2023-09-11 22:08:13
Foreign Minister Alexander Schallenberg (ÖVP) arrived in the Iraqi capital Baghdad on Monday evening, where he will meet with President Abdul Latif Rashid, Prime Minister Mohammed Shia’ al-Sudani and Foreign Minister Fuad Hussein on Tuesday. “We want to open a new chapter in relations,” said Schallenberg to the Austrian media on his journey via Doha. The aim is “cooperation on an equal footing in the areas of economy and security”.
Iraq has a “hinge function” in the region in this regard, the Foreign Minister emphasized, making it a particularly important partner. Since there is now an embassy in Baghdad again, a new level is being reached. The Austrian representation, which was closed in 1991, has been operational again for almost a year. For security reasons she is staying in the “Hotel Babylon Rotana”. The official reopening will take place on Tuesday.
A readmission agreement has already been signed, Schallenberg recalled the initial results of the strengthened bilateral relations in the area of illegal migration. This means that the number of returns to Iraq has increased almost “twenty-fold,” the Foreign Minister calculated, in order to put the information into perspective somewhat. The number of returns increased from one person (“or two”) to 18. According to Schallenberg, a “memorandum of understanding” in the area of police cooperation will also be signed during the visit to Baghdad.
In principle, the Foreign Minister identified a “positive development” in Iraq. He had already visited Baghdad and Erbil, the capital of the Autonomous Region of Kurdistan in northern Iraq, in 2011 and 2015 with his predecessors Michael Spindelegger and Sebastian Kurz (both also ÖVP). The security situation was completely different back then, Schallenberg remembered. “The country has stabilized.”
Iraq was conquered by US troops in 2003, who overthrew then-ruler Saddam Hussein. After the withdrawal of American troops in 2011, the jihadist terrorist organization “Islamic State” (IS) took advantage of the military power vacuum. At the government’s request, there was renewed American intervention. In cooperation with partner countries, IS was able to be put in its place by 2017.
“We have an interest in a stable and united Iraq,” emphasized the Foreign Minister. In recent years, the central government has also become more powerful. This can also be seen in the relationship between Baghdad and Erbil. It was unthinkable a few years ago that the oil revenues from Kurdish autonomy would now flow “transparently” through the central government.
Schallenberg analyzed that a solid government in Baghdad is also important in order to become more resistant to external influences. “It is a state that is being pulled and tugged at,” he outlined the situation, “from Iran and Turkey.” Iran’s attempt to exert influence is also viewed critically in the USA. But if the state remains stable, there should be fewer incentives for “young Iraqis to leave the country” in the future, concluded Schallenberg. There is currently a considerable “brain drain” to cope with.
Iraq also receives development aid from Austria, the minister reminded. In the future there should be, above all, broader economic cooperation. From 2012 to 2022, Austria provided Iraq with almost 20 million euros, and in 2023 the contribution amounted to 1.5 million euros. Since 2017, however, the number of people in the country who are dependent on humanitarian aid has fallen from eleven to 2.5 million. But there are 1.1 million children among them.
Twenty years after the US invasion, life in Iraq has returned to some degree of normality, but interconnected problems such as political instability, poverty and corruption remain. It is estimated that the state has lost at least $350 billion in revenue due to widespread corruption since 2003, according to a report by the Chamber of Commerce (WKO).
The most important economic factor is the oil sector, which, according to the WKO, accounts for around 95 percent of government revenue and 98 percent of exports. This makes Iraq the third largest oil exporter in the world behind Venezuela and Saudi Arabia and the second largest among the OPEC countries. The energy crisis in connection with the Russian war of aggression against Ukraine led to a further increase in oil exports last year. However, fluctuating oil prices also caused economic problems and social consequences.
In any case, Schallenberg identified great potential for economic cooperation. He was also accompanied by a business delegation made up of ten companies. They should present their projects at the meeting with Prime Minister Mohammed Shia’ al-Sudani.
Schallenberg calculated that major projects with a total volume of $400 billion could be implemented in Iraq in the coming years. Austrian companies should also be able to benefit from this, for example in the areas of health, telecommunications or the construction of transport routes, said Schallenberg. Schallenberg stated that local companies have a good reputation in the region. “They go through difficult times and stay.”
A bilateral economic forum is planned in Erbil on Wednesday, as the oil-rich Kurdistan-Iraq region is of great interest as a trading partner. According to the Chamber of Commerce (WKO), trade relations with Austria have recently grown. The oil company OMV has been active in the Iraqi Kurdish region since 2007, in the Bina Bawi, Shorish and Mala Omar exploration blocks as well as through a stake in the Pearl Petroleum Company Limited (PPCLD). The airline Austrian (AUA) is also present locally and offers direct flights between Vienna and Erbil.
According to the WKO, taking into account the security situation, opportunities for Austrian companies exist primarily in the areas of infrastructure, energy, agriculture (irrigation), construction (housing) and the health sector. There are also opportunities in the consumer goods (food and beverage) and pharmaceutical goods sectors.
However, climate change is also making itself felt in Iraq. At the end of September 2022, around 3,000 families had to leave their homes due to low water levels in the Euphrates and Tigris rivers and severe droughts. An extreme decrease in rainfall caused a water crisis, which also led to the desertification of agricultural land, the drying up of lakes and ponds, as well as the salinization of the soil and an increase in industrial pollution.
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