EXECUTIVESUMMARY

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)

IntegrateBDZPolicieswith Development Strategy p gyforIraq q(1) ( )

IraqshoulddevelopBDZpoliciesthatcomplementtheNational DevelopmentStrategy(NDS) BDZpoliciesshouldincludesectorstrategiesthat:
1. 2 2. Assessstrengths,weaknessesandopportunitiesofIraqseconomy SupportnationaldevelopmentobjectivesasdefinedintheNDS and theInternationalCompactwithIraq GeneralMan Manufacturing, fa t rin TransportandLo Logistics isti s OilRefining,PetrochemicalandHeavyIndustry FinancialServices/CentralBusinessDistrict Information,ScienceandTechnology WideAreaSpecialAgriculturalEconomicZone MultiModalSeaTransportHubBDZatAlFaw MultiModalAirTransportHubBDZatBIAP
9

MajorsectorsforBDZsinIraqinclude:
1. 1 2. 3. 4. 5. 6. 7.

IntegrateBDZPolicieswith Development Strategy p gyforIraq q(2) ( )

CurrentBDZsinIraq:
1.
ExportProcessingZones(EPZs)(e.g.AlQaim,KhorAlZubair) supervisedbyGeneralCommissionforFreeZonesinMinistryof Finance IndustrialParkssupervisedbytheMinistryofIndustryandMinerals

2.

CurrentBDZsare:
1.
2. ClosertoconventionalmodelsofEPZsandmunicipalindustrial zonesthantocontemporaryconceptsofBDZs Infrastructurefacilitiesanddutyfreeenclavesratherthan developmentpolicyinstruments

10

IntegrateBDZPolicieswith Development Strategy p gyforIraq q(3) ( )

BDZsareeffectivebecausethey:
1. 2. Enablespecialinitiativestotargetparticularproblems Providesolutionsonamanageablescaleaccordingtolocal conditionsandcapacitiesratherthanattemptinglargescale solutions Provideenclavesofexcellenceorsecurityinotherwisedisruptive environments Identify brand, Identify, brand andpromotespecialinitiatives

3. 4 4.

However,thesestrengthsofBDZsreflecttheirfundamentalrisks:
1 1. BDZscanbeusedassurrogatedevelopmentplanstoavoid comprehensiveandthoroughpolicyframeworkswhichmaybe politicallychallenging BDZprojectscandevelopintoaplethoraofuncoordinated individualdevelopmentinitiatives
11

2.

TypicalIncentivesand FacilitiesPackage g forBDZsinIraq q(1) ( )

IndependentBDZAuthorityasregulatorandmunicipal/localauthority BDZOperatorasefficientprojectdeveloperandBDZmanager Reliable,highqualityphysicalinfrastructure Independentjudicialsystemanddisputeresolutionprocedures Efficientregistrationoflegalentities Lowornocustomsduties Efficientcustomsprocedures Taxincentives Relaxedlaborrules Norestrictionsonrepatriatingcurrency,profits,orcapital Guaranteeagainstseizureofassets Efficienttrademarkregistration
12

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

OftherecommendedBDZs,theWideAreaSpecialAgricultural EconomicZone showedthemostsignificantimprovementto competitiveness

BasedonCompetitivenessIndexderivedfromHeritageEconomicFreedom Freedom, WorldBankDoingBusiness,WorldEconomicForumCompetitiveness,and TransparencyInternationalIndexes
14

PriorityTypesofBDZsfor ConsiderationinIraq q(2) ( )

Studymethodologyincorporated:
1.
2. 3. 4. 5. 6. Structure(potentialtoaccelerategrowthofstrategicsectors) Function(contributingtosolutionofcrosscuttingissues) Policypriority(accordingtoNDS,InvestmentLaw,andICI) Regionalsurveyofconditions,resourceavailabilityandmarkets ProfessionalassessmentofemergingopportunitiesforIraq Locationcriteria

ShouldbeupdatedasNDSandSectorActionPlansarecompleted

15

GeneralManufacturing,Transport, andLogistics BDZBusinessModel(1) g ( )

ToincludestandardBDZincentivesandfacilities,withfollowing additions add t o stot the ep physical ys ca infrastructure: ast uctu e
1. Multimodaldryportincluding
a. truckcontainerterminus,truckparks,andmaintenance b. coldstores,reeferports,warehouses c. entreptfreezonearea,withbondedwarehousesforreexport d fastfreightcranesandtransferbetweenships d. ships,barges barges,aircraft aircraft,trucks trucks, railasappropriatefortheparticularBDZ

2. Secureandbondedcorridorstonearestairports,seaport,rail station 3. Industrialparkforgeneral/lightmanufacturing,engineering, maintenance 4. Hostelsfordrivers,familyhousingformigrantworkersin isolatedborderBDZs

16

GeneralManufacturing,Transport, andLogistics BDZBusinessModel(2) g ( )

ToincludestandardBDZincentivesandfacilities,withfollowing additionstoinstitutionalinfrastructure:
1. 2. 3. 4. TrainingandR&Dcenterstospecializeinlogistics,supplychain management Onsiteinternationaltransitandcustomsoffices Localbranchesofmanufacturers,transport,logisticstrade associations Professionalinstitutesofengineers,transport,logistics,export management

17

GeneralManufacturing,Transport, andLogistics BDZBusinessModel(3) g ( )

ParallelPoliciestoinclude:
1.
2. TransportSectorMasterPlan Tradepolicyreformsbasedoncostofprotectionanalysis

Businessmodelcustomizedtoparticularconditionsofindividual sitesaccordingtoTransportSectorMasterPlan

18

GeneralManufacturing,Transport, andLogistics BDZBusinessModel(4) g ( )

LocationsforManufacturing,TransportandLogisticsBDZs:
1.
2 2. 3. 4. 5. Strategicallysituatedonjunctionoftransportcorridorsfortransit trade Inwell I llpopulated l t dareawith ithnumeroustowns t and dvillages ill for f distributiontrade Landavailablefordevelopment Nearbordercrossingforinternationaltrade Securearea,borderingsecureareaofanothercountry,formingan enclave l

19

GeneralManufacturing,Transport, andLogistics BDZBusinessModel(5) g ( )

SequenceofdevelopmentofBDZsaccordingtopolicypriorities and dprevailing ili conditions diti PhaseddevelopmentofthetwotransporthubsatAlFawandBIAP g,Transport p andLogistics g withnationalnetworkofManufacturing, BDZs PendingTransportSectorMasterPlan,businessmodelishuband spoke k system t BasedonmultimodalhubsatAlFawandBIAPasgatewaystoIraq andwholeWestCentralAsiaRegion

20

GeneralManufacturing,Transport, andLogistics BDZBusinessModel(6) g ( )

HubsatAlFawandBIAPconnectedtonetworkofspokeManufacturing, Transport and T dLogistics L i i BDZs BDZ asdistribution di ib i centersonmain i transport corridorsspanningIraqandimportexportlinkstoneighboringcountries CouldbefundedandmanagedasPublicPrivatePartnerships(likeSaudi EconomicCities) Evenifallpotentialsitesarenotdeveloped,Manufacturing,Transportand LogisticsBDZsshouldbebasedonTransportSectorMasterPlan ScaleofeachManufacturing,TransportandLogisticsBDZdependsonlong termcomparativeadvantageoflocationastransportandlogisticshuboras p distributionspoke

21

OilRefining,Petrochemical,and Heavy yIndustry yBDZBusinessModel( (1) )

ToincludestandardBDZincentivesandfacilities,withfollowing additionstophysicalinfrastructure:
Sufficienthighwaycapacityandnumerousaccesspoints,togetherwith sufficientinternalroadnetworkforlargest18wheel,44tontrucks Accesstorailroad,withmodernfastfreighthandlingequipment Heavyindustryelectricitysuppliesatinternationallyattractiverates(US$ 0.06perKWH).Owngeneratingcapacityorconnectedtogridat100 MWlevel Oilandgaspipelinesforindustrialenergy,refining,petrochemicalraw materials,andalternativetoelectricityforheatingandindustrialovens Desalinatedwater Sanitaryandindustrialwastetreatment Socialservices yresidential Family Recreationalfacilities
22

OilRefining,Petrochemical,and Heavy yIndustry yBDZBusinessModel( (2) )

Sitesmayvaryinsizetoreflecttargetinvestors:
1. 1
2. 3. Very industrial V large l i d t i lsites it (typically (t i ll 10,000 10 000squaremeter t units) it )for f investorstodesignandbuildfactoriesandconnecttogeneralutilities Mediummanufacturingsites(typically510,000squaremeterunits) forcomponentandsupportindustries Transportandlogisticsareas,requiringlargelandareas,warehouses andcontainersstorage

23

OilRefining,Petrochemical,and Heavy yIndustry yBDZBusinessModel( (3) )

InstitutionalArchitecturetoincludelocalbranchesofOil, Chemicals, Engineering Industries Trade Associations, professional Ch i l E i i I d t i T d A i ti f i l InstitutesofEngineers yframeworkforoilrefining, g,heavy yindustry yand Policy petrochemicalsunderHydrocarbonLaw:
1. Setsouthowgovernmentandprivatesectorcontributetonational downstreamandenergyintensivedevelopment
2. AssistsBDZOperatorsinattractinginvestorsintheirsectors

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

FinancialServices/CentralBusiness DistrictBusinessModel( (2) )

ToincludestandardBDZincentivesandfacilities,withfollowing additionstotheinstitutionalinfrastructure:
1. 2. Officesofpillarsoffinancialservicessector(e.g.CentralBank,Stock Exchange,otherkeyexchanges(oilandgas),andlargecorporations) TradeAssociationsandProfessionalInstitutes(Instituteof Accountants,BarAssociation,BankersAssociation,Business Roundtable,ChamberofCommerce) BusinessandFinancialServiceRegulators(CentralBank,Securities Commission,FinancialServicesAuthority,FinancialOmbudsman) Financialandbusinessresearchcentersandconsultingorganizations Traininginstitutes(businessschool,finance,banking,accounting, insurance,marketing,advertising)

3. 4 4. 5.

26

Information,Science,and Technology gyBDZBusinessModel(1) ( )

ToincludestandardBDZincentivesandfacilities,withfollowing additionstothephysicalInfrastructure:
1. Fullyservicedhightechnologyfactorysites
2. Prebuiltshellfactoriesformanufacturing,researchormaintenance operations 3. Cleanareasdistantfromsmoke,dust,vibration 4. Purposebuiltscienceconferencecenter

27

Information,Science,and Technology gyBDZBusinessModel(2) ( )

ToincludestandardBDZincentivesandfacilities,withfollowing additionstotheinstitutionalinfrastructure:
1. Science,TechnologyandKnowledgeIndustriesTradeAssociations, andProfessionalInstitutesofEngineers,Scientists,Computer Sciences
2. Financialservicescluster(forventurecapitalfundsandother specialists) 3. Businessincubatorwithadvisoryservicesforfinancing,marketing, andcompanyadministrationandrosterofindependentdirectors 4. Multidisciplinaryappliedresearchinstitute(partofuniversityor smallerthinktank)

28

Information,Science,and Technology gyBDZBusinessModel(3) ( )

Specialincentives forhightechnologyindustries:
1.Taxprovisionstoextendyearstocarryforwardlossesandtransfer lossestootherprojectsinIraq 2. 3. Notaxonreinvestedprofitsforatleast10years ZerotaxonIraqiandworldwideincomederivedfrompatents, royalties,otherformsintellectualpropertyforbothnationaland g companies p foreign PersonalincometaxexemptionsforbothforeignandIraqiscienceand technologypersonnel TrademarkregistrationandintellectualpropertyprotectionwithBDZ dedicatedoffice Registration eg st at o o ofScientific Sc e t cNGOs GOsatBDZded dedicated catedNGO GOOffice O ceand a d registrationprocedure
29

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

WideAreaSpecialAgricultural EconomicZoneBusinessModel( (3) )

SpecialIncentives
1.
FreeZonestatus foragriculturalproductioncompanieslocated outsideSmallAreaBDZ

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

WideAreaSpecialAgricultural EconomicZoneBusinessModel( (4) )

ParallelPolicies
1.
2 2. 3. Reformbankingsectortoencouragecompetitioninbankingand agriculturalfinance C t master Create t plan l f forwater t management t Investinagriculturalinfrastructure,especiallyforirrigation, drainagesystems,andruralroads

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

MultimodalSea Transport (5) p HubBusinessModel( )

Twopotentiallocations:
1.
2. AlFaw DeepwaterplatformextensiontoAlFaw

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

Khoramshar Abadan Al Faw Kuwait

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

Iraqh I hasalready l d l lost30yearsand d couldbebypassedbynewglobal p unlessBDZstake development advantageofrestorationof securityasthisoccurs

44

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

CriteriaUsedtoSelect LocationsforBDZBusinessModels( (1) )

SomeBDZlocationspredeterminedbytheproject(HubSea PortatAlFaw, Faw HubAirportatBIAP) Siteselectionisacomplexprocess involvingassessmentof economic,financial,social,environmental,technological,and culturalfactors BDZsarepublicinvestmentprojects;therefore,needtoassess criteriabothtoadvancebestinterestsofBDZasaprojectand tomaximizepublicbenefits andminimizepubliccosts MostcriteriaforselectinglocationsforBDZsarerelatedtotype ofBDZ clearlydifferentfactorsforPilgrimageBDZandforOil RefiningBDZ

46

CriteriaUsedtoSelect LocationsforBDZBusinessModels( (2) )

However,basicessentialcommonfactors include:
1.
2. 3. Availabilityofgovernmentfreeholdland Safetyandsustainabilityoftheland Availabilityofextensivewaterresources

4. Mustalreadyhaveorbeclosetosupplyofeachessential utility(water,electricity,oil,gas,telecommunicationsconnections) 5. Dynamic,creativeandambitiouslocalpoliticalleadership,or stronganddynamiclocalprivatesectorleadership

6 Mustbeclosetoactualorpotentialtransportlinks 6.

47

CriteriaUsedtoSelect LocationsforBDZBusinessModels( (3) )

GeneralManufacturing,Transport,andLogisticsBDZ:
1. 2. 3.
Junctionorcriticalsiteoftransportcorridor Atleastonemajortransportmodeonlocation Closetolargepopulation

48

CriteriaUsedtoSelect LocationsforBDZBusinessModels( (4) )

OilRefining,Petrochemicals,HeavyIndustryBDZs:
1. areaof land 1 Large L favailable il bl l d
2. Distantfromareasofdensepopulation(duetopollution/ explosionrisk) 3. Easyaccesstorawmaterials 4. Directaccesstotransportfacilities 5 Accesstolargescalewastedisposalfacilities 5. 6. Closetoestablishedengineeringindustryclusterwithwide rangeofengineeringindustriesandservicestoprovidesupport 7. Closetoskilled,technicalandmanageriallaborresourcesatalllevels 8. ProximitytoestablisheduniversitywithR&Dfacilitiesand specializationinscienceandpetroleumengineering 9. Proximitytoemergencyservicesincaseofaccidents
49

CriteriaUsedtoSelect LocationsforBDZBusinessModels( (5) )

FinancialServicesBDZs/CentralBusinessDistrict:
1. 1 2. 3. 4 4. 5. 6. 7. 8. Located L t din i national ti lorregional i lcapital it lwith ithestablished t bli h d commercialtradition Closetoestablishedclusterofbusinessprofessionals(banks,lawyers, accountants,ITcompanies) Closetoestablisheduniversitywithgraduatebusinessschoolor advancedmanagementschoolandresearchcapacities Extensive E i sourcesof fhigh hi hquality li professional, f i l sub bprofessional f i land d clericalstaff Easylinkstointernationalairport Highqualitysocialenvironmentwithgoodresidential,cultural, recreation,restaurantsandhotelfacilities g standardsofsecurity y High Goodcommunitytransportsystemtoenablestafftocommutetowork reliably 50

CriteriaUsedtoSelect LocationsforBDZBusinessModels( (6) )

Information,ScienceandTechnologyBDZ(SciencePark):
1.
2. 3. 4. 5. 6. Closetolargesciencefocuseduniversity Closetoaclusterofresearchdepartmentsorheadofficesofhigh technologycompaniesandrelevantgovernmentdepartments Closetosourcesofhighqualityprofessional,subprofessionaland clericalstaff Easylinkstointernationalairport Cleanenvironment,unaffectedbypollutionandvibration Highstandardsofsocialenvironmentwithgoodfamilyresidential, cultural,recreation,restaurants,andhotelfacilities

51

CriteriaUsedtoSelect LocationsforBDZBusinessModels( (8) )

WideAreaSpecialAgriculturalEconomicZone
1. 2. 3. 4. 5 5. 6. . 7. 8. Goodagriculturalland Securelongtermwatersupplies Farmingpopulationwithstrongagriculturalculture Networkoffarmingtradeintermediariesandtraders Establishedtransportlinks(goodhighwayorrailway)toexportproduce Establishednetworkofruralroads Su c e cyof Sufficiency o physical p ys ca infrastructure ast uctu esuch suc that t atgrowth g o t willnot otbe constrainedbyinfrastructureproblemswhenreformsstimulategrowth Committedandwellinformedpoliticalleadership

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