ERBIL, Kurdistan Region - Joint-stock companies make up just two percent of Iraq’s gross domestic product (GDP), the lowest percentage in the Middle East and North Africa, Governor of the Central Bank of Iraq (CBI) Ali al-Alaq said on Thursday.
“There are sizable monetary resources inside the country, but it is not optimally invested as they are separated from economic activities or hoarded without generating real value,” Alaq said during a speech at the inauguration of the International Center for Finance and Trade in Sulaimani.
Establishing companies with stock owned jointly by shareholders could absorb scattered capital, regardless of their size, he said, adding that this requires deliberate thinking, initiatives and innovation, ultimately harnessing monetary resources for growth and prosperity.
Iraq has a severe shortage of joint-stock companies, with their contribution to GDP at just two percent. In comparison, such companies account for 55 percent of GDP in the Middle East and North Africa and up to 90 percent in developed nations. This disparity highlights the need for innovative economic strategies and financial centers to stimulate growth, according to the CBI governor.
Alaq said that Iraq, particularly the Kurdistan Region, holds vast investment potential that remains underutilized due to a lack of clear investment channels and highlighted the need for financial centers to play a pivotal role in mobilizing resources and establishing joint-stock companies in key strategic sectors to drive economic growth.
The International Center for Finance and Trade in Sulaimani that opened on Thursday is the first such specialized center in Iraq, providing key infrastructure for banks, financial markets, and trade and investment.
Alaq underscored the importance of such centers in fostering economic growth, noting that they are “economic levers” that have the potential to improve finance, investment, and commerce.
The CBI governor also commented on a decline in bank deposits, attributing it not only to issues of trust in the banking system, but also to alternative investment opportunities with higher returns, such as digital platforms enabling global investments. He noted that financial technology and AI-driven transformations are reshaping economies, with digital banking expected to replace traditional models and stressed the need for financial centers to attract investments, facilitate capital flow, and promote Iraq’s economic potential, particularly in the Kurdistan Region.
The CBI remains committed to “support any effort that contributes to achieving sustainable economic growth,” he added.
