Iraq Moving To Permit Foreign Land Ownership - PM

LONDON (Dow Jones)--The Iraqi government is taking fresh action to attract badly needed foreign investment, including moving toward allowing foreigners to own land, Prime Minister Nouri al-Maliki said Thursday. 

The Iraqi economy has been hit by falling oil revenue and the global recession.
"We need more than at any other time in the past a vibrant private sector and we (the government) will see to it that all obstacles are removed for the private sector," al-Maliki told an investment conference here. 

Speaking through an interpreter, al-Maliki announced that his government is working to amend Iraqi law to allow foreign investors to own land in the country. The move would have to gain parliamentary approval. Currently, foreign investors are permitted to lease property for up to 50 years. 

Al-Maliki and several members of his cabinet, including his oil minister, have come to the U.K. capital for a two-day gathering billed as the biggest Iraqi investment conference outside the country since the end of the US.-led war in 2003. 

But the event comes at a delicate time for the Iraqi government. Weak oil prices and falling crude production and exports - caused by maintenance and issues - have forced the government to slash its 2009 budget a number of times in recent months. 

The insurgency continues to show resiliency, a reminder of the dangers for businesses operating in Iraq. In the past week, around 200 people have been killed by suicide bombings. Northern Iraq, a region that has enjoyed relative security and economic prosperity compared with the rest of Iraq, has seen a rise in militant violence in recent months in Mosul and Kirkuk, an oil-rich area province hotly disputed by Kurds, Turkomen, and Arab residents. 

The country also faces skilled labor shortages as thousands of Iraqis that left the country in past years have yet to return for security reasons. A reliable power supply and other infrastructure are also still just slowly being rebuilt since the war. 

Despite the recent uptick in violence in Iraq, the U.K. government announced Thursday it was in the process of reviewing its advice to U.K. nationals not to travel to Iraq. A downgrade or removal of the government's travel advice could move insurance companies to charge lower rates for companies sending employees to Iraq.
The U.K. and Iraqi governments Thursday signed a memorandum of understanding to work more closely in several economic areas. 

U.K. Secretary of State for Business Enterprise and Regulatory Reform Peter Mandelson said the agreement would entail U.K. and Iraqi companies cooperating in 12 areas, including energy and financial services.