DINAR REVALUATION UPDATE: WHAT ABOUT THE NEW INVESTMENT LAW OF SAUDI ARABIA WICH IS SET TO REPLACE THE CURRENT FOREIGN INVESTMENT LAW IN IRAQ, 27 AUGUST

Impact of the Saudi Investment Protection Law on Iraq in August 2024

Amidst the evolving dynamics in the Middle East, the Saudi Investment Protection Law is poised to make significant waves, particularly in Iraq. 1. This legislation, scheduled to be legislated during the next stage, aims to enhance the investment landscape by providing a protective shield for Saudi investments in Iraq. 2. However, the Iraqi Parliament has expressed a lack of knowledge about the details of this law, raising questions about its implications and the potential impact on Iraq's economic and political landscape. 1.

Economic Rapprochement and Investment Trends

Recent years have seen a burgeoning rapprochement between Gulf Arab states and Iraq.  3. This trend is marked by a significant increase in Saudi investment in Iraq, indicative of a wider strategy that includes economic engagement and political overtures. However, tensions may arise if these investments are perceived as interference in Iraqi affairs by Iran and its allies, posing a delicate balance for Riyadh. 3.

Legislative Framework for Investment Protection

The backdrop against which the Saudi Investment Protection Law emerges is one of increased investment protection treaties between countries. 4. These treaties, such as the bilateral investment treaty (BIT) between Iraq and the UAE, aim to mitigate risks for foreign investors by offering protection and enhancing the investment climate. 4. The ratification of such treaties signals a commitment to establishing investor-friendly environments, which the Saudi Investment Protection Law similarly seeks to achieve.

Major Changes and Future Implications

The new investment law of Saudi Arabia, which is set to replace the current Foreign Investment Law, is poised to bring about significant changes. 5. These changes are designed to develop and enhance the competitiveness of the investment environment in the Kingdom, aligning with Vision 2030 and the National Investment Strategy. 5. With a focus on creating job opportunities and providing an attractive investment climate for both Saudi and non-Saudi investors, the law is expected to have far-reaching impacts not only within the Kingdom but also in neighboring countries such as Iraq. 5.

Regional Geopolitics and the Role of China

The recent rapprochement between Iran and Saudi Arabia, facilitated by China, has underscored the shifting geopolitical landscape in the Middle East. 6. This development raises questions about the potential for China to assume a larger role in the region, traditionally dominated by the U.S. 6. Moreover, the impact of this rapprochement on managing or resolving conflicts in the Middle East, including those in Syria and Yemen, remains a subject of speculation and analysis. 6.

In conclusion, the Saudi Investment Protection Law, set against the backdrop of changing regional dynamics, holds significant potential to reshape the economic ties between Saudi Arabia and Iraq. Its impact on Iraq will be multifaceted, encompassing economic, political, and geopolitical dimensions. As the law progresses through the legislative process, its eventual effects on Iraq will be closely monitored by regional and global stakeholders.