012. This is a short time that is left for the officials in the province and other official

departments to fulfill the requirements of this project to have the city capable of coping with the concept of “the Islamic Culture

Capital.” Najaf was selected by virtue of the historic position of the area as a center of science and literature derived from the

civilization triangle of Al-Heera, Al-Koufa, and Najaf which is known for its influence on Iraqi’s lives in particular, and Muslims in

general.

Significance of the Tourism Sector in the Holy Province of Najaf

Tourism is a sustainable economic resource for the Holy Najaf Province, and it has the following significances:

1. Religious Significance

Najaf is a religious attraction for a large number of Moslems all over the world. This can be exploited for tourism purposes and

provide all conditions relevant for visitors coming to Najaf:

There are more than 300,000,000 (three hundred million) visitors wishing to visit the religious sites and shrines in Holy

Najaf.

Visits and religious and private events in Holy Najaf count for 40 visits/events per year.

On regular days, visitors count for 3000 visitor per day.

On Thursdays and Fridays, visitors count for 10,000 per day.

Visitors on religious occasions and events range between 1-4 million visitors.

46

2. Entertainment

Entertainment tourism is as significant as the religious tourism. Najaf has the necessary qualities for successful entertainment

tourism especially since it has large spaces of green panorama and the historical cities of Al-Manathra and Al-Heera. It also has

the marshes including Abu Najm Marsh that can be marketed as a tourist resort, as is the case with Al-Habbaniya tourist city.

The Euphrates River goes through the historical city of Al-Koufa and its banks can be made use of as the best tourist site amidst

fields of palm trees.

3. Economic Significance

Being a major source from which to generate large amounts of income, tourism is particularly significant to economic growth.

Profits made from tourism activities help improve the economic status in the region as a whole and in the Holy Najaf province

in particular.

4. Cultural and Social Significance

Najaf is a main center for disseminating culture of all forms. Many students come to it for knowledge and education. The

Scientific Hawza1 in Najaf is an important center for the Shiite authority all over the world.

First: Attributes of the Private Tourism Sector in the Holy Najaf

The Private Tourism Sector in the Holy Najaf is still growing at a slow pace and has not yet achieved the position it must be in for

several factors including the following:

1. The State gives poor attention to the tourism sector as a strategic economic resource and strategic planning in this

respect is opaque.

1 It is the term used for the jurisprudence school of the Ja’afari Group.

47

2. Tourism marketing is dependent on the security status in the country. There is no serious tourism marketing to attract

tourists into the province.

3. There are impediments that block out the foreign investments in tourism although there is a Law of Investment.

4. Poor coordination with neighboring, and Islamic countries in general, and in terms of providing facilities to grant entry

visas to Iraq to visit the Holy Najaf Province.

5. Multiple agencies regulate the tourism activity in the province. Some parties exercise influence in terms of issuing

entry visas for tourist groups so that it would be limited to a certain group of investors.

6. The poor awareness of tourism among those working in this field both in the public and the private sectors.

7. The private tourism sector is not included in the support, funding, and lending programs offered by the state owned

banks and the private sector banks.

8. Tourism is limited to the religious sights while the antiquity and entertainment sites in the province are abandoned and

not exploited for tourism purposes.

9. The number of hotels existing in the province does not fulfill the actual demand.

10. The poor investment of the International Najaf Airport for tourist purposes.

11. The few numbers of those working in the tourism sector with adequate qualifications and competencies..

Second: Methodology of the Private Tourism Profile

1. Core Partners participating in the Profile

1. Chamber of Commerce of the Holy Najaf Province

2. Federation of Businessmen/The Holy Najaf Branch

3. Association of Hotels and Restaurants in the Holy Najaf

4. Association of Tourism and Hotels in the Holy Najaf

5. Federation of Importers/Exporters/ The Holy Najaf Branch

48

Classification of the Private Tourism Sector in the Holy Najaf Province:

Tourism Sector

Religious Health Entertainment Antiquities

Imam Ali Shrine

Muslem bin Aqueel Shrine

Shrines of Maitham Tammar

and Hani bin Urwa

Al-Koufah Mosque

Shrine of Prophet Hude

Shrine of Prophet Saleh

Mosque of Al-Hannana

Mosque of Prophet Steih

Shrien of Kameel

Shrine of Safi AsSafa

Wadi AsSalam (Valley of

Peace) Cemetery

Mineral (sulfurous)

Water

Saline water

Bahr AnNajaf (Sea)

Hotels

Restaurants

Museums

Al-Koufah Tourist Road

Heritage handicrafts

Antiquities/Historic Sites

Inns of Shilan, Rub’e &

Takhliah

Old Houses of Najaf

49

Shrines of Prophets Hude and Saleh (May

Peace be Upon them)

51

51

Third: Major Problems of the Private Tourism Sector and Proposed Solutions

1. The Tourism Commission


1. The role of the Tourism Commission in

regulating the tourism operation in the Holy

Najaf and control of hotels is insufficient. It

must work further on increasing the level of

competence and skills of those providing the

tourist services.

2. Multiple agencies regulate the tourism

operation and some dominate, which results

in confused operations.

- Create a competent commission for tourism in the

province.

- Identify the mandate and responsibilities for all

individuals and increase the level of their competence.

- Consolidate efforts to avoid dominance of external

agencies on the tourism sector

- Organize and allocate groups to the sites where suitable

services are delivered upon their choice and

affordability.

Ministry of

Tourism/

Tourism

Commission

Provincial

Council of

Najaf

2. The Security Status


1. The security obsession is still a

barrier to the flow of local and

foreign visitors.

2. The absence of tourist police

- Enhance the security procedures in the province to facilitate

flow of visitors and promote the idea of security stability for the

international visitors.

- Orientate tourist police force with skills and potentials to enable

them provide security at tourist facilities and protect visitors.

The force staff must deal in a friendly manner in order to

increase the tourist attraction at the province.


Ministry of Tourism

Ministry of Finance

52

3. Facilitate Arrival and Departure of Tourists


Difficult to get entry visa for

applicants from neighboring

countries to Iraq to visit the Holy

Najaf.

- Coordinate with neighboring countries to facilitate

things for those wishing to visit the religious sites in the

Holy Najaf and granting them entry visas to Iraq.

- Fees required from visitors must be promotional.

Ministry of Foreign Affairs

Ministry of Tourism


Province

4. The Foreign Investor


1. There are barriers impeding the

foreign investor from investing in

the Tourism Sector.

2. Impediments of enforcing the Law

of Investment No. (13) for 2006 and

not operating the one stop shop

mechanism.

- Urge the foreign investor to invest in the tourism

sector and adopt the strategy of diversification and

exploiting land and spaces of tourist attraction. Also,

deregulate the requirements for the tourism activities.

- Enforce the Law of Investment and Operate the One

Stop Shop mechanism.

Ministry of Tourism

Ministry of Finance

Ministry of Municipalities

Investment Commission

of Najaf


Najaf

5. Support of the State for the Tourism Sector


The insufficient attention that the

State gives to the tourism sector as a

strategic economic resource.

- The State must support the Tourism Sector as

a strategic economic resource especially in

the Holy Najaf.

Ministry of Tourism

Ministry of Culture

Ministry of Finance

Investment Commission of Najaf

Provincial Council of Najaf Province

53

6. Poor Marketing and Culture of Tourism


1. Negligence of tourism marketing.

2. There are no specialized

departments at universities and

institutes to teach tourism, hotel

management, and tourism

marketing.

3. The shortage in qualified and

competent human resources to

work in tourism marketing.

4. The poor tourism culture and lack

of knowledge among governmental

officials, owners of tourist

companies and those working in

the tourism sector.

- Establish specialized institutes to qualify human resources

in the field of tourism.

- Establish the Department of Tourism and Hotel

Management at the Faculty of Business Administration

and Economics at Al-Koufa University.

- Establish preparatory schools in the tourism stream as is

the case with agriculture, industry, and commerce.

- Organize training courses inside and outside Iraq to

provide orientation for those working in the tourism

industry (men and women), and have owners of tourism

agencies participate in these courses.

- Raise awareness of tourism among all those working in

this field.

Ministry of Higher

Education and

Scientific Research/

Al-Koufa

University

Ministry of Tourism

Ministry of Foreign

Affairs

Ministry of

Education

Ministry of Culture

7. Funding


1. The Tourism Sector is not

included in the assistance, as

funding and lending schemes are

offered by the public and private

banks.

2. There are no specialized banks in

tourism to render improved

banking services for investors in

the tourism sector.

- Include the private tourism sector in the assistance,

funding, and lending schemes offered by the public or

private banks, and reduce the interest rate on loans which

must be long term loans especially for those wishing to

build touristic cities or hotels.

- Establish banks specializing in tourism as is the case with

agricultural and industrial banks.

Ministry of Finance

Ministry of Tourism

The Central Bank of

Iraq

Private Sector Banks

54

8. Strategic Planning


Inadequate

(insufficient) and

opaque strategic

planning for tourism.

- Set future strategic plans for overall tourist activity

on the short, mid, and long term with the

participation of all involved stakeholders including

the private sector. Experience of international

organizations interested in tourism must be included.

Ministry of Planning and Development

Cooperation

Ministry of Tourism

Ministry of Culture

Ministry of Higher Education and Scientific

Research

Investment Commission of Najaf


9. Tourist Entertainment Facilities


1. There are no tourist entertainment

facilities.

2. No studies are conducted to exploit

basic ingredients of entertainment

tourism in the Holy Najaf Province

and the large populated spaces as well

as the increasing number of expats

coming to the Province.

- Create a committee with representatives from

institutions involved in conducting studies in this

respect in order to make optimal use of the spaces and

sites available in this city.

- Construct housing complexes and multi-purpose

tourist facilities such as resorts and tourist cities.

- Exploit some archeological sites for touristic

purposes.

Ministry of Tourism

Ministry of

Municipalities

Ministry of Finance

Provincial Council

of Najaf Province

55

10. Hotels


1. Hotels are few and cannot fulfill the actual

demand. Total beds in all hotels in the

province are 4024, which accounts for only

54% of actual need of the province. 95% of

these hotels are 2 and 3 stars only.

2. There are no 5-star hotels.

3. Monitoring of health issues on the existing

hotels is insufficient and services delivered

are of poor quality.

- Build hotels to deliver advanced service all

over the province.

- Allocate pieces of land to build 5-star hotels

and use relevant engineering designs

according to the nature of the area.

- Impose strict control on the hotels currently

in operation.

- Instruct hotel owners to deliver the best

services to customers.

Ministry of Tourism


Ministry of Health

Investment Commission

of Najaf


Najaf Province

11. The International Airport of Najaf


1. The International Airport of

Najaf is not well exploited

for tourist purposes although

it started its real operation at

the end of 2008.

2. Limited number of flights.

- Develop and expand the International Airport of Najaf and use

it for tourism purposes.

- Open channels of communication with international travel

agencies to attract larger number of flights to all countries of

the world.

- Facilitate arrival of visitors and prompt the visa issuance.

- Provide high quality airport services

Ministry of Tourism

Ministry of Transport

Ministry of Foreign Affairs


Province

56

12. Antiquities and Historical Sites


1. Ancient antiquities and those

recently discovered are left

without any care and not made

use of for touristic purposes.

- Maintain the old or recently discovered antiquities

and repair them to be used for touristic purposes.

- Work on building these sites to be welcoming for

tourists.

Ministry of Tourism




13. Establishment of Museums


1. Antiquities of Najaf are left

without any care.

2. There are no museums to

exhibit antiquities and

archeological items.

- Antiquities must be maintained, collected and categorized

according to their dates.

- Establish museums in several areas to exhibit archeological

items found in the same locations for tourism promotion and

highlighting the role that this city assumed.

Ministry of Tourism

Ministry of Culture



Province

14. Conferences on Tourism


1. Attention given to the organization

of annual touristic events such as

conferences, symposia, and

festivals in Najaf is insufficient.

2. The poor organization of symposia,

conferences, and touristic festivals.

- Annual touristic symposia, conferences, and festivals

must be organized in preparation of celebrating Najaf

as the Islamic Culture Capital for 2012.

- Improve the organization of these symposia,

conferences, and festivals by inspiring experiences

of countries already advanced in such activities.

Ministry of Tourism

Ministry of Culture

Ministry of Higher Education

and Scientific Research


Province

57

15. Clean up Services


1. The clean up services in the province are still

inadequate for a province of this religious,

historic, and tourist importance

2. Gates of the city need further plantation of trees

and decorative plants.

- Privatize clean up services and introduce

privatization as an investment

opportunity.

- Decorate gates of the city and plant trees

at them.

Ministry of Tourism

Ministry of Environment

The Tourism Commission


Province

16. The Old Graveyard


1. Inadequate attention to the old graveyard

in terms of planning, construction and

environment.

2. Offices of graveyards are randomly

spread and there are no standards to dig

and build graves, regulate the height of

the graves and subterranean burials. The

lack of sanitary and environmental

services provided for the use of locals

and foreigners visiting the old

graveyard.

- Highlight the planning, architectural and

environmental features of this distinct site being one

of the largest sites that visitors can come to as it

embraces the shrines of the Prophets Hude and Saleh

(May Peace be Upon them).

- Offices managing graveyards must be regulated and

approve the standards of digging, and building

subterranean burials the height of.

- The need to provide sanitary and environmental

services for locals and foreigners visiting the old

graveyard.

Ministry of

Municipalities

Ministry of Finance

Ministry of Tourism

Ministry of Health

Ministry of

Environment


Najaf Province

58

17. Human Resources in Tourism


1. The expatriate labor force is

occupying the market in the Holy

Najaf

2. Very poor skills of the locals

who do not bear the burdens of

work, therefore, the expat labor

force is preferred to the local

one.

3. The labor force in the tourism

sector is insufficient.

- Impose legal controls to identify the rate of foreign labor force

and its diversity in order to protect the rights of local labor force

and guarantee job opportunities for it.

- Organize courses to qualify the local labor force inside and

outside the Country to help them acquire skills to enable them to

do their jobs in a high level of proficiency.

- Increase the number of labor force members working in the

tourism sector by opening colleges, institutes, or even new

departments at Al-Koufa University or the Commission of

Technical Institutes to provide the touristic facilities with skilled

labor force.

Ministry of Labor and

Social Affairs

Ministry of Tourism

Ministry of Higher

Education and

Scientific Research

The Department of

Residency (for Expats)


Najaf Province

59

The Private Trade Sector

61

The Private Trade Sector

Summary

The private trade activity everywhere in the world is a reflection of the economic development. It contributes to the formation

of the Gross Domestic Product (GDP) which shows the preferences of the market in terms of the goods’ quality and the living

standards for people. It can also be a “guide” for making informed decisions of investment in harmony with the needs of the market by

establishing private investment projects which help achieve internal and external savings.

The trade sector in this province faces several challenges and problems, mainly the poor infrastructure available for it

including institutions, shops, and stores. In addition, there is the limited information and knowledge of the trader in Najaf and

ignorance of international experiences due to the embargo during the former regime. Further impediments arise from the inadequate

legislative frameworks regulating this sector, the poor security protection, and the problems of power supply. Other challenges include

the poor banking services to traders, the administrative and financial corruption and the routine procedures that keep this sector in an

underdeveloped status. This requires serious dedication to create legislative framework that regulates the operation of trade in the

province and a well oriented scientific plan including the provision of an adequate infrastructure to revive this sector.

Introduction

The Holy Najaf is a major trading city in Iraq by virtue of its religious significance and geographic location as well as the

concentration of capitals and expertise in it. Therefore, the trade movement is in a constant action. It is the main source for goods’

supply to the areas in Central and Southern parts of Iraq. However, it needs to be directed in a well planned method in order to achieve

distinct results to serve the national economy and the economy of the province.

61

First: Attributes of the Trade Sector in the Province

1. Lack of confidence between the trade sector and governmental agencies on one side and between the sector and citizens on the

other.

2. The private sector is not adequately represented on the Investment Commission of the province.

3. The Iraqi trader in general, and the trader in Najaf in particular, face the problems of foreign transfers due to the

underdeveloped banking services and old modes and policies of operation.

4. Most of the traders do not possess sufficient education in the trading business and they are not well familiarized with the

concepts and terms of international trade. This adds to their limited experience in this domain due to the embargo imposed on

the country.

5. There are no large refrigerated storage areas with a capacity to store the imported goods.

6. Lack of procedures for quality assurance and quality control tests for the imported goods.

7. The fragile security situation is still a major impediment for most of the investors in trade.

8. The electrical power and its problems of frequent cutoffs, the scarcity of fuel and oils, and lack of spare parts for the power

generators have all resulted in a negative impact on the sector of trade.

9. There are no banking facilities provided for traders to help revive the trading movement in the province.

10. The complicated administrative routine that the departments of the Ministry of Trade and other involved departments practice

have resulted in hindering the trade movement in the province.

11. The administrative and financial corruption prevailing among the departments involved in the trading issue is another factor to

hinder the trade movement in the province.

12. The multiple security checking points spread all over the gates of the province create another barrier for the entry and exit of

goods due to the primitive inspection procedure, bargaining, and delays resulting from these procedures.

62

13. The openness of the province markets and the entry of large quantities of goods (most of which is of bad quality and not

subjected for quality assurance) resulted in poor competitiveness of local goods, which caused damage for the manufacturers

producing these goods.

14. Poor quality of transportation roads and the lack of developed railways to connect the province with other provinces.

15. The International Airport of Najaf is still not contributing as it should to reviving the trade sector.

16. The Law of Investment is irrelevant and inadequate to help fulfill the requirements to advance the trade sector in the province.

17. Lack of laws to regulate competition on the Iraqi market and promote local products to control the market dumping process.

18. There are no trade exhibitions to invite local and foreign companies to for them to exhibit their products and provide a forum

for exchanging ideas and expertise to develop the trade sector in the province.

19. The limited impact of associations, trade unions, and business organizations in directing and developing the trade sector.

20. There is no free trade zone in the province despite its significance for the trade in Iraq.

21. The central government is appointing commercial attaches from among the civil servants and not from the private sector.

63

Second: Methodology of the Private Trade Sector Profile

1. Core Partners Participating in this Profile

1. The Chamber of Commerce in the Holy Najaf Province

2. Federation of Businessmen/The Holy Najaf Branch

3. Federation of Contractors/ The Holy Najaf Branch

4. Federation of Importers/Exporters/ The Holy Najaf Branch

2. Classification of the Private Trade Sector in the Holy Najaf Province

5. Trade of construction materials such as steel, cement, wood, and ceramics.

6. Sanitary materials.

7. Electric and electronic items.

8. Textiles and ready-made garments.

9. Foodstuff trade.

10. Machinery and vehicle trade of all types.


1. Human Resources


1. Lack of experience of the province

traders and their limited

information on international

markets.

2. Most of the traders in the province

do not possess academic degrees in

Business Administration; however,

- Coordination between universities and research centers

on one part and the Chamber of Commerce, Federation

of Businessmen, and relevant organizations on the other

part to organize courses will develop potentials and skills

of traders and increase their information and education in

the field of trade and business administration.

- Reconsider the conditions to grant licenses of profession

Ministry of Science

and Technology

Ministry of Trade

Al-Koufa University

Commission of

Technical Institutes


64

in reality most of them do it by

intuition, practice, or learning from

others.

3. Academics in the universities and

research centers engaged in trade

consultations are not approached to

benefit from their experience.

practice. The trader must hold an academic qualification

related to business to be able to practice the profession.

- In coordination with the relevant governmental agencies,

the Chamber of Commerce organizes training courses to

help traders acquire better skills in all domains of trade

to help develop the status of the trade sector in the

province.

the Holy Najaf

Chamber of

Commerce of the

Holy Najaf Province

Federation of

Businessmen/ The

Holy Najaf Branch

2. Legislation


1- Laws regulating the import/export

transactions are not updated to cope with

the developments taking place on markets

especially the international ones.

2- Random importation of all goods and

commodities from all origins with very

poor quality and forfeit types vis-à-vis poor

performance of monitoring and quality

assurance agencies.

3- The routine procedures implemented by

relevant departments, which results in

impeding the operation of traders and

obstructing trade in the province.

4- The Law of Investment is inadequate and

fails to fulfill the requirements of

advancing the trade status in the province.

5- Poor representation of the private sector on

the Investment Commission of the

Province.

6- The central government appoints

commercial attachés from among the civil

- Review laws regulating the importation/exportation

transactions in Iraq to be in line with developments

taking place in the international trade scenes.

- Enforce the role of monitoring and quality

assurance agencies to combat fraud and control

quality of imported goods.

- Review the Laws of Customs in line with the

directives in the comprehensive plan for the

economic sectors in the Country.

- Reduce the red tape and remove redundant chains

in the series of processing transaction applications

by the departments of the State involved in the

commercial activity in the province.

- Amend the Law of Investment and increase the

private sector representation on the Investment

Commission to be more than the current rate (one

third).

- When appointing the commercial attachés, the

government must seek to recruit people with

competence from the private sector instead of

limiting this appointment to the public sector.

The House of

Representatives

Ministry of

Planning and

Development

Cooperation

Ministry of Trade

Ministry of Finance

Central Office of

Metrology and

Quality Assurance

Provincial Council

of the Holy Najaf

The Investment

Commission

Ministry of Foreign

Affairs

65

servants rather than from the private sector.

3. Power (Energy) and its Sources


1- The serious shortage of power supply,

which results in interrupting work for

traders in terms of managing their shops

and maintaining the goods in stores.

2- The low quantities of fuel and oil supplied

for the power generators and their high

prices.

3- Spare parts for power generators are not

provided in sufficient quantities, and the

high prices of repair and maintenance of

generators.

- Have the National Electricity Company provide

sufficient power supply to facilitate operation of

traders and enhance the trading activity.

- Provide a sufficient amount of fuel and oils for

traders at the official price according to specific

methods set in a relevant schedule.

- Provide spare parts for power generators by

importing them from abroad or manufacturing

them in Iraq, and establish model repair workshops

to provide maintenance services for reasonable

prices.

Department of

Electricity of Najaf

Ministry of Oil


Ministry of

Planning

Ministry of Trade

Provincial Council

of the Holy Najaf

4. Supply and Transport


1- Roads are not up-to-date. They are of poor quality

and narrow. This has negative impacts on the ability

of traders to move within the province.

2- There is no developed railway to help transport large

loads and deliver them promptly to the markets of

the province.

3- The International Airport is not well exploited for

trade purposes and in transporting goods from and to

the province.

- Widen the roads especially at the gates of the

province and asphalt them. Build a new road

network to connect Najaf with other provinces to

revive the trade activity in the province.

- Provide the province with a new network of railways

to connect it with other provinces and help deliver

large loads of goods from and to the province.

- Operate the International Airport of Najaf in a

manner to serve the trade movement in the province.

Ministry of

Transport

Ministry of

Municipalit

ies

Ministry of

Interior

Provincial

Council of

66

4- There are multiple security check points at the gates

of the province. Some of their illegal practices cause

serious harms to traders and impede the trade

movement.

- Review the status of security check points at the

gates of the province and provide them with

sophisticated inspection apparatus.

the Holy

Najaf

5. Financing and Investment


1- Subsidies provided by the government for the

trade sector in the province are limited. There

are no tax holidays provided, and importation

procedures are complicated and costly.

2- There is no free trade zone in the province

although it is of geographic importance and

borders with Saudi Arabia.

3- The role of the Investment Commission is

inadequate in the province as it is still an

emerging entity. It is not so influential in the

direction and promotion of investments.

4- There is no stock exchange in the province to

help promote investments and involve a larger

group of capital holders in associating

companies to secure the largest amount possible

of money to be invested in commercial projects

that serve the Province.

5- The public banking system in the Province is

still lagging behind and operating very old

policies with many routine procedures that lead

to a waste of time and delay. Moreover, the rate

of interest of loans given by banks is high.

6- The tax discipline is not up-to-date. It lacks

transparency and is subjected to personal and

discretionary standards, which causes harm to

- Review the tax laws, customs, and importation to be

aligned with scientific basis and become transparent,

promotional, and just.

- Establish a free trade zone to help promote trade in

the province and develop the methods of operation

for traders.

- Delegate further authorities to the Investment

Commission and review its structure in isolation

from political directives so that it can promote

investment in the province.

- Establish a stock exchange in the province to

promote capital investments in companies and other

projects in the province.

- Review policies of public banks and reduce interest

rates, as is the case in the neighboring countries and

the Gulf countries where the interest rate of loans

given for investment purposes does not exceed 2%.

- Encourage the establishment of private banks and

deregulate the association procedures. Liberalize

their lending policies to help create competition to

attract clients in a manner that serves the trade

movement in the province as traders will obtain soft

loans for the minimal interest rate.

- Review the tax laws on natural and corporate bodies

to help deliver justice in collecting the amounts and

The House of

Representatives

Ministry of

Trade

Ministry of

Finance

Ministry of

Planning and

Development

Cooperation

Ministry of

Municipalities/

Municipality of

Najaf Province

Investment

Commission

Central Bank of

Iraq

Provincial

Council of the

Holy Najaf

67

the interests of traders in the province.

7- The private banking system in the province is

not modern. It is still subjected to the Central

Bank policies as is the case with public banks.

In fact, the number of banks in the Province is

few.

8- The operation of insurance companies in the

province is still invisible, which is another

factor to keep investments away from the

province.

9- The security risk is still a major reason to keep

investments, especially the foreign ones, away

from the province.

10- There are no commercial banks to help invite

foreign and local companies to exhibit their

products and make use of exchange of ideas and

expertise.

11- There are no large department stores to provide

further opportunities and options of shopping

for customers.

rates of tax from people including traders.

- Urge the State to establish insurance companies in

order to provide credit protection for traders to

secure safety of their money and provide insurance

coverage of all types to help create an adequate

investment environment for traders.

- Work on providing security and the rule of law to

assure the investors and urge them to operate and

invest in the province.

- Open large department stores to provide further

shopping opportunities and choices. These are a

good source for profit making.

- Organize seasonal, semiannual, annual exhibitions

and fairs like those organized in the developed

countries in order to attract international and local

companies to promote their products and provide a

forum for exchanging ideas and expertise to help

develop the trade sector operation in the province.

6. Administrative, Regulatory, Technical, and Supervisory Procedures


1- There is no explicit plan for the economic

activities in the province distributed per sectors

in a manner to inform the trader of their role in

the province’s advancement.

2- Traders and businessmen are not involved in

discussing plans, laws, bylaws, and decisions

pertinent to the economic activities in the

province.

3- The administrative and financial corruption

- Traders and businessmen must be involved in the

economic planning at the province level. They need

to know their role in the annual or long term plan of

the province.

- Transparency must be observed in publishing the

comprehensive plan of the economic sectors in the

province so that each would know what role they

are expected to assume.

- The administrative and financial corruption among

The House of

Representatives

Ministry of Trade

Ministry of

Science and

Technology

Ministry of

Planning and

Development

68

prevailing among the departments of the state

involved in the sector adds another financial

burden for traders.

4- The complicated administrative routine and slow

pace of processing applications at some of the

departments of the State involved in the

economic activity.

5- The Central Office for Metrology and Quality

Assurance is not assuming an adequate role,

which makes it possible for several low quality

goods to enter into the market. Most of the goods

on the market are from Chinese, Iranian, and

Syrian origins.

6- The poor performance of the governmental

monitoring and control agencies of all levels on

the trade sector activity. This makes it possible

for unprofessional people to enter into the field

without fulfilling the requirements of the

profession practice. This has been causing harm

to traders and to the profession.

7- All those practicing trade and commercial

activities in the province have insufficient

administrative and technical skills. They just do

it by intuition away from any specialized

academic qualification.

8- The non-justifiable interventions by some of the

public and partisan figures (VIPs) in the

commercial activity.

the departments of the State involved in trade and

the commercial activities must be combated. This

requires enforcement of monitoring mechanisms,

raising awareness, igniting a genuine feeling of

citizenry and love of the country among the civil

servants and the private sector players.

- Role of the Central Office of Metrology and Quality

Assurance must be well delivered in terms of

inspecting goods and preventing low quality goods

from entering into the province markets.

- Supervision and control by the governmental organs

on the operation of traders must be enforced.

Scientific and legal mechanisms and rules need to

be put in place to govern membership of those

looking forward to join the Chamber of Commerce

and their practice of the profession.

- Training programs must be organized to help

develop capacities and skills of traders in the

province to be capable of practicing their profession

efficiently and effectively.

- Politicians and other governmental and partisan

VIPs must be prevented from interfering in trade

and the commercial activity. Safeguards must be

provided for traders by enacting laws required for

this purpose and monitoring their enforcement.

Cooperation

Ministry of

Municipalities

The Central

Office for

Metrology and

Quality

Assurance

Provincial

Council of the

Holy Najaf

Municipality of

the Holy Najaf

Province

69

The Private Construction Sector

71

The Private Construction Sector

Summary:

The political changes taking place in Iraq have provided a wide window of opportunity for construction projects all over the

country, and in the Holy Najaf in particular. This province has serious shortage in the infrastructure facilities in all domains of

life. Although huge capitals and technical experience are available for some contractors, the sector is still facing several

impediments among which are insufficient and inadequate legislative frameworks for this sector in addition to the security

concern. As a result, the contractors in Najaf adopt a conservative investment policy, poor level of training for those working

in the sector, and continue with insufficient knowledge of developments taking place in other countries of the world. There are

no soft banking facilities for contractors who are always faced with complicated red tape and prevalence of administrative and

financial corruption at the governmental agencies regulating the operation of this sector. There are several other problems that

have resulted in negative impacts on the performance of this sector as if it is was not existing at all during the past period in

terms of contributing to the construction process of the province. Therefore, serious consideration must be made for the future

of this sector by means of effective solutions for its problems to turn it into a sector capable of joining the stride of

construction and build up that the country is undergoing in the aftermath of the political changes taking place.

Introduction

The religious and historical significance of the Holy Najaf Province contributes, to a large extent, to pushing the construction

movement forward and instigating its activity. This activity requires a sound and proper direction to secure investment of

money the proper way to achieve the optimal results and help develop the Province with the least waste of resources possible.

71

First: Attributes of the Construction Sector in the Province

1. The poor level of skills of the technical staff working in the sector and their ignorance of the technological

developments taking place worldwide, especially in the neighboring countries.

2. Capitals invested in this sector are limited compared to other sectors due to the scarcity of opportunities available for it.

3. Most of the contractors adopt a conservative policy in investment and avoid taking chances due to the unstable

economic conditions in the country in general, and in the Holy Najaf Province in particular.

4. The sector maintains poor relations with other contractors in the region and other neighboring countries, which

produces negative effects on the potentials of contractors in the province.

5. The sector does not have its own potentials in most cases; rather it pays additional costs to secure the required capacity

for operation. This affects its performance and profits.

6. The sector is not highly reputed in the community. It has been ill reputed for a long time in light of some of the failed

projects implemented by some contractors in violation of the international standards of quality. This resulted in a

distorted image of the contractor in the community.

7. Most of those working in the sector do not engage in training as a basis for developing capacities and potentials and

keeping abreast of changes and developments.

8. The limited or absent research and development in the domain of construction and the limited financial allocations for

this purpose. Feasibility studies for construction projects before commencing with work on them are still rare.

9. The poor coordination between those working in this sector and the scientific, academic, and research firms.

10. There are no standards and specifications with which to benchmark construction projects in the province.

11. There are barriers between contractors and governmental agencies, which keeps contractors in a submissive position

always and under all conditions.

12. Poor support is provided by the government for the construction activity and there is a lack of promotion for it.

13. Laws are rigid and outdated, which forced many contractors to seek jobs outside the province borders.

72

14. Technical and logistical potentials that the contractors in the province possess are insufficient, which prevents them

from embarking on mega projects.

15. The multiple checking points on streets and roads. The illegal and instigating practices of some of the checkpoint

security personnel, in addition to bargaining that some of those in charge of these checking points do. This situation

has resulted in serious damage for the sector.

16. Prevalence of the administrative and financial corruption in most of the departments of the State with which the

contractors deals. This has pushed some contractors to adopt illegal methods in order to be awarded the bids, which

results in poor quality project delivery.

17. The media’s blackout in reporting on the role of construction in the process of building up the Province.

18. Allocating huge amounts of money for the departments of the State in the province within the budget has resulted in

marginalizing the role of the construction sector in implementing projects in the province.

19. Difficult access to entry visas into countries that the contractor wishes to visit as there is no preferential treatment is

given for them.

20. There is no database at the Investment Commission for contractors.

21. Construction companies are not committed to involve newly graduated engineers in their projects to help them acquire

the required experience.

22. Obviously, the general conditions of construction contracts are insufficient, they just compel contractor to be

submissive to the State.

73

Second: Methodology of the Private Construction Sector Profile

Core Partners Participating in the Profile

1. Chamber of Commerce of the Holy Najaf Province

2. Federation of Businessmen/the Holy Najaf Branch

3. Federation of Contractors/the Holy Najaf Branch

4. Federation of Industries/ the Holy Najaf Branch

5. Federation of Importers/Exporter/the Holy Najaf Branch

2. Classification of the Constructions’ Sector in the Holy Najaf

74


1. Human Resources


1. Lack of technical, administrative, and

technological skills, and experiences to

study, accept, and implement projects.

2. Ignoring consultations especially in the

engineering fields and not paying attention

to precise specialization.

3. Lack of training and development of

potentials and capacities

4. No Arab and foreign experiences are being

provided to the construction sector in the

province.

5. Construction companies are not committed

to involving newly graduated engineers

when implementing projects in order to

help them gain experience.

- Review plans of higher education with the aim of

filling in the gap in specializations serving this

sector.

- Disseminate and establish a culture of training as

a basic method to develop and maintain talents

and capacities of those working in this sector.

- Create forms of cooperation between contractors

in the province with contractors in neighboring

countries in order to attract experiences and

competencies. This will help develop this sector.

- Align and modify laws to facilitate things for

contractors from neighboring countries to

implement joint ventures with contractors in the

province.

- Commit construction companies to involve a

certain number of newly graduated engineers in

the implementation of projects to help them gain

experience as is the case in neighboring countries

such as Jordan.

Ministry of Higher

Education and

Scientific Research


and Development

Cooperation

Ministry of

Education


Ministry of Science

and Technology

Provincial Council

of the Holy Najaf

75

2. Legislation


1. Laws are obsolete and unable to cover

emerging technologies in the business

environment.

2. Laws fail to fulfill all requirements of business

success for the contractor. For instance, general

contract terms do not provide for a clause to

commit the resident engineer to respond to the

reasons of rejecting a contractor’s offer.

3. The architectural planning of the Holy Najaf

City is imbalanced, resulting in making it hard

to access pieces of land for construction by the

Municipality or other regulatory agencies.

4. Legal and security safeguards for the

contractor as an investor are insufficient, which

causes him to always be in a submissive

position in relation to the authority or

governmental agency. This violates the

contract conditions.

5. Awarding the contract bid requires a guarantee

letter and incurs further losses for the

contractor.

6. When travelling abroad, the contractor faces

hard conditions to obtain an entry visa as

contractors are not given any preferential

treatment.

7. There is a clear weakness in the general

conditions of contracts-- they all force the

contractor to be submissive to the State and its

requirements.

- Review laws and bylaws regulating the construction

works in Iraq in general and in Najaf Province in

particular in order to align them with developments

taking place in this sector.

- Review clauses in the general conditions of

construction contracts and incorporate a clause to

commit the resident engineer at the public

department to respond and explain reasons for

rejecting offers submitted by contractors within a

legal period of time to be agreed upon and identified

on an official basis.

- Set a mechanism to facilitate the contractor access to

pieces of land for the purposes of constructions

against procedures with the least routine and lower

costs to promote and support the operation of

contractors.

- Provide legal and security safeguards for contractors

by supporting insurance companies and enacting

laws to secure rights of contractors.

- Enact the laws of competition and safeguarding the

national product as well as protecting the consumers.

- Travel procedures for contractors must be facilitated

and they must be assisted to obtain entry visas to

countries they want to visit in order to save them

time and effort.

- Review the format of general conditions of contracts

to secure the contractual rights of both parties (the

State and the contractor) in a balanced and

reasonable manner.

Ministry of

Interior

Ministry of

Defense

The House of

Representatives

Provincial

Council of the

Holy Najaf

Province

Ministry of

Finance

Investment

Commission

Ministry of

Municipalities

Ministry of

Industry

Ministry of

Foreign Affairs

76

3. Energy and its Sources


1. A severe shortage in the national power

supply for construction projects.

Contractors have to use power generators

for a few hours, which delays delivery of

the project.

2. Difficult access to the sufficient quantity

of fuel and oil to maintain operation of

power generators due to fuel scarcity.

3. Shortage of spare parts of power

generators due to their high prices on the

market. This hinders the operation of

contractors and the projects they work on.

- Provide sufficient power supply from the

national sources to facilitate work of

contractors and enable them to deliver

projects.

- Provide a sufficient share of fuel and oil for

contractors at official prices according to

specific mechanisms and timelines.

- Provide spare parts for power generators by

importing them or manufacturing them

locally.

Ministry of Electricity


Ministry of Trade


and Development

Cooperation

Ministry of Oil


the Holy Najaf

4. Land Allocated for Constructions


1. For a long time, the Municipality of

Najaf has ignored the issue of zoning

pieces of land for construction and

industrial purposes.

2. Hard access to pieces of land for the

purposes of construction due to

complicated governmental routine

that lead to, in most cases, dead ends.

3. High rentals of pieces of land for

construction and industrial projects;

this causes harm to the interests of

contractors.

4. In most cases, laws are manipulated

by using land set for construction in

- The Municipality of the Holy Najaf must zone

land for construction and industrial projects’

purposes.

- Routine must be reduced to help contractors

obtain a piece of land to implement construction

works and deliver projects.

- Classify land by the Municipality of the

Province according to the nature of use

(agricultural, housing, industrial and

constructions…etc).

- Reconsider construction planning of the city

and identify areas set for housing, agricultural,

industrial and construction projects. The

aesthetic issued must be observed with an eye

The House of

Representatives


the Holy Najaf

Ministry of

Municipalities


Investment

Commission of Najaf


and Development

Cooperation

Municipality of Najaf

77

other uses such as an exhibition for

cars or a nursery for flowers…etc.

5. Land allocated for industrial and

construction projects are not included

in the construction planning of the

Province.

on reducing pollution and maintaining the

environment to the extent possible.

5. Investment Financing


1. The role of the Investment Commission in the province

is still inefficient due to its emerging status and poor

influence in directing and promoting investments.

2. Limited governmental support for contractors in terms

of tax holidays and facilitating procedures of work

commencement and implementation of the contract as

well as reducing insurance deposits and prompt

recovery upon completion of work.

3. There is no stock exchange in the province to help

promote investments and allow admittance of the

major capital holders in the construction companies to

secure investment of money in projects serving the

interest of the province.

4. State owned banks operating in the province are still

lagging behind recent developments. They still apply

routine procedures and their funding policies

contradict with the interests of contractors such as the

high interest rates and collaterals to obtain loans and

the slow pace of application processing.

5. The currently enforced tax system is not transparent

and it is subjected to discretionary and personal

standards, which causes harm to the contractors’

interests.

- The Investment Commission must be given

further powers to enable it to promote

investment in the province.

- Review the laws and regulations of taxation

and construction insurance as well as setting

procedures to facilitate operation of

contractors and delivery of construction

projects.

- Consider the establishment of a stock

exchange in the province to help capital

inflow in the construction companies to be

invested in the projects of the province.

- Review policies of state owned banks and

reduce the interest rates as is the case in the

neighboring countries and the Gulf countries

where the interest rate on loans for

investment purposes is only 2 percent .

- Encourage the establishment of private

banks and deregulate the association

process. Liberalize the lending policies to

create a status of competition to attract

clients in a manner to serve contractors to

get loans for the softest conditions and the

The National

Commission

of

Investment

The House of

Representati

ves

The Central

Bank of Iraq

Ministry of

Finance

Ministry of

Planning and

Development

Cooperation

Ministry of

Interior

Provincial

Council of

the Holy

Najaf

78

6. The private banks’ operation in the province is still

insufficient to fund investments. In addition, the

interest rates are high due to policies set by the Central

Bank of Iraq.

7. Insurance Companies’ operation in the province is still

inadequate; which adds another anti-investment factor

in the province.

8. The security risk is still a main reason for investments

to abstain from flowing into the province, especially

foreign investments.

lowest interest rates possible.

- Revisit the tax laws imposed on natural and

corporate bodies in order to achieve justice

of tax collection and tax rates for the several

groups of the community including

contractors.

- Promote the association of insurance

companies in order to provide protection for

credit given to contractors to secure safety

for their money and provide several with

insurance coverage to help create a

contractor friendly investment environment.

- Work on establishing security, order and the

rule of law in order to assure the investor

and motivate them to work and invest in the

province.

6. Administrative, Organizational, Technical and Supervisory Procedures


1- There is no clear plan for economic

activities in the province to be distributed

to sectors to help the contractor to identify

his role in building up the province.

2- Contractors and businessmen are not

involved in discussions of plans, laws,

bylaws, and decisions pertinent to the

economic activities in the province.

3- The prevailing administrative and

financial corruption in the departments of

the state incurs further financial burdens

for the contractor.

4- The long and complicated red tape which

- Have contractors and businessmen participate in

economic planning on the provincial level. This will

help identify their role in the annual or long term plan

of the province.

- There must be a transparent dealing in publishing the

comprehensive plan of the economic sectors in the

province so that everybody involved in the sector will

have an idea about their roles.

- Handling the problem of administrative and financial

corruption and reduce waste of public money to a

minimum by enforcing control mechanisms and

disseminate awareness and real citizenry

belongingness and loyalty to the country among the

Ministry of

Planning and

Development

Cooperation

Provincial

Council of the

Holy Najaf

Ministry of

Municipalities

The Holy Najaf

Municipality

Ministry of

Science and

79

moves slowly in terms of processing

applications by the relevant departments.

5- Authorities of the agencies are also

responsible for managing the contractors’

operation, which leaves the contractor a

victim of overlapping governmental

procedures.

6- There are no mechanisms to identify

standards and specifications for jobs and

contracts to help facilitate and prompt

construction work.

7- The low level of control on the

construction sector where several

projects are implemented by irrelevant

people.

8- Contractors do not believe in the

importance of economic feasibility

studies for projects.

9- The poor level of administrative and

technical skills of those responsible for

managing the construction projects. This

results in poor management of those

projects.

10- The Investment Commission has no

database for contractors.

civil servants and the private sector operators.

- Reduce redundant bureaucratic chains to reduce

routine and boring procedures.

- Designs for work must be implemented at the

governmental agencies responsible for contracts in the

province. Powers and responsibilities of each agency

must be identified to avoid overlapping authorities and

save contractors’ interests.

- There must be specific mechanisms to describe the

quality of works and set quantified standards mutually

agreed upon to secure smooth delivery of projects

promptly for the least effort and lowest cost.

- There must be agencies, including specialized people,

to control and monitor the construction projects in

order to secure just and fair dealing with contractors.

- Raise awareness of the importance of feasibility

studies for projects as well as scientific research as a

basis for developing contractors’ performance.

- Training and development programs must be provided

for contractors to improve their skills and

performance.

- The Investment Commission must establish a database

for contractors operating in the province.

Technology

Ministry of

Finance

The Integrity

Commission

The Central

Office for

Metrology and

Quality

Assurance

The Investment

Commission

Documents

Business Agenda of the Holy Najaf