综观伊拉克时机.pptx

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1、OVERVIEW OF THE IRAQ OPPORTUNITYDoing Business in IraqAmman,5th June 2003Achmed Al-ShahrabaniMcKinsey&Company,Inc.AGENDAOverview IraqEconomic scenarios for IraqRequired investments AGENDAOverview IraqEconomic scenarios for IraqRequired investments Total area:437,000 mTotal area:437,000 m22Limited ar

2、able landLimited arable land Arable land:11%Arable land:11%Permanent crops:1%Permanent crops:1%Desert:88%Desert:88%Largest governatesLargest governates Baghdad(8.0m)Baghdad(8.0m)Nineveh(2.1m)Nineveh(2.1m)Basra(2.0m)Basra(2.0m)Varying climate(Baghdad)Varying climate(Baghdad)Summer temp:35-50Summer te

3、mp:35-50 Winter temp:5-15Winter temp:5-15 Rainfall:155mm/yearRainfall:155mm/year Source:Country Watch,CIA world fact bookCar transportCar transport 39,000 km paved roads39,000 km paved roads 765,000 privately registered 765,000 privately registered passenger carspassenger cars 266,000 privately regi

4、stered 266,000 privately registered truckstrucksAirAir Major airports in Baghdad,Major airports in Baghdad,Basra and MosulBasra and MosulThree major railway routesThree major railway routes BaghdadKirkukIrbilBaghdadKirkukIrbil BaghdadMosulBaghdadMosulYurubiyahYurubiyah BaghdadMaagalUmm BaghdadMaagal

5、Umm QasrQasrTelecomTelecom 3%penetration,no mobile 3%penetration,no mobile networknetworkUtilities Utilities 250 water treatment 250 water treatment facilitiesfacilities Power generation capacity Power generation capacity of 9500(pre 1990),of 9500(pre 1990),currently at 1800MWcurrently at 1800MWGeog

6、raphy and climateInfrastructureThe majority of Iraq is characterized by desertOVERVIEW IRAQI GEOGRAPHYSource:CIA world fact book100%=24.2mOthersArabs-Shia MuslimsKurds Sunni Muslims46212Arabs Sunni Muslims22ESTIMATEPOPULATION SIZE BY ETHNIC GROUPShia Muslims form Iraqs ethnic majority%Adult literacy

7、 at Adult literacy at 54%(vs.75%in 54%(vs.75%in Iran)Iran)*From 6 to 23 years Source:EIU country profile Iraq 200219801998EDUCATION ENROLMENT RATIO FOR ALL AGES*-1980 VS.1998An increasing number of children does not receive formal educationESTIMATESource:Country WatchProven reservesUnproven potentia

8、lTotalGas Trillion m3,2001OilBillion barrels,2001OVERVIEW OF IRAQS NATURAL OIL AND GAS RESERVESIraq has one of the largest natural oil and gas reservesESTIMATESource:BP Statistical review,20021.Saudi Arabia2.Iraq3.UAE4.Kuwait5.IranOil,proved reservesBillion barrels,2001Gas,proved reserves Trillion m

9、3,20011.Russia2.Iran3.Qatar4.Saudi Arabia5.UAE10.IraqRANKING OF BIGGEST NATURAL OIL AND GAS RESERVES WORDWIDE which are the second largest in oil and the tenth largest in gasESTIMATE*Purchasing power parity method,current pricesSource:CIA World fact book;Country Watch;EIU country risk report on Iraq

10、 2003200250-6025-351980DEVELOPMENT OF IRAQS REAL GDP*-1980 TO 2002Over the past decade,Iraqs real GDP fell by 50%USD billionESTIMATE-50%-50%GDP estimates GDP estimates for 2002 subject for 2002 subject to wide variation to wide variation(USD 24-60(USD 24-60 billion)billion)*Purchasing power parity m

11、ethod,current pricesSource:CIA World Factbook;Country Watch20023.8-4.51.0-1.41980ESTIMATEDEVELOPMENT OF IRAQS REAL GDP*PER CAPITA-1980 TO 2002 and purchasing power parity on individual level even furtherUSD thousandsGDP/capita GDP/capita estimates estimates subject to wide subject to wide variation(

12、USD variation(USD 1.000-2.500)1.000-2.500)-70%-70%*Based on a GDP of USD30 billion and a population of 24 millionSource:EIU country profile IraqJordanIranIraqSaudi ArabiaSyria*ESTIMATECOMPARISON OF GDP PER CAPITA-2002Iraqs current GDP per capita is comparable to Syria and IranUSD thousandsSource:EIU

13、 country dataExternal debt$bnIraqSyria JordanIran230-485230-48510109191113113%of GPD60-130Main causes of Main causes of uncertainty areuncertainty are Accrued interestAccrued interest“Assistance”“Assistance”funds in Iran-funds in Iran-Iraq warIraq war Claims Claims following Gulf following Gulf war

14、1991war 1991ESTIMATECOMPARISON OF EXTERNAL LIABILITIES-2001Iraq has significant liabilities and can be considered bankruptAGENDAOverview IraqEconomic scenarios for IraqRecent developments Source:McKinsey“Good standard”1 1Assumes the non-oil sectors of the Iraqi economy grows modestly at a CAGR of 3-

15、5%over the next 10 years(overall GDP growth incl.oil 9-11%)“Best in Class”2 2Assumes the non-oil part of the the Iraqi economy grows strongly at a CAGR of 7-9%over the next 10 years(overall GDP growth incl.oil 11-13%)“Distinctive”3 3Assumes the non-oil sectors of the Iraqi economy grows aggressively

16、 at a CAGR 12-15%over the next 10 years(overall GDP growth incl.oil 13-15%)ESTIMATEFOR DISCUSSIONTHREE DEVELOPMENT SCENARIOSIraqs In the World Class scenario Iraqi GDP per capita could reach 4,000 USD by 2013Non-oilSectors Oil production level 2008Oil production level 20134-5 million barrels per day

17、6-7 million barrels per dayOilSector+*)Population in 2003=24 million,2008=29 million,2013=33 millionSource:McKinseyGDP development 2003-2013(in bn USD)GDP per capita*2003-2013(in 000 USD)ESTIMATEFOR DISCUSSIONTHREE POTENTIAL DEVELOPMENT SCENARIOSIn the distinctive scenario Iraqi GDP per capita could

18、 reach 4,000 USD by 20131 1“Good Standard”1.8-2.22.2-2.62003201320081.253-6373-862003201320083014%6%11%3%2 2“Best in class”2.0-2.32.5-2.92003201320081.257-6783-982003201320083016%8%12%5%3 3“Distinctive”2.2-2.63.1-3.82003201320081.263-75102-1262003201320083018%11%15%8%AGENDAOverview IraqEconomic scen

19、arios for IraqRequired investments*Assuming a capital productivity of 0.2Source:McKinsey analysisGDP 2003(bn USD)30200-300Investment required*(bn USD)1 1GDP 2013(bn USD)70-90Investment required*(bn USD)2 2250-350GDP 2013(bn USD)80-100Investment required*(bn USD)3 3350-500GDP 2013 bn USD100-130ESTIMA

20、TE OF REQUIRED INVESTMENTS INTO IRAQ OVER THE NEXT DECADETo achieve the World Class scenario Iraqs economy requires USD 250-350 billion in investments,most of which will have to be FDI,over the next decadeESTIMATEFOR DISCUSSIONAssuming an average Assuming an average capital productivity of capital p

21、roductivity of 0.20.2Source:McKinseyOil&gasOil&gasReestablishing and increasing oil production capacity to 6-7 million barrels per day by 2010USD 35-40 USD 35-40 billion billion Utilities Utilities Re-construction of basic infrastructure such as transport facilities,telecommunications and utilities(

22、power capacity currently at 1.800MW compared to 9.500MW pre 1990)USD 10-15 USD 10-15 billion just for billion just for electricity and electricity and telecomtelecomEstimates for rebuilding Iraq vary from Estimates for rebuilding Iraq vary from about$20 billion a year for several years about$20 bill

23、ion a year for several years to as much as$600 billion over a decade to as much as$600 billion over a decade because the scale of reconstruction is because the scale of reconstruction is difficult to estimatedifficult to estimateEducationEducationRebuilding and upgrading of primary,secondary and ter

24、tiary educational institutionsUSD 6-12 USD 6-12 billion billion Health careHealth careReestablishing pre 1980 health care facilities and standards USD 10-20USD 10-20 billion billion ESTIMATETransport Transport infrastructureinfrastructureRebuilding 40,000 km of paved roads,3 main railway lines,3 mai

25、n airports,2 portsSeveral Several billions billions Housing/offices Housing/offices Rebuilding Iraqs basic hard infrastructure will be challenging and will require substantial investments over the next decadeESTIMATED INVESTMENT RQUIREMENTS Industrial Industrial infrastructureinfrastructureRebuildin

26、g Iraqs industrial base(petrochemical,building materials,mining,consumer goods,etc.)?Source:McKinsey3.3.Create an enabling and open economic Create an enabling and open economic environment environment Address key economic governance Address key economic governance issues such as taxation,land issue

27、s such as taxation,land ownership,company laws,industry ownership,company laws,industry de-/regulation and investor protection de-/regulation and investor protection The implemented The implemented political and political and economic economic governance model governance model will be essential for

28、will be essential for building investor building investor confidenceconfidenceImplementing the right long-term economic governance model will be essential for attracting the foreign investment necessary to rebuild IraqFOR DISCUSSION KEY REQUIREMENTS TO ATTRACT FOREIGN INVESTMENTS1.1.Build a constitu

29、tional state Build a constitutional state Implement the key building blocks for Implement the key building blocks for an constitutional state with an an constitutional state with an independent judicial system independent judicial system 2.2.Establish an accountable civil serviceEstablish an account

30、able civil service Build the foundation for an efficient,Build the foundation for an efficient,effective and accountable effective and accountable administration administration Source:Press clippingsHow do the changes in Iraq affect the economic governance structures in the region and will other cou

31、ntries in the region be forced to open up their economies to stay competitive?What is the economic and political impact of a potential drop in oil prices caused by an increased in Iraqs production and what will be the future of OPEC?How can regional companies benefit from expected large investment requirements to rebuild Iraq and how will position themselves to capture the opportunity(e.g.,consolidation,alliances)?KEY ISSUES FOR THE REGION FOLLOWING THE REBUILDING OF IRAQ which will have impact on other economies of the regionFOR DISCUSSION THANK YOU