Although Iraq has undergone major developments when it comes to reconstruction after the war, the country is still facing a multitude of challenges. The first and foremost issue is the situation of security. Because of this uncertainty regarding the country's prosperity prevails and investors, particularly Western companies, are still hesitant to invest in Iraqi market. The situation has gotten worse because of the recent conflict surrounding Korek and Barzani partnership in the telecommunications sector. The country is therefore looking up to China to come to its rescue and especially provide funding to strengthen the energy infrastructure.
A number of Chinese companies are already working in Iraq in the oil sector in exchange for 100,000 barrels of oil every day. These operations will strengthen the oil sector as well as improve infrastructure in Iraq for future development. There are plans to bring more Chinese investment into the country in the near future to revamp economy.
China has a stake in Iraq's economic growth because of geopolitical reasons. That is why it wants to become Iraq's strategic partner helping the latter to improve its security situation in order to receive more foreign investment. In the absence of Chinese investment, it was nearly impossible for Iraq to get back on track after the destruction and sanctions resulting from war. Chinese companies are being welcomed in the country because of their extensive experience in the energy sector. Once they start working, it will be a great achievement for Iraq in the context of economic growth.
Some other sectors that are being studied for investment include telecommunications and ports development other than electricity. In Baghdad alone, about 60% of the electricity is being provided by Chinese firms working in the area. Baghdad is also interested in increasing its oil revenue to be able to offer more funding to government for reconstruction of infrastructure.
Conclusion
China and Iraq have recently become important strategic partners for the development of energy and infrastructure in Iraq. This partnership is going to benefit both countries because China is also reliant on Iraq for its major oil import. Both countries are interested in strengthening their ties at all levels. Because of this reason, China plans on bringing more investments into the country to develop the energy sector and infrastructure. In 2018, the trade exchange between the two countries crossed 30 billion USD, which is a great achievement. If this partnership continues to grow, both countries will experience a boost in cooperation and enhanced bilateral ties in various fields.
