Gulf backs Iraq’s anti-corruption push as Baghdad seeks funds

• GCC supports Iraq’s reform agenda
• Investment hinges on stronger protection
• New fund targets Gulf capital

Gulf Arab states have backed Iraq’s anti-corruption drive, with GCC secretary-general Jassim Al-Budaiwi signalling in Baghdad this week that reforms under prime minister Ali Al-Zaidi could pave the way for deeper investment and economic cooperation.

“Al-Budaiwi praised the steps initiated by the prime minister in strengthening the economy, combating corruption, restricting weapons to the state, and building strong relations with the Gulf Arab states… he expressed readiness to expand the partnership with Iraq,” Al-Zaidi’s office said in a statement to mark the GCC leader’s visit.

The six GCC states of Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and the UAE, which control over a third of the world’s proven oil deposits, are among the largest foreign investors in Iraq. They have demanded better protection against profit transfers and possible nationalisation, according to Iraqi press reports.

Last year, Iraq’s parliament debated a controversial law for the protection of Saudi investments following a pledge by Riyadh to pump more capital into the country.

The debate split parliament, with a group of legislators threatening to boycott sessions and saying the new law would allow Saudi Arabia to control Iraq’s economy by allowing Saudi investors to siphon large funds out of Iraq.

Analysts defended the legislation on the grounds it would support Iraq’s economy through investment in projects by Saudi Arabia and other countries.

Saudi Arabia, the world’s largest oil exporter, is already one of the largest Arab investors in Iraq and its assets were poised to grow sharply following the signing of 12 economic and investment agreements in 2024.

Other GCC members also have a strong investment presence in Iraq, including Qatar, whose state-owned QatarEnergy holds 25 percent of a $27 billion gas and solar power contract awarded to France’s TotalEnergies in 2023.

The UAE’s Masdar renewable energy company has been awarded a deal to build solar power plants in Iraq with a combined output capacity of 1,000 megawatts.

Further reading:

• Iraq targets state funds stolen from ‘people, poor and orphans’
• Iraq’s central bank governor cannot fight crime on his own
• Iraq joins money-laundering watchlist

GCC states will also supply Iraq with around 500MW of electricity through a grid link-up due for completion this year.

Al-Budaiwi’s meeting in Baghdad came two days after Al-Zaidi revealed plans to create a development and energy fund in partnership with three GCC members.

“We are proceeding with the establishment of the energy and development fund, which will be subscribed by the Central Bank of Iraq and will be offered for public subscription. We will also invite Saudi Arabia, the UAE, and Qatar to contribute to this fund.

“We also intend to invite US and European funds and banks,” Al-Zaidi said in comments published by his office.