Jun 10, 2020 - 3:30pm

Reimagining the U.S.-Iraq Relationship


Vice President, Middle East Affairs

Manager, Middle East Affairs

U.S.-Iraq relations are coming to another important crossroads as senior officials from our two governments come together virtually today for the U.S.-Iraq Strategic Dialogue. They are meeting amidst a global health pandemic that has not only inflicted a tremendous human toll but also caused acute economic destruction and uncertainty around the world. During times such as this, it is more vital than ever to pull closer to friends and allies and work in the spirit of partnership. Despite the immense hardship caused by COVID-19, there is an opportunity for our nations to come through this – and other challenges facing us — as stronger partners.

While we understand much of the discussion will concentrate on the response to COVID-19, Iraq’s security, and U.S. troop presence, at the U.S. Chamber, we believe it is essential for there to be a sustained focus on the economy as part of any continuing discussion. Through our U.S.-Iraq Business Council, we have long been an advocate for an economic reform agenda in Iraq that would create the conditions for deeper U.S. commercial and investment ties and ultimately a more diversified and prosperous Iraqi economy.   

In advance of the strategic dialogue, the Council provided officials in both governments with a report to help prioritize this week’s discussions and guide their work in the months ahead. Our contribution is based on input from companies doing business in Iraq and offers tangible ideas and recommendations reflecting the potential to grow the bilateral economic relationship as well as addressing some of the biggest challenges keeping companies from growing their commercial activities and investments in Iraq.

Major Economic Themes

Private Sector Engagement: The U.S.-Iraq Business Council places a premium on bringing business executives together with Iraqi and U.S. government leaders. Since we do not want COVID-19 to stall this work, we are committed to organizing and leading a Virtual Business Mission to Iraq in the Fall of 2020 to engage government leaders and decision-makers. Additionally, the Council will convene sector-specific webinars as well as other virtual programs, such as an economic forum focused on the Kurdistan Region of Iraq.  

Energy Collaboration: As Iraq’s primary source of revenue, it is vital to grow bilateral energy sector cooperation and advance the development of Iraq’s oil and gas resources. We recommend our governments establish a U.S.-Iraq Energy Dialogue as a complimentary platform to the strategic dialogue to bring together government leaders with energy executives to discuss opportunities, challenges and projects. A top priority must be developing capacity to transport and process associated gas from field developments, in order to minimize flaring and simultaneously to strengthen Iraq’s energy independence and capacity to generate electricity.

Economic Diversification: While Iraq’s energy sector understandably garners much attention, we believe it is imperative to support Iraq’s aspirations to diversify its economy in order for Iraq to achieve its economic potential and integrate into the global economy. Iraq needs a strategy to invest in both sectors where it has a natural advantage and resources, such as agriculture and logistics, and in sectors that are transformative and impactful of Iraq’s citizens and economy at large, such as healthcare, digital technologies, and financial services. We stand ready to assist Iraq in this essential drive for transformation.   

Rule of Law & Transparency: Widespread corruption in Iraq represents a monumental challenge that inhibits progress on many levels by diverting resources from much needed investments in reconstruction and development, and the provision of essential services to its citizens. It also hinders efforts to attract foreign investment and all the ancillary benefits that come with commercial activity by global industry leaders. Iraq’s leaders should commit to reducing corruption and set clear and demonstrable goals to measure progress while also advancing human security for all Iraqi citizens, putting into practice a governance regime that is predictable, enforceable, and applied equally to all, and working to uphold the concept of sanctity of contract at all levels of government.

Small Business Ecosystem: Developing a strong and healthy private sector is necessary for Iraq to generate jobs and sustainable livelihoods for a growing population. A dynamic private sector is also key to developing a diversified and resilient market economy. Small and medium-sized enterprises (SMEs) are the cornerstone of the private sector. It will not be an easy or quick task but the GOI should work diligently to rollback regulations and laws that serve as barriers to entrepreneurs and SMEs. 

A Shared Purpose – Rising to the Challenges

The United States and Iraq must work together to bring about better opportunities and economic prosperity for the Iraqi people. While it is necessary to engage on tactical issues and granular questions facing companies, it is also incumbent on the business community to work collaboratively with our partners in Iraq to reimagine our shared purpose and to challenge assumptions and convention, and to prod ourselves to think and act creatively to overcome obstacles impeding modernization, reform, development, investment, risk-taking, job creation and economic growth.

While setting realistic expectations and recognizing there are substantial challenges facing Iraq and complex regional dynamics, we should not be deterred in purpose or distracted in attention and resources. As we come to yet another crossroad, the U.S. Chamber’s U.S.-Iraq Business Council renews its commitment to this worthy endeavor.   

About the Authors

About the Author

Steve Lutes headshot
Vice President, Middle East Affairs

Steve Lutes is executive director Middle East Affairs at the U.S. Chamber of Commerce. He is responsible for managing the U.S.-Egypt Business Council, U.S.-Iraq Business Initiative, the U.S.-GCC Business Initiative, and serves as executive director for each.

About the Author

Anna Burress
Manager, Middle East Affairs

Anna Burress is the Manager for Middle East Affairs at the U.S. Chamber of Commerce.