Iraqi government aims for stronger economic ties with Japan


Prime Minister Mohammed Shia Al-Sudani of Iraq has expressed the government’s keen interest in enhancing economic cooperation with Japan. The announcement came during a meeting between Al-Sudani and Futoshi Matsumoto, the Japanese Ambassador to Iraq.

The leaders discussed bilateral relations and potential collaboration across various sectors, as reported by the Prime Minister’s Office.

Highlighting Iraq’s promising investment opportunities, Prime Minister Al-Sudani emphasized the potential for development and prosperity. Last week, Japanese Ambassador Matsumoto unveiled a series of initiatives to be undertaken in Iraq. Among these projects, two are scheduled for execution in 2023. The first is the Basra Refinery Upgrading Project, while the second involves a water desalination endeavor in Muthanna governorate.

Notably, the Muthanna project carries a price tag of $300 million and holds immense significance for Iraq’s infrastructure advancement. Ambassador Matsumoto underlined Japan’s commitment to Iraq, reaffirming the nation’s support through soft loans.

Recently, the Japanese Embassy in Iraq reported a significant milestone: Ambassador Matsumoto, along with Iraqi Finance Minister Taif Sami and the Japan International Cooperation Agency (JICA), signed an agreement for the provision of the fifth phase of the Official Development Assistance (ODA) loan. Valued at $1.4 billion, this loan is designated for the expansive Basra Refinery Upgrading Project – the largest Japanese undertaking in Iraq.

The project’s objectives encompass several critical aspects. It aims to curtail foreign currency expenses related to fuel imports, enhance trade, mitigate fiscal deficits, and create economic opportunities for Iraqi citizens. Furthermore, the initiative aspires to modernize Iraq’s energy sector, enticing private sector involvement and reducing air pollution through sulfur content reduction in oil products.

The project also capitalizes on Japan’s advanced technical and engineering expertise, particularly in the Fluid Catalytic Cracking (FCC) Complex of the Basra Refinery. A remarkably low interest rate of 0.2 percent per annum underscores Japan’s commitment to Iraq’s financial stability.

With these strategic initiatives in place, Iraq and Japan are poised to reinforce their economic ties, ushering in a new era of cooperation and mutual benefit.

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