In a remarkable transformation, Baghdad, a city synonymous with conflict and turmoil in recent decades, is experiencing a cautious resurgence fueled by a wave of new investments.
Iraq’s rich oil resources and the fragile stability achieved since the defeat of the Islamic State group in 2017 have set the stage for a construction boom that is changing the city’s landscape.
One emblematic project in this revival is the sprawling riverside complex, where Iraqis now gather to enjoy shisha and bowling on warm summer evenings. The complex, built on the grounds of one of Saddam Hussein’s former palaces, takes its name from the famed “One Thousand and One Nights” folktales. Falah Hassan, the executive director of this establishment, voiced his optimism, stating, “Iraq is fertile ground for investments.”
Since taking office in October, Prime Minister Mohamed Shia Al-Sudani has prioritized the rehabilitation of Baghdad’s infrastructure, which has long suffered from conflict-related neglect. However, despite these positive developments, a July report from the World Bank highlights persistent investor hesitancy. Reasons cited include “a lack of business-friendly legislation, a volatile security environment, administrative inefficiencies, and systemic corruption.”
Hassan acknowledged these challenges, particularly the security situation and bureaucratic hurdles. He noted that navigating the bureaucracy could involve going through a staggering 1,000 counters to obtain a single permit. Nonetheless, Hassan highlighted the resilience of young investors behind the newly opened “1,001 Nights Park” complex along the Tigris River in late 2022.
Authorities are determined to address these obstacles to attract investors, especially from Gulf nations. In late August, Prime Minister Al-Sudani attended the groundbreaking ceremony for a luxury hotel and residential complex, marking the first major Qatari investment in Baghdad. Al-Sudani affirmed the government’s commitment, stating, “From the prime minister to the lowest-ranking official, we will stand alongside investors and the private sector to carry out projects in Baghdad and the provinces.”
However, experts suggest that a significant portion of the funding for these projects may be tainted by corruption. Hayder Al-Shakeri, writing for the Institute of Regional and International Studies at the American University of Iraq, Sulaimani, highlighted how Iraq’s political elite and their associates have invested their wealth in local projects as a means of sheltering ill-gotten gains.
Despite these challenges, Al-Sudani’s administration has made strides in improving essential services in Baghdad’s informal neighborhoods, constructing bridges, and redesigning streets in one of the Arab world’s most populous cities. The 2023-2025 budget reflects this commitment, allocating a record $37 billion for annual investment expenses, three times the 2022 amount, thanks to Iraq’s substantial oil wealth and foreign reserves exceeding $100 billion.
In the outskirts of Baghdad, neighborhoods like Kufa are witnessing infrastructure upgrades after years of neglect. A special unit comprising personnel from various ministries, state-owned enterprises, army engineers, and the Popular Mobilisation Forces is overseeing these efforts. Abdel Razzak Abd Mhessein, the unit’s head engineer, explained their mission to rehabilitate over 1,093 informal neighborhoods deprived of services for more than two decades.
Public reactions to these initiatives are mixed. While some, like 55-year-old day laborer Abu Ali al-Bahadli, appreciate the improved roads and services, others like 45-year-old civil servant Ahmed Radi remain skeptical, citing the absence of adequate electricity and running water on their streets. Radi’s concerns highlight the challenges that still loom over Baghdad’s path to revitalization, as residents eagerly await further improvements to their daily lives.
