On Saturday, September 8, the AUIS Entrepreneurship Initiative (AEI) hosted the Dutch Consul General in Erbil Willem Cosijn; Second Secretary of the Embassy of the Netherlands in Baghdad Martijn Groen; Senior Policy Officer of the Department of Sustainable Economic Development, Nathalie Gonçalves Aurélio; Policy Officer of Netherlands Enterprise Agency, Sabrina Waltmans; and Policy Officer of the Netherlands Consulate General, Aram Abdallah for a discussion on entrepreneurship, innovation, and private sector growth in Iraq and the Kurdistan Region of Iraq. Participants included entrepreneurs, investors, and private sector advocates from Asia Hawala, Kurdistan Economic Development Organization, Five One Labs, Mercy Corps, Zain Iraq, and various local startups.
The conversation started with a question posed by Pat Cline, Director of the Entrepreneurship Initiative, about what is needed to sustain economic growth in the KRI and Iraq and how different institutions, including the government, academia, and private sector can contribute to growth. With specific regard to agriculture--a focus area of the Dutch Private Sector Development plan for Iraq--Daban Najmadeen, a representative from the Sulaimani Chamber of Commerce, commented on potential growth areas in the cultivation and export of Kurdish agricultural goods such as wheat, nuts, and pomegranates. He noted that the Chamber of Commerce has made efforts to contract international companies to develop the sector.
Ava Nadir, a representative from Zain Iraq, countered that while exports are important, there should also be efforts to have a sustainable domestic market, particularly in regard to food production. For example, despite the potential for trade between northern and southern Iraq, given the pomegranates in the KRI and fishing industry in Basra, there have been few efforts to promote intra-Iraq trade. In addition to the lack of investment in domestic production, there are a number of financial and bureaucratic barriers that deter innovation in agriculture, as well as entrepreneurship and small business growth as a whole.
The weakness of the banking sector deters both domestic and foreign investment, and the procedures for establishing a business are extremely lengthy and unclear. The registration process in particular requires multiple signatures from different ministries, and can be quite time intensive and expensive for entrepreneurs. According to Hussam Barznji of Kurdistan Economic Development Organization, there needs to be a centralized government agency or mechanism by which potential business owners can efficiently register businesses. Such a mechanism would increase the transparency and accountability of bureaucratic institutions and reduce the time needed to establish a business.
Furthermore, the discussion focused on the myriad of legal difficulties that exist beyond the weak banking system and difficulties of registration procedures. The system by which copyrights are enforced and intellectual property protected is weak and in many cases, nonexistent--a reality that contributes to a general lack of trust in forming business partnerships and bringing ideas to market. The discussion led to a further exploration of the many failures of the legal system to protect consumer rights in the buying of goods and food quality in the supply chain. The participants determined that in addition to legal reform in the registration process, there is a need for additional reforms to protect consumers and the quality of agricultural goods.
The discussion ultimately concluded with an assessment similar to that of previous discussions: that entrepreneurs willing to not only take the risk of difficult registration procedures and a poor legal framework, but also push for bureaucratic change at the local government level, are likely to drive positive change in Iraq’s entrepreneurship ecosystem.