Abstract
In Iraq there were a number of moves towards a more secure long-term future.
Iraq’s government gave its
approval to a new security pact with the
USA, which provides for the departure of all US troops from Iraq
by the
end of 2011. US troops should be withdrawn from major cities by the middle of
2009. However,
bombings continued, with 30 people killed in two incidents
in October and 26 in multiple incidents in
mid-November. Overall, Iraq is
likely to remain a transition state encumbered with relatively high levels
of violence at least into the medium term, if not longer. Nevertheless, it is
making progress towards
becoming a ' normal' country and as such we have
revised its political risk ratings upwards.
In the past quarter
Iraq’s defence industry has not grown appreciably. BMI predicts that it
will be a
decade or so before the country’s indigenous defence
industry is fully established. Until then, Iraq will be
dependant on
donations from other countries, such as the US, for its arms. The largest
player in the native
Iraq defence industry is the Dabin Group, a
commercial consortium primarily involved in the
construction of hotels,
retail and leisure facilities. The Dabin Group holds a 42% stake in
Seabird
Aviation Jordan, specializing in both civilian and defence
aerospace projects.
We expect Iraq' s economy to expand robustly over the
coming years, on the back of increasing oil
production and strong growth
in the non-oil sector. We have pencilled in real GDP growth of 8.0% in
2008, 7.8% in 2009, and over 2009-13 we expect growth to average 7.4%. The
foundations for our
sanguine view lie primarily with the much improved
security situation, the prospects for significant
investment into the oil
industry over the coming years, and the continued post-war reconstruction of
the
country.
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