Page 18 - of Khadrun’, and that Mark said about the lineage of Jesus son of ‎Mary that he was 'The word of God which He placed in the human ‎body, so it became human’, and that Luke said, 'Jesus son of Mary ‎and his mother were humans of flesh and blood, so the Ho

Investor Guide to Iraq 2021

Interest Rates: there are several effects and dimensions for interest rates that extend deeply in macroeconomics; as it widely
affects investment especially the productive side of it which contributes to expanding the productive capacity and increasing the
resilience of the production system; on one hand it affects the investment costs and on the other has an impact on the capital
sufficiency limits.
Interest rate represents the cost of the borrowed capital, the increase in the interest rate leads to higher borrowed capital cost and
in the end to low investment; investment is reversely connected with the interest rate as it depends on the real interest average
considering it as cost of borrowing, and the trend of the investment mark is minus: raising the interest rate leads to lowering
investment levels and vice- versa.
On the other hand, interest rate affects the sufficiency limits of investment as well as the present value of the future income
streamline and the market interest rate connects reversely with the present value of the future income streamline, as a result the
increase in interest rates leads to (I) lowering the present value and if it is higher than costs means that the investment is
profitable before raising the interest rates but in raising market interest rates present value shall become lower than costs and the
investment is unprofitable.
Likewise, the market interest rate affects the investment by its effect on the marginal sufficiency of the capital. After calculating
the marginal sufficiency of the investment, it is compared with the market interest rate and thus the increase (or decrease) of the
market interest rate may make the marginal sufficiency of the investment less (or greater) than the price. Market interest and thus
the investment is unprofitable (or profitable). This is because the market interest rate represents the opportunity cost of investing.
The higher it is, the higher the opportunity cost. Whereas the higher the marginal sufficiency of the investment, the higher the
investment.
Third: Infrastructure Reality: infrastructure is defined as the concrete capital invested in public utilities and services, and it is an
indispensable economic factor that is critically important for production, trade and investment inside and outside the country, and
it can be divided into two types: tangible and intangible infrastructure.
Tangible infrastructure includes quality of roads, irrigation systems, airports and seaports, bridges and so on. While intangible
infrastructure includes power supply, telecommunications, technology and others.

In Iraq, all infrastructure had been subject to devastation beside a tremendous lack of finance capacity and the most important
part of devastated infrastructure is electricity which represents a decisive factor in investment and production process and a vital
nerve in the modern life the matter that leads to giving it special attention by planners and economic policy drawers embodied by
the annual enormous financial allocations, for this sector front and back connections with other economic sectors in Iraq and the
back connections can be represented by activating the oil sector and products derived out of it and other big industries, while
front connections includes activating agriculture, industry in all its branches, trade and other economic sectors.

www.investpromo.gov.iq 16