Iraqi official proposes joint funds with GCC
An adviser to Iraq's Prime Minister Mohammed Al-Sudani is proposing the creation of joint sovereign funds with Gulf oil producers to finance domestic projects.
Mudhar Saleh, a financial advisor to Sudani, said such ambitious initiatives require intensive talks with the countries which possess massive sovereign wealth funds (SWFs), particularly Saudi Arabia, Qatar and the UAE.
Quoted by Iraq's Al-Forat news agency on Monday, Saleh said these funds aim to support major projects at the regional levels, noting that there is a tendency in the region to expand the scope of financial and economic cooperation.
'Like Saudi Arabia, the UAE and Qatar, which possess huge SWFs to diversify their economies, Iraq also possess vast resources which need to be invested through strong partnerships with the aim of funding infrastructure, energy and industrial projects…these initiatives will help re-direct financial surpluses to the Arab region in an effective manner,' Saleh said.
'This strategy requires in-depth Gulf-Iraq dialogue for joint investment and the creation of a multilateral sovereign wealth fund that represents a new model for investment cooperation between Iraq and Gulf countries with financial surpluses.'
Iraq, OPEC's second largest oil producer, does not have a SWF apart from dinar-denominated national funds as the Pension and Social Security Funds, the Education Fund and the Development Fund.
In a recent study, the UN Economic and Social Commission for West Asia (ESCWA) said regional states need to take steps to face the planned increase in US tariffs on in imports despite the exemption of their oil exports.
These steps include strengthening fiscal buffers and resilient financing strategies to address vulnerabilities to trade shocks as low oil prices will adversely impact the oil-exporting countries, increasing the risk of fiscal vulnerabilities, it said.
(Writing by Nadim Kawach; Editing by Anoop Menon)
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