Iraq's biggest banks have claimed security concerns in the country are exaggerated, imploring international investors to participate in the $1 trillion rebuilding effort.
Central Bank of Iraq governor Abdul Bassit Turki Saeed said the return on investment in the still turbulent country far outweighed the risks.
“If I was an foreign investor, for example, if I compare what I would gain and the [risks] of it, definitely I would be in Iraq since yesterday," he said through a translator on the sidelines of the Iraq Finance 2014 conference in Dubai.
“If we did have active economic [growth] in Iraq, this definitely would bring security because it would create chances and develop some ambitious visions.”
Chairwoman and CEO of the largest bank in Iraq, the Trade Bank of Iraq (TBI), Hamdiyah Al Jaff, said the ongoing conflict was misunderstood and did not affect the new development.
She called on international banks and investors to participate in the country’s huge infrastructure projects.
"We should all be inside Iraq without any fear or hesitation because the market of Iraq needs you as much as you need opportunities,” she said.
"We do not want to carry on these concerns regarding the security in Iraq because it's not as it is shown in the media. The media exaggerate in presenting the Iraq security situation.
"It's not excellent, however it's completely different from difficulties we faced from 2000-2009."
The comments come despite renewed sectarian violence in recent months. On Sunday, authorities said car bombings and shootings killed nine people across Iraq, while militants kidnapped soldiers in the embattled province of Anbar, where Al Qaeda-linked fighters hold portions of two major cities.
Meanwhile the country is attempting to rebuild infrastructure destroyed during three decades of conflict, including electricity supply, sewerage, health and education facilities, roads and 3 million homes.
The government last year approved a $1 trillion infrastructure spending program over the next 10 years.
It is relying on financing from a doubling of oil output, the privatisation of public assets including three banks and foreign direct investment.
Al Jaff said international banks were setting up in Iraq but they had made little input to the country's restructure.
"We have very strong relations with big banking institutions in the world, however, frankly speaking, we haven't seen, so far, any serious interest by those banks to support building Iraq," she said.
"The Trade Bank of Iraq is a government bank and the guarantees it presents can be considered as government guarantees and we're ready to support financing infrastructure projects.
"We will work together to eliminate obstacles to stability which is really creating a win-win situation for all of us."
Country manager of a leading private bank, Byblos Bank, Jean Bassil, said while he agreed the security situation was not a major concern, there were still numerous reforms needed to strengthen the country's banking sector and reduce risk for both banks and customers.
He called for a credit bureau, similar to the one being established in the UAE, so banks could have greater confidence in lending, while building trust in the sector for potential customers.
“There is much work to be done to develop the banking sector in Iraq. What really interests us as a private bank in Iraq ... is the information we can exchange through the Central Bank in terms of risk management, so we can realise any financial deal that comes to our door,” Bassil told Arabian Business.
“This is being developed and we hope to see this up and running in 2014.”
For Bassil, who is Lebanese, operating amid a reasonable possibility of further attacks in the country was part of doing business in Iraq.
“This is becoming the daily situation for us,” he said.
“There is a risk of course, it’s a high risk, but we are managing it.
“It’s not as bad as the media portrays it. Once you know how to go by, it’s okay.”For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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