麦肯锡《OverviewoftheIRAQOpportunity》31页.ppt

OVERVIEWOFTHEIRAQOPPORTUNITY DoingBusinessinIraq Amman 5thJune2003 AchmedAl ShahrabaniMcKinsey Company Inc AGENDA OverviewIraqEconomicscenariosforIraqRequiredinvestments AGENDA OverviewIraqEconomicscenariosforIraqRequiredinvestments Totalarea 437 000m2LimitedarablelandArableland 11 Permanentcrops 1 Desert 88 LargestgovernatesBaghdad 8 0m Nineveh 2 1m Basra 2 0m Varyingclimate Baghdad Summertemp 35 50 Wintertemp 5 15 Rainfall 155mm year Source CountryWatch CIAworldfactbook Cartransport39 000kmpavedroads765 000privatelyregisteredpassengercars266 000privatelyregisteredtrucksAirMajorairportsinBaghdad BasraandMosulThreemajorrailwayroutesBaghdad Kirkuk IrbilBaghdad Mosul YurubiyahBaghdad Maagal UmmQasrTelecom3 penetration nomobilenetworkUtilities250watertreatmentfacilitiesPowergenerationcapacityof9500 pre1990 currentlyat1800MW Geographyandclimate Infrastructure ThemajorityofIraqischaracterizedbydesert OVERVIEWIRAQIGEOGRAPHY Source Worldoutlook EIUcountryriskreportIraq 50 ofpopulationyoungerthan16years28 ofpopulationislaborforceApproximately51 males75 ofpopulationresidesinurbanareasThereisanestimated1m 2mIraqi slivinginexileFertilityrate4 5 5childrenperwomenAdultliteracyat54 1 5 2 5millionforeignworkers Keyfacts 1980 1985 1990 1995 2000 2002 CAGR3 DEVELOPMENTIRAQIPOPULATION1980TO2002 Iraqipopulationamountstomorethan24millions Million Source CIAworldfactbook 100 24 2m Others Arabs ShiaMuslims Kurds SunniMuslims 4 62 12 Arabs SunniMuslims 22 ESTIMATE POPULATIONSIZEBYETHNICGROUP ShiaMuslimsformIraq sethnicmajority Adultliteracyat54 vs 75 inIran From6to23yearsSource EIUcountryprofileIraq2002 1980 1998 EDUCATIONENROLMENTRATIOFORALLAGES 1980VS 1998 Anincreasingnumberofchildrendoesnotreceiveformaleducation ESTIMATE Source CountryWatch Provenreserves Unprovenpotential Total GasTrillionm3 2001 OilBillionbarrels 2001 OVERVIEWOFIRAQ SNATURALOILANDGASRESERVES Iraqhasoneofthelargestnaturaloilandgasreserves ESTIMATE Source BPStatisticalreview 2002 1 SaudiArabia 2 Iraq 3 UAE 4 Kuwait 5 Iran Oil provedreservesBillionbarrels 2001 Gas provedreservesTrillionm3 2001 1 Russia 2 Iran 3 Qatar 4 SaudiArabia 5 UAE 10 Iraq RANKINGOFBIGGESTNATURALOILANDGASRESERVESWORDWIDE whicharethesecondlargestinoilandthetenthlargestingas ESTIMATE Purchasingpowerparitymethod currentpricesSource CIAWorldfactbook CountryWatch EIUcountryriskreportonIraq2003 2002 50 60 25 35 1980 DEVELOPMENTOFIRAQ SREALGDP 1980TO2002 Overthepastdecade Iraq srealGDPfellby50 USDbillion ESTIMATE 50 GDPestimatesfor2002subjecttowidevariation USD24 60billion Purchasingpowerparitymethod currentpricesSource CIAWorldFactbook CountryWatch 2002 3 8 4 5 1 0 1 4 1980 ESTIMATE DEVELOPMENTOFIRAQ SREALGDP PERCAPITA 1980TO2002 andpurchasingpowerparityonindividuallevelevenfurther USDthousands GDP capitaestimatessubjecttowidevariation USD1 000 2 500 70 Source GlobalInsightWMM2 Q 2003 Iraq SaudiArabia COMPARISONOFGDPDEVELOPMENTIRAQVS SAUDIARABIA 1970TO2000 IraqhassufferedasignificantreductioninGDPoverlast25years inbillionUSDinpricesandexchangeratesof2000 Source GlobalInsightWMM2 Q 2003 Iraq SaudiArabia COMPARISONOFGDPPERCAPITADEVELOPMENTIRAQVS SAUDIARABIA 1970TO2000 Inthelate70tiesIraq sGDPpercapitawasatparwithSaudiArabia in 000USDinpricesandexchangeratesof2000 BasedonaGDPofUSD30billionandapopulationof24millionSource EIUcountryprofileIraq Jordan Iran Iraq SaudiArabia Syria ESTIMATE COMPARISONOFGDPPERCAPITA 2002 Iraq scurrentGDPpercapitaiscomparabletoSyriaandIran USDthousands Source Economistintelligenceunit2002 OANDA COM Iraqiinflationrates 1996 1997 1998 1999 2000 ExchangeratesIraqiDinarperUSD blackmarketrate Hugebudgetdeficitsleadto printingofmoney BUT OfficialexchangeratehasbeenID0 31totheUSDsince1983 2001 2002 1996 1997 1998 1999 2000 2001 2002 CurrentexchangerateID900 1 000 1USD ESTIMATE DEVELOPMENTOFINFLATIONANDEXCHANGERATES 1996TO2002 Iraqhasshownhighinflationcoupledwithstrongdepreciationofthecurrency Source EIUcountrydata Externaldebt bn Iraq Syria Jordan Iran 230 485 10 91 113 ofGPD 60 130 MaincausesofuncertaintyareAccruedinterest Assistance fundsinIran IraqwarClaimsfollowingGulfwar1991 ESTIMATE COMPARISONOFEXTERNALLIABILITIES 2001 Iraqhassignificantliabilitiesandcanbeconsideredbankrupt Estimatesrangefrom 103 4 129 4bnSource Reuters InstituteforinternationalEconomics 25 18 13 10 SaudiArabia GulfStatesexcl Kuwait Kuwait ParisClubexclRussia France 8 Russia 8 France 2 USA 3 CommercialBankCreditors 2 Bulgaria 2 Poland Czech Romania 1 MultilateralInstitutions 1 Yugoslavia 2 TradeClaims 24 Others Totalexternaldebt 119 14 25 Kuwaitreparationpayments 133 144 Totalclaims IraqregardedtheloansfromSaudiArabiaandKuwaitasgrantpaymentsforits1980waragainstIran Comments Creditor Amount principalandoverdueinterest ESTIMATE BREAKDOWNOFIRAQILIABILITIES 2001 Iraq sliabilitiesaremainly loans fromtheGulfstatesgrantedtoIraqinthe80tiesduringthewarwithIran USDbn TheIMFandWorldBankareowedlessthan 200m Source EIUCountryprofileIraq2002 France Australia China Jordan Top5importsources Top5exportdestinations U S France Jordan Italy Spain Italy Mainlyoilexportswithinthefoodforoilprogram MAJORIRAQITRADINGPARTNERS 2001 Franceismostimportantsupplier theUSmostimportantcustomerofIraqiproducts USDmillion AGENDA OverviewIraqEconomicscenariosforIraqRecentdevelopments Source McKinsey ESTIMATEFORDISCUSSION THREEDEVELOPMENTSCENARIOS Iraq sInthe WorldClass scenarioIraqiGDPpercapitacouldreach4 000USDby2013 Non oilSectors Populationin2003 24million 2008 29million 2013 33millionSource McKinsey GDPdevelopment2003 2013 inbnUSD GDPpercapita 2003 2013 in 000USD ESTIMATEFORDISCUSSION THREEPOTENTIALDEVELOPMENTSCENARIOS Inthe distinctive scenarioIraqiGDPpercapitacouldreach4 000USDby2013 COMPARISONOFIRAQWITHSAUDIARABIA Source GlobalInsightWMM2 Q 2003 GDPpercapitacomparison 000USD GDPcomparisonbnUSD 65 145 20 155 30 225 5 16 1 10 1 10 Iraq Saudi Iraq Saudi Iraq Saudi Iraq Saudi Iraq Saudi Iraq Saudi 1980 1990 2003 1980 1990 2003 ESTIMATEFORDISCUSSION AGENDA OverviewIraqEconomicscenariosforIraqRequiredinvestments Assumingacapitalproductivityof0 2Source McKinseyanalysis GDP2003 bnUSD 30 ESTIMATEOFREQUIREDINVESTMENTSINTOIRAQOVERTHENEXTDECADE Toachievethe WorldClass scenarioIraq seconomyrequiresUSD250 350billionininvestments mostofwhichwillhavetobeFDI overthenextdecade ESTIMATEFORDISCUSSION Assuminganaveragecapitalproductivityof0 2 Source GlobalInsight McKinseyanalysis Oilandgas Construction Community socialandpersonalservices Agriculture Retail Wholesale Communicationincl telecom Manufacturing Transportation Financialservicesincl Realestate Other incl Utilities Sectorsize 2008 ShareofGDPin in2008 60 10 7 5 5 4 3 3 2 1 34 42 6 4 3 3 2 3 2 1 2 1 1 100 ESTIMATEDPOTENTIALSECTORSIZE By2008 Iraq seconomyislikelytocontinuetobedominatedbytheOil gassector ESTIMATE bnUSD 57 67 Total Scenario2 GDPgrowthrateat11 13 GDPasanindicatorofthecapabilityofaneconomyto addvalue Source GlobalInsight McKinseyanalysis By2010IraqcangenerateannualoilrevenuesofaboutUSD44billion assuming80 exportandapriceofUSD20perbarrel Source PFCEconomy 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Raisingproductionto6mb drequiresUSD30 35billionofinvestments RehabilitatingofexistinginfrastructurewillrequireUSD3 6billionofinvestments ESTIMATE ESTIMATEDIRAQIOILPRODUCTION IncreasingIraq soilcapacitywillrequiresignificantinvestments mbarrelperday Source McKinsey EstimatesforrebuildingIraqvaryfromabout 20billionayearforseveralyearstoasmuchas 600billionoveradecadebecausethescaleofreconstructionisdifficulttoestimate ESTIMATE RebuildingIraq sbasichardinfrastructurewillbechallengingandwillrequiresubstantialinvestmentsoverthenextdecade ESTIMATEDINVESTMENTRQUIREMENTS Source McKinsey UnitedStatesDepartmentofDefense USAIDWebsite USAIDCONTRACTS GRANTS AwardedcontractsandgrantsPersonnelSupport AwardedtoInternationalResourcesGroup 7 2 03 SeaportAdministration AwardedtoStevedoringServicesofAmerica 24 3 03 PrimaryandSecondaryEducation AwardedtoCreativeAssociates 11 4 03 LocalGovernance AwardedtoResearchTriangleInstitute 11 4 03 CapitalConstruction AwardedtoBechtel 17 4 03 TheaterLogisticalSupport Inter agencyagreementawardedtotheAirForceContractAugmentationProgram AFCAP on17 2 03 AirportAdministration awardedtoSkyLinkAirandLogisticssupporton5 5 2003 PublicHealth AwardedtoAbtAssociates 30 4 03 BacktoSchoolCampaign AwardedtoUNICEF 8 4 03 HealthWaterandSanitationServices AwardedtoUNICEFon28 3 03 HealthStrengtheningSystems AwardedtoWHO 28 3 03 CommunityActionProgram Awardedtonumberofrelieforganizationsincl MercyCorps IRD SavetheChildrenFederation 27 05 2003 NOTCOMPREHENSIVE UptoUSD680million UptoUSD168million UptoUSD63million UASAIDhasawardedannumberofcontractsandthereareaboutUSD6 7billioninfundsavailabletorebuildIraq Availablefundsources USD1 7billionoffrozenIraqigovernmentassetsintheUS USD700millionofIraqigovernmentcashseizedinIraq USD1 9billioninpledgesfromtheinternationalcommunityandotherassistanceoffers USD2 5billionappropriatedfromUSCongressforreconstruction Source McKinsey CreateanenablingandopeneconomicenvironmentAddresskeyeconomicgovernanceissuessuchastaxation landownership companylaws industryde regulationandinvestorprotection Theimplementedpoliticalandeconomicgovernancemodelwillbeessentialforbuildinginvestorconfidence Implementingthe right long termeconomicgovernancemodelwillbeessentialforattractingtheforeigninvestmentnecessarytorebuildIraq FORDISCUSSION KEYREQUIREMENTSTOATTRACTFOREIGNINVESTMENTS BuildaconstitutionalstateImplementthekeybuildingblocksforanconstitutionalstatewithanindependentjudicialsystem EstablishanaccountablecivilserviceBuildthefoundationforanefficient effectiveandaccountableadministration Sou