Professional Documents
Culture Documents
FEASIBILITYSTUDYOFBUSINESSDEVELOPMENT ZONESINIRAQ
NOVEMBER2009
BusinessDevelopmentZonesinIraq
ExecutiveSummaryPresentation: AcomprehensiveandmultipartFeasibility StudyconcerningBusinessDevelopmentZonesinIraqhasbeencompleted.The Studyaddressesfourmajorareasandthisslidepresentationisanexecutive summaryforreadersoftheStudy. TheFeasibilityStudycoversFourParts: 1 BackgroundDescription 1. 2. OverviewofNationalZoneProgramsandSelectedZones 3. Legal,RegulatoryandTaxReview 4. BusinessDevelopmentZonesforPostConflictEconomicDevelopment inIraq ThisexecutivesummaryisnotmeantasasubstituteforreadingtheStudyinits entirety;itprovidesanintroductionandguideforinterestedreaders,aquick reference anddiscussionaidtothecompleteStudy reference, Study.PartFouroftheFeasibility Study,whichisthefocusofthisexecutivesummarycoverssevensections regardingBusinessDevelopmentZones(BDZs):Introduction,RoleofBDZs,Iraqi EconomicSectors,PotentialTypesofBDZs,ProfilesofBusinessModels, Competitiveness,andLocationSpecificBDZs. Pleaserefertothefinalslidefordetailsonthecontractingpartyforthe FeasibilityStudy.
KeyThemesofReport(1)
TheconventionalconceptofBusinessDevelopmentZones(BDZs):
1.
2. 3. 4. 5. 6. 7. Small Geographicallydefined ExportProcessingZones TaxandDutyFreeZones Utilizingcheaplabor Offeringpreferentialtradestatus Benefitingfromtradepreferences
ThousandsofBDZsinover100countriescoverabroadrangeof innovativenewBDZconcepts
3
KeyThemesofReport(2)
NewconceptsofBDZemphasize:
1. 1
2. 3 3. 4. 5. 6. Combination C bi ti of finvestment i t tincentives i ti Physicalinfrastructure Policyreforms Hasslefreeadministration Effectiveregulation Rangeofsizestofitpolicyobjectives
BDZsarepragmaticpolicyinstruments:
1.
2. Toimplementeconomic,socialandinfrastructuredevelopment Toovercomeparticularconstraints
ContemporaryConceptsofBDZs(1)
ConventionalconceptofBDZsnowobsolete:
1. (EPZ) a 1 The Th conventional ti lconcept tis i anExport E tProcessing P i Zone Z well ll definedgeographicalarea,enjoyingcustomsprivilegesandother incentives,inwhichtheprimaryactivityisprocessingofgoodsfor export (UNCTAD) 2. Secondbestsolutioncomparedtoreformofwholecountryseconomy 3. Evolvedfrompracticalnecessityratherthaneconomicpolicy
ContemporaryBDZs:
1. arepragmaticandflexiblepolicyinstruments 2. promoteprivatesectorinvestment,generateemployment,overcome constraints 3. introduceessentialpolicyreforms 4. aretoolsfordevelopmentinitiatives
5
ContemporaryConceptsofBDZs(2)
GDPgrowthratesupto10%(ChinaWideAreaZones)to28%(Sri Lanka L k and dMalaysia M l i Small S llArea A Zones) Z ) ChangecanbeimplementedthroughBDZswhenpoliticalrealities constrainreformsthroughout g thewholecountry y
TypesofBDZ
BDZsvaryenormously:
1.
2 2. 3. 4 4. 5. ConventionalExportProcessingZone(EPZ)(e.g.,ColonFreeZone inPanama) Singlevault(AntwerpDiamondZone) Singleregulation(NewYorkInsuranceZone) Largeindustrialcities(e (e.g., g JubailinSaudiArabia) Wholeregionswithmillionsofpeople(e.g.,ShenzenandHainan inChina)
FiveBasicTypesofBDZ
FivebasictypesofBDZs:
1.
2. 3. 4. 5 5. ConventionalSmallAreaZone(Turkishcoastalzones,JebelAli) WideAreaZone(Chinesespecialeconomiczones,Aqaba,Saudi NewEconomicCities) IndustrySpecificZone(e.g.,garments,oilrefining,electronics, medical) PerformanceSpecificZone(e.g.,export,valuechain,policy reform,businessincubators) HybridZones(e (e.g., g electronics&jewelry jewelry,transport& manufacturing)
MajorsectorsforBDZsinIraqinclude:
1. 1 2. 3. 4. 5. 6. 7.
2.
CurrentBDZsare:
1.
2. ClosertoconventionalmodelsofEPZsandmunicipalindustrial zonesthantocontemporaryconceptsofBDZs Infrastructurefacilitiesanddutyfreeenclavesratherthan developmentpolicyinstruments
10
3. 4 4.
However,thesestrengthsofBDZsreflecttheirfundamentalrisks:
1 1. BDZscanbeusedassurrogatedevelopmentplanstoavoid comprehensiveandthoroughpolicyframeworkswhichmaybe politicallychallenging BDZprojectscandevelopintoaplethoraofuncoordinated individualdevelopmentinitiatives
11
2.
TypicalIncentivesand FacilitiesPackageforBDZsinIraq(2)
Searchablebusinessandintellectualpropertyregistries Abilitytouseinternationalaccountingstandardsandissuefinancialreports inforeigncurrency Stateoftheartinformationtechnologyandtelecommunications Vocationaltraininginstitute,withhumanresourcerecruitmentsystem (shelterplan) Institutionalarchitecture rangeofprofessionalinstitutionsandbusiness associations Clusteroftechnicalandsupportservices(e.g.qualityandproductivity center,businessincubator,technicalextensionservices,specialized companies i f forquality lit standards t d d and dt testing, ti R&Dcenter t f focused don particularindustryoftheBDZ) Positivepolicyenvironment,withparallelpoliciesintegratedwithsectoral actionplansforgrowth PurchaseorgrantoffreeholdlandinBDZ(formajorinvestors)
13
PriorityTypesofBDZsfor ConsiderationinIraq(1)
RecommendedtypesofBDZare:
1. 1 General G lManufacturing, M f t i Transport T tand dLogistics L i ti BDZs BDZ
2. OilRefining,PetrochemicalsandHeavyIndustryBDZs 3. FinancialServices/CentralBusinessDistrict 4. Information,ScienceandTechnologyBDZs 5. WideAreaSpecialAgriculturalEconomicZone 6. MultiModalSeaTransportHub 7. MultiModalAirTransportHub
ShouldbeupdatedasNDSandSectorActionPlansarecompleted
15
17
Businessmodelcustomizedtoparticularconditionsofindividual sitesaccordingtoTransportSectorMasterPlan
18
19
20
21
23
Parallelpolicies:
1. Removerestrictionsinnationalandinternationaltrade
2 2. D l clear Develop l transportpolicies li i
24
FinancialServices/CentralBusiness DistrictBusinessModel(1) ( )
ToincludestandardBDZincentivesandfacilities,withfollowing additions dditi to t the th physical h i linfrastructure i f t t
1.
Highqualityurbaninfrastructureprovidedbymunicipality(e.g. streets)orBDZOperator(e.g.upmarketofficespace,hotels, conventioncenter) Efficientlogisticsincludingaccesstomasstransitsystems,rail, highway, g y,airport p andlimitedwarehousefacilities Congenialsocialenvironmentforworkersandresidents,including forfamiliesofnationalandinternationalexecutives
2. 3.
25
3. 4 4. 5.
26
27
28
4. 5. 6.
WideAreaSpecialAgricultural EconomicZoneBusinessModel(1) ( )
ToincludestandardBDZincentivesandfacilities,withthe following f ll i particular ti l additions dditi to t the th physical h i linfrastructure: i f t t
1.
SmallAreaZonewithintheWideAreaSpecialAgricultural EconomicZonewithfullyservicedindustrial/commercialsitesopen toalltypesofagroprocessing,packaging,chemicals, additives/ingredients,agroengineeringandtechnicalservices companies
30
WideAreaSpecialAgricultural EconomicZoneBusinessModel(2) ( )
ToincludestandardBDZincentivesandfacilities,withthe followingparticularadditionstotheinstitutionalinfrastructure:
1.
2. 3. 4 4. 5. AgriculturalIndustryAssociations,coveringfarmers,manufacturers, andtraders Professionalassociationsforagriculturalandenvironmental scientistsandtechnologists Environmentalandwaterregulatoryagencieswithcontrolsover rateofuse SpecialfinancialservicesunitinSmallAreaZoneforcommercial banksandAgriculturalCooperativeBank Agriculturalappliedresearchanddevelopmentcenter
31
Policy P li Environment E i t
1.
IntroductionoflegalreformsinWideAreaSpecialAgricultural EconomicZoneincludingfreeholdlandownershiprightsandrights topurchaseStatelandsofarmerscanuselandascollateralfor loans Strategic g p planfordevelopment p ofagricultural g sector(p (production andagribusiness) Reformofagriculturaltradepolicytoeliminatetraderestrictions
2. 3.
32
33
MultimodalSea TransportHubBusinessModel(1)
Strategicpurposes:
1.
2 2. ToprovidedeepwatersuperportforUltralargeContainerShips (ULCSs)asgatewayforWestCentralAsia T expand To dexisting i ti port tcapacity: it a. UmQasrporthasonly13meterdraftandcouldnothandlenew ULCSs 3. Toreduceimportcosts: a. UNDPestimatesIraqsavesUSD500foreachTwentyfoot Equivalent i l Unit U i (TEU) ( U)imported i dthrough h hIraqi I iportrather h than h overland
34
MultimodalSea TransportHubBusinessModel(2)
Strategicpurposes(cont.):
1. Topromotesuperportashubfortransportandlogisticsnetwork
a. Iraqcurrentlyimports7TEUsper1,000population b Kuwait b. K i i imports92TEU TEUsper1 1,000 000 c. Jordanimports25TEUsper1,000 d IfIraq d. I i imported t d25TEU TEUsper1 1,000 000(th (thesameasJ Jordan), d ) itwould ld importmorethan800,000TEUsperyear e. Atthatlevel,IraqcouldsaveUSD200millionperyearbyimporting throughitsownportinsteadofoverland f. Iraqshouldplanfor5millionTEUsperyear,growingtoasub continentalentrepthandling25millionTEUsperyear g. CompareDubaiwhichhandles8millionTEUsperyearandplansfor55 millionTEUsperyearby2030 35
MultimodalSea TransportHubBusinessModel(3)
ToincludestandardBDZincentivesandfacilities,withthe following f ll i particular ti l additions dditi of fincentives i ti and dfacilities f iliti packages:
Physicalinfrastructure Deepwaterport minimum 17meters,better19meters, best21meters Largescalecontainersea terminal,minimum20berths LandsidepostPanamaxgantry cranesforseaportandrail head Largescalecontainer dryporttointegratesea, road,rail,andairtransit movements
Physical Infrastructure (cont) Land links: rail to Basrah, road to trunk highways, bonded road/rail link to Basrah airport Satellite dryport and Free Z Zone at t Basrah B h airport i t Logistics and transport park with Free Zone status Industrial Park with Free Zone status t t for f general l manufacturing, engineering, light assembly Expansion of Al Faw town as new city
36
MultimodalSea TransportHubBusinessModel(4)
ToincludestandardBDZincentivesandfacilities,withthe followingparticularadditionsofincentivesandfacilities packages:
Legal/tax g incentives BDZAuthorityas MunicipalityandWideArea ZoneAdministrator Independentjudicialsystem/ disputeresolutionfor maritimeandtransportlaw Institutionalinfrastructure f /Policyenvironment Parallelpoliciesofnational transportMasterPlan,trade policies BDZstrategy policies, Venturecapitalfundsand banksspecializinginshipping, transportandlogistics companies MarineTradeAssociations andProfessionalInstitutes
37
Threephasedevelopment:
1.
2. 3. ShorttermgoaltobuildportfacilitiestosupplementUmQasrport Createhubportaskeylinkinstrategicnational/regionaltransport andlogisticsnetwork UpgradesuperportfornewgenerationULCSstoservicewhole WestCentralAsiaregion
ConsiderNeutralZonestatustoservewholeregion:
1.
ComparetoexistingoilNeutralZonesinGulfRegion
38
MultimodalAir TransportHubBusinessModel(1)
StrategicPurposes:
1. 1
2. 3. Gatewayforexternalairtransportlinks Combinesair,road,rail,telecommunications p support pp services(cold ( stores,maintenance Fulltransport engineering,dispatchyards)toactashubforIraqtransportand logisticsnetwork
Istanbul and to Europe Malatya Kars Baku and to China
Eskenderan
Latakiya
Beirut
39
MultimodalAir TransportHubBusinessModel(2)
LocatedatBaghdadInternationalAirport:
1.
2. 3. 4. Directaccesstohighwaysystem Extensiveunderusedland Scopetoreturntofullinternationaloperationswhennormal securityconditionsprevail Baghdad g isworldscalecity, y ,mainfinancialandbusinesscenterof Iraqwithagriculture,industry,retail,construction,capitalcityand conurbationof7millionpeople Baghdadisalreadyanationalandinternationalrailhub, connectinganorthsouthrailcorridor withtwoeastwest corridors,andnationalandinternationalhighwayhub However BIAPhasnoexistingrailspur However,
40
5.
6 6.
MultimodalAir TransportHubBusinessModel(3)
ToincludestandardBDZincentivesandfacilities,withthe followingparticularadditionsofincentivesandfacilities packages:
Physical y infrastructure f Multimodaldryportwith logistics/transportpark, reeferports,bonded warehouses andfastfreight warehouses, transferfacilities Directlinkstorailroadand highwaynetworks Operational p structures LinktoTransportand LogisticsCitybusinesspark inAbuGhraibPalacearea Trainingandproductivity centerfortransport, logistics,andsupplychain management
41
MultimodalAir TransportHubBusinessModel(4)
ToincludestandardBDZincentivesandfacilities,withthe followingparticularadditionsofincentivesandfacilities packages:
Legal/taxincentives
Internationaltransitandcustoms offices EfficientBDZAuthorityandBDZ Operator Parallelpoliciesofnational transportMasterPlan,trade policies,BDZstrategy
Institutionalarchitecture/Policy environment i Institutionalarchitecturetoinclude transportandlogisticsindustries tradeassociations Professional P f i ltransporti institutes i andaviationassociations Airportdevelopmentthrough contractingorPPPmodels(under transportSectorMasterPlan OpenSkiespolicytoencourage privateorstateownedairlines
42
ActionStepsforImplementationofBDZs(1)
AdoptBDZPolicy aspartofNationalDevelopmentStrategy to avoid iduncoordinated di t dindividual i di id ldevelopment d l tinitiatives i iti ti BDZPolicy toimplementthestrategiesinNationalDevelopment StrategyandInternationalCompact PassEnablingLegislationinordertograntexecutivebranchof governmenttheauthority g ytoestablishBDZsanddeterminetheir legal,regulatory,andtaxframeworkwithsignificant independencefromcentralgovernment Adoptsectormasterplansandpassrelevantlegislation(e.g. hydrocarbonlaw)
43
ActionStepsforImplementationofBDZs(2)
PassEnablingDirectives forBDZs inordertoestablishdetailed provisionsforregulationandoperationofBDZs PromoteBDZdevelopmentopportunitiestoencourageprivate sectorinvestmentinestablishmentofBDZs
ActionStepsforImplementationofBDZs(3)
Certainstrategicdecisionsarerequiredquickly inordertotake advantage forI Iraq.For d t of fmajor j opportunities t iti f F example: l 1. OpeningupofWestCentralAsia
2 2. 3. 4 4. 5. N E New Eurasia i l land dbridge b id transport t troutes t Newtransporttechnologies EconomicgrowthintheMiddleEast BIAPsstatusashubairport
45
46
6 Mustbeclosetoactualorpotentialtransportlinks 6.
47
48
51
52
AppreciationForTheirContributions
Wewouldliketoacknowledgethefollowingindividualsfortheir valuablecontributionstothissummarydocument.
PaulSavello,USEmbassy,IraqTransitionAssistanceOffice,Ph.D.,JD AlexRiemer,USEmbassy,OfficeofPrivateSectorDevelopment,Consultant Captain p Siegfried g T.Ramil,USArmy yOperations p Officer
55
FeasibilityStudyandSummary
TRChascompletedcomprehensiveFeasibilityStudycalledBusiness Development Zones in The with D l Z i Iraq. I Th Study, S d along l i hthe h eight i h appendices, di wasundertakentoprovidethoseactivelyinvolvedineconomic developmentinitiativesinIraqwithdetailedinformation,analysis,and perspectiveinthisarea area.ThematerialpresentedintheStudymay contributetothebasisoffocused,effectivelysupportedandcoordinated developmentactivities,andfurtherpolicyinitiativesforthisimportant toolinbuildingtheIraqieconomy.
TRC
Feasibility F ibilit St Study d and dE Executive ti S Summary P Presentation t ti prepared by TRC Limited bdz@trc-international.com
56
FurtherInformation
yStudy yofBusinessDevelopment p qwas TheFourPartFeasibility ZonesInIraq contractedthroughtheOfficeofPrivateSectorDevelopment,Strategic Investment,andHousingoftheUSEmbassy;Baghdad,Iraq.Inquiriesmay bemadetothefollowingcontact:
JuneReed,SeniorAdvisor,USEmbassy;Baghdad,Iraq OfficeofPrivateSectorDevelopment, Development StrategicInvestment Investment,andHousing reedjr@state.gov 0770.443.0240
57