Iraq prime minister promises corruption crackdown, says laws will protect nervous foreign investors

Iraq prime minister promises corruption crackdown, says laws will protect nervous foreign investors

More than six months after Iraq's leadership proclaimed the defeat of ISIS on Iraqi territory, the country is on a path to rebuild and has seen promising signs of international investment for its reconstruction.

Though the country's reconstruction is in its early stages, Prime Minister Haider al-Abadi told CNBC Sunday at the Munich Security Conference, he described the progress as "encouraging" and as evidence of trust from the international community in Iraq.

"We never anticipated this number of companies, investors or would-be investors, governments, to be so enthusiastic about taking part," Al-Abadi said, in reference to an international conference held last week in Kuwait for the rebuilding of Iraq. "This is a sign that there is a trust with Iraq. There is a trust that Iraq is moving to a different direction than before, which is very encouraging for us, and very encouraging for them."

The Kuwaiti-sponsored conference drew representatives from more than 70 countries, 51 international aid organizations, and several hundred businesses. The enthusiastic gathering of international donors, which culminated in $30 billion worth of pledged investment, represented widespread support for a stabilized Iraq. International leaders have warned that insufficient resources for Iraqi reconstruction could undo all the progress made against ISIS and enable social and economic problems to fuel further sectarian strife.

Just three months away from elections, reconstruction efforts are the key focus for the government of Iraq as more than 900,000 people return to communities demolished after years of fighting. In Mosul alone, aid organizations estimate it will take a decade to rid the city of its remaining improvised explosive devices and dangerous remnants of war.

Iraqi officials have said that $88.2 billion would be needed to rebuild the war-battered country, with housing among the most urgent priorities. They noted that the $30 billion pledged in Kuwait fell significantly short of that figure, though Al-Abadi described it as very positive regardless.

Still, while the security situation may have improved, many investors are wary of deep-seated corruption and a dense web of red tape and bureaucracy. Transparency International ranks Iraq as the 10th most corrupt country in the eyes of investors.

Asked how the government would reassure investors that their funds would be allocated properly, the prime minister stressed his focus on tackling corruption.

"We are laying down all the legal framework ... I think the worry is corruption, number one, which is hiding behind red tape and bureaucracy. We have established a higher committee which is headed by the prime minister and it has a follow up team to make sure to remove blocks as they are there because of the bureaucracy," Al-Abadi said.

"I think this will be a huge bonus for companies; sometimes they are pressed to pay bribes or something like that. We want to keep away from this, we want every dollar which goes into investment or donation to serve the people, not to go to the pockets of corrupt people."

Al-Abadi appeared confident, despite the significant challenges ahead.

"I think now that the process of engaging investors in Iraq, I am sure in the next few months will be the foundation of this. We've already appointed a committee. Next month is going to be a meeting with major investors to follow up … And I hope that after the election they'll immediately start."