Kurdistan. A year of reform and modernity Government and private sector to lay the foundations for a united future

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1 See this report at Kurdistan Special supplement by Haddock Media International distributed with The Times FOREIGN AFFAIRS Kurdistan has come a long way over the past 30 years to become a dynamic region and valued ally of the West. P3 QAIWAN GROUP Highly diverse business group shows potent reasons to invest in a wide range of sectors beyond oil and gas. P4-5 STER GROUP Saturday, March 5, 2016 NEWROZ TELECOM the multifaceted conglomerate is attracting the attentions of major international partners with its commercial foresight. P6 impressive growth and new infrastructure reveal the huge scope for telecom investment and development. P7 A year of reform and modernity Government and private sector to lay the foundations for a united future LaWMaKeRS and businessmen in the semiautonomous Kurdistan region of iraq are currently facing a raft of economic and political issues. a recent World Bank report shows that the area s economy, which had been developing steadily, slowed by 5 per cent over the past year. The slowdown has left Kurdish officials searching for more than $1 billion in international financial assistance. Meanwhile, threats posed by islamic State (is) forces stationed in neighbouring Syria have sparked both financial and national security concerns. The ongoing conflict against IS has been particularly problematic. attacks on transportation routes and other crucial economic lifelines have caused significant declines in Kurdistan s oil trade, by far the region s foremost industry. Kurdistan is also dealing with more than 1.5 million refugees fleeing IS forces in nearby countries. But with that all said, Kurdistan s military arm, the Peshmerga, has received widespread praise for its role in international efforts to combat is forces. despite this worrisome atmosphere, Kurdish leaders, who have long been lauded for maintaining a relatively stable regional government, have retained a cautious optimism. Officials have reportedly stated that the most significant crisis PRoJect team eva coronado, Project coordinator alejandro Fernández, editorial director facing Kurdistan is its need to bring a semblance of control to its financial situation. To that end, a round of significant spending cuts designed to help the region wrangle in its mounting debt obligations were introduced in late Speaking at a conference in January 2016, Kurdish Prime Minister nechirvan Barzani said he hopes to bring financial stability to the region. He added that it was right for every [Kurdish] citizen to pay attention to Kurdistan s recent troubles. We as government will work as key partners with our business community, unions, syndicates and academics to support the reform process. this year will be the year of reform and modernization across government institutions. We will put in place policies aimed at reducing poverty, strengthening productive sectors, and pursue a growth agenda for our future generations, Mr Barzani said. the people of our Kurdistan have well demonstrated their resilience. i realise times are especially tough, but i promise that we will reach our ultimate objectives. We will destroy is, we will build new industries, including the export of natural gas to the world market. We will put in place policies aimed at reducing poverty, strengthening productive sectors, and pursue growth Nechirvan Barzani, Prime Minister of the Kurdistan Regional Government We will build a just, prosperous and united society. during this time of austerity, those who are more capable will have to share the burden with others who are less fortunate. We all have to work together. in this report, you will meet more business and government leaders who are trying to guide Kurdistan out of its current hardships. From real estate to energy to telecommunications, these entrepreneurs are working to bring the best out of Kurdistan s commercial potential.

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3 3 ENTERPRISE Business leaders reveal the scale of nation s positives Investors advised to look beyond the region s challenges KURdiSH business leaders from a wide range of sectors are fully cognizant of the negatives afflicting their region but at the same time they also realise its pluses, including its abundant natural resources, a young population eager for education and the desire of all Kurds to embrace the world. asked how they perceive the future of their country, these business leaders provided an insightful tour d horizon of Kurdistan, with most of their suggestions centred on the economy and especially the need to make the country attractive to investors. While people are focusing on is and terrorism as the biggest threat to Kurdistan, the single biggest threat is the economic situation, argues Sirwan Sami abdul Rahman, the chairman of the Renwa Group, which is active in the oil and gas sector. We are competing with every country in the world for investment dollars and we should not take things for granted. So it is absolutely critical that the government, private investors and ngos highlight Kurdistan s openness and willingness to receive foreign investment. chairman of telecom operator asiacell Faruk Mustafa Rasool says that despite the challenges facing business in Kurdistan, wise investors should think positively. i always emphasise that taking risks can be rewarding as where there is risk, there is opportunity and this country is full of opportunities right now, says Mr Rasool. Others were more specific in their recommendations to ensure Kurdistan s future, with Riyadh H. Hasson, the General Manager at erbil Bank for investment and Finance, trumpeting new investment-friendly banking moves. Kurdistan and iraq are full of natural resources: water, oil and gas and many others. Because The fountains of Shar Park, the main square in Kurdistan Region s capital city, Erbil these are underground, we only need peace to make the best of them, he says. it will be crucial to our economy to have international investors return to the region and promote a better investment environment. there is good news in the new phase of cooperation between iraq s Central Bank and the Kurdistan financial authorities and economic reforms on the horizon. dean Michael, the ceo of property developer and engineering firm Atconz Group, which has been at the forefront of Kurdistan s construction boom, building residences, shopping centres and hotels, concurs at the region s need for a stronger banking sector. Because the economy is linked to oil prices and because the political situation in the region is volatile, we have to plan short term, he says. and as this is a cash economy, there is no real commitment from any bank to support or sustain any business or mortgage. Mr Michael points out that there is a lot of opportunity in activities such as housing, roads and telecommunications networks, and as with any economy, the base is the banking industry. We need to attract banks here, he continues. the government must enforce the law to lure big financial institutions so we can expand the entire financial infrastructure to allow us to work and develop businesses. another potentially successful sector is tourism, says Ghassan dalal, the General Manager of the Rotana Hotel, the first five-star hotel in the Kurdish capital of erbil. the government must boost tourism by developing infrastructure and projects that cater to tourists, he declares. this is a long-term endeavour because it would require a real commitment, but tourism could be one of the biggest contributors to socio-economic growth in Kurdistan. However, it is not only natural and mademade resources that will help the region, human resources also require development, according to Michael William Mulnix, President of the american University of Kurdistan. education is the key to shape global citizens and to provide the next generation of leaders in the entire region with the most complete skills to support social and economic advancement, he says. aram ibrahim, the ceo of the Zagros Group, with interests in aviation, contracting, energy and technology, sums up the attitudes of the local business community when he says, international investors should come to Kurdistan and see for themselves the numerous opportunities that exist here which can bring a huge return on investment. Telecom chief calls for united global efforts against IS one of Kurdistan s biggest business success stories is Korek telecom, founded in 2000 by the current chairman Sirwan Saber Mustafa, who is bullish on the region s future but makes the convincing argument that it cannot reach its full Sirwan Saber potential without the Mustafa, West helping the Kurdish armed forces put an Chairman of Korek Telecom end to the threat from islamic State (is). the international community has to help the Peshmerga if they want to save people in Western countries as we are the only ones who are fighting IS, he says. if the region is not stable, there will be no foreign investors coming to Kurdistan. We have an excellent business environment and adequate laws to promote investments in the country, but we first need to fight IS with enough resources, weapons and, ammunition. as the head of the oldest telecoms operator in iraq, Mr Mustafa has the experience and knowledge of what the country and the Kurdish region require to go forward, including foreign investment. When we started in Kurdistan, the country had no telecommunications infrastructure whatsoever, so we built everything that was needed to develop the best possible network for regular customers and businesses alike, he says. now, Korek is willing and able to make the best out of this business environment to grow and contribute to the Kurdistan Region s progress, adds the company s chairman. Mr Mustafa points out that much more needs to done. although the telecom community has tremendously boosted development in Kurdistan and iraq, he says, the lack of good and modern infrastructure still offers a lot of opportunities in that sector. Foreign affairs build confidence with international allies Shared values strengthen UK ties and open opportunities We see them as true friends KURdiStan has come a long of our democracy, who want to way over the past 30 years, promote democracy in Kurdisfrom a largely unknown backtan, and these are our expectawater in a pariah state under tions from our friends in the Saddam Hussein to a dynamic international community to Middle eastern region and a come help us build and develop willing and welcoming ally of our institutions, he explains. the West. the UK is also taking part in We lived in isolation but Kurdistan s economic developnow we are interacting with the ment, with many British comoutside world, notes KurdisFalah Mustafa tan s Minister of Foreign affairs, Bakir, Minister of panies involved in everything from banking to designing vital Falah Mustafa Bakir. and we Foreign Affairs infrastructure, such as erbil s have so many new friends amazing airport to getting the region s around the world and especially in eumain earner of badly needed foreign currope including the United Kingdom. a key player in ensuring that those ties rency the oil sector back in action. our future cannot be built in isolation, with Britain remain strong is the UK s allmr Bakir says. We need partners to have Party Parliamentary Group on Kurdistan, confidence in us, to present Kurdistan to the members of which visit the region, the world and show what we are capable publish reports and advise the Kurdish of delivering. We want these international and British governments on a range of partners to help us help ourselves. issues affecting both. Mr tahir knows the UK well as FoR decades there has been he studied there and says when a close bond between the British he arrived to take up his diploand the Kurds, who were deeply matic post it was like coming admired for their resolute bravery, home, adding that his hosts independent spirit and strong have been receptive to Kurdclan-based society. istan s concerns, as well as its Keeping those sentiments opportunities. alive and helping further promote We have three main challenges: Kurdistan s relations with the the economic problems stemming United Kingdom is the job of Karfrom the fall in the price of oil and wan Jamal tahir, the KRG High Karwan Jamal meeting the government s budgetrepresentative to the UK, who Tahir, the KRG says it is a fairly easy task. High Representa- ary needs; fighting the terrorists of is who have killed some 1,300 of We do not really need to tive to the UK our fighters and wounded another talk that much about Kurdistan 7,000; and caring for the 1.8 million refugees because the Kurds are well known by the from that conflict, he says. international community, and especially by nevertheless, he is quick to add that debritain, he explains. spite these challenges, Kurdistan is also a the region has built up excellent diploland of opportunities for British companies matic relations with the outside world and seeking to invest, not only in the petroleum democratic nations like the UK, with which sector but also in ict, real estate, agriculwe share values such human rights, the rule ture, industry and tourism. of law and women s empowerment.

4 4 INDUSTRY Qaiwan shows potent reasons to invest Qaiwan Group is a major partner in reshaping the nation and bolstering the economy with diversity and elite talent THE QAIWAN GROUP is a diverse network of different business interests involved in industries as varied as construction, trade, oil refining, energy, real estate and hospitality. However, it is recent growth in the energy and power sector that has made Qaiwan Group representatives particularly pleased. In terms of downstream, there are two big refineries in Kurdistan, and we own one of these, the Bazian refinery, says Saad Hasan, Chief Executive Officer of the Qaiwan Group. It currently produces 34,000 barrels per day and we have an expansion phase, which will add another 85,000 barrels per day. We are targeting to achieve a capacity of 125,000 barrels in two years from now. For energy, we also have the Bazian Power Generation Plant project, which will be completed in the first quarter of In terms of market share in Kurdistan we have 40 per cent in refining and 15 per cent in power generation. Based in Kurdistan Region, the Qaiwan Group has rapidly expanded into an international corporation with offices in Iraq and the United Arab Emirates. Energy and power are the industries that are most commonly associated with Qaiwan, but we believe that the construction and real estate sectors have also played a key part in the growth of the group. We are renowned and proud for our high quality development projects, explains the CEO. Mr Hasan also points out that the company has been diversifying its investments across all types of oil-related activities, such as its ownership of storage tanks, oil tanker trucks and oil tanker vessels. Over the last 10 years we have also established relationships with all of the global oil traders. We know how to optimize, how to add value and, most importantly, we perform to international standards, he says. In addition, we also serve the retail and wholesale domestic market in Kurdistan for oil products, such as gas oil and gasoline, which we import from international markets. We also buy products from within Kurdistan and the rest of Iraq which we can export to the international markets. He adds that a Dubai-based office also handles oil trading. As a group, we have diversified our projects enough so that we are not wholly dependent on oil prices alone Saad Hasan, CEO of the Qaiwan Group Qaiwan executives say the business has made significant strides over the past decade. Qaiwan has hired elite talent and located specific investment opportunities that have helped it grow rapidly. The group does not outsource any of its labour something that Mr Hasan believes enhances Qaiwan s overall competitiveness when it seeks new opportunities. For the Kurdistan Region, Qaiwan s success has led to new employment opportunities for the estimated 8.35 million people who live in the area. Through our projects we create a lot of jobs, both directly and indirectly. The Qaiwan Group currently has more than 2,000 permanent employees, and at any given time there are tens of thousands of sub-contractors working for the group, creating employment opportunities in the domestic market, says Mr Hasan. Qaiwan also generates revenues outside Kurdistan, the majority of which we reinvest back into the Kurdistan economy through our various projects. THINK KURDISTAN. THINK QAIWAN. Qaiwan Group has built its reputation as one of Kurdistanʼs industry leaders through its dedication to delivering the highest levels of excellence in every aspect of its business. A forward-thinking company, Qaiwan Group prides itself on being an industry innovator, incorporating local and international expertise to ensure it can continue to expand into new territories in Iraq, the Middle East and around the world, and effectively compete on the global stage.

5 5 INDUSTRY The company is aiding Kurdistan s ongoing development programs and rapid economic growth by investing in the region s infrastructure. One such project is the expansion of the Bazian oil refinery on the coast of Kurdistan, 25 kilometers (15.5 miles) outside Sulaymaniyah. Qaiwan leaders say they hope to use the expanded oil refinery to produce as much as 125,000 barrels per day. The project is set to finish in three to four years. It is at the beginning of the expansion phase with significant investment having been already made in completing the FEED design, purchasing land and completing site preparation ahead of construction commencing, explains Mr Hasan. The project investment will be in excess of $1 billion and a large part of the investment will be our own equity. Along with the power and energy sector, the Qaiwan Group has continued to enjoy international success through a number of other ventures. The company s real estate arm, for example, is responsible for building the Qaiwan Towers Mall, a soaring twin-tower skyscraper and interconnecting shopping centre. As a country with an oil-based economy, the lower oil price will have a direct impact on the revenue that the government receives. When it comes to Qaiwan, any impact on the Kurdistan economy can impact consumer spending on discretionary items, but we have sales in our real estate projects and consumer goods division that have remained resilient during the last two years, comments Mr Hasan. As a group, we have diversified our projects enough so that we are not wholly dependent on oil prices alone. So we are indirectly affected by other stakeholders dealing with Qaiwan, but we are not as affected in terms of our own business. Mr Hasan remarks that oil prices are expected to remain low over the next two years, though he adds that these numbers can be hard to predict. Regardless, Mr Hasan remains bullish over the prospect of oil price increases in the future. He believes a rise in oil prices will lead to more investment in Qaiwan and Kurdistan. We are an incredibly resource-rich country, so once the oil prices recover, there will be further opportunities for both Kurdish and international investors. As a Kurdish company we are here for the long term and will continue to invest during the entire economic cycle, he explains. As a Kurd, Mr Hasan says he takes great pride in the area s dramatic improvement over recent years. The Kurdish economy has posted growth rates as high as 12 per cent in this decade alone. If anybody had said at that time, that the country would be like what it is now, and there would be a company like Qaiwan doing what it does now, it would have been a dream, he says. I am proud that the country grew very fast and to have witnessed the change of culture of our people as it has not been easy. We grew because we had oil revenues and money. But how do you create an environment to improve and develop the culture of people in line with the fast-growing pace? People managed to adapt culturally to the country that was developing at such a speed, Mr Hasan explains. I think this is partly due to our very unique democratic environment, where people speak their mind, they criticize the government and nobody is killed for that. There are small issues and tensions but, to me, it is all a healthy democratic process that we are all going through, adds Qaiwan s CEO. People openly criticize the policies in Kurdistan and nobody could be questioned for that or get into trouble. I know that in Europe or the US, it is a basic right to have free press, but in this part of the world, for me it s a huge step and progress for Kurdish people and Kurdish institutions to be at that stage. For this success to continue, Mr Hasan says Qaiwan and Kurdistan are always on the lookout for international funding. He urges banks and investors to become active in Kurdistan. Kurdistan is an asset rich country which requires significant amounts of foreign capital to allow those assets to be developed and transported to the international markets, he says. These partnerships will provide us with the capital to invest in advanced technologies and equipment and the continued development of our people so that we remain competitive against our international peers. We already have experience of this at our refinery and power plant projects where we have multicultural teams operating plants to international best practices. The Qaiwan Group aims to soon be producing goods and providing services for people around Kurdistan and Iraq. In the next five years, we will try to make Qaiwan known to every single individual in the region, by having Qaiwan produce and provide products and services that are used by as many people as possible, says the CEO. QAIWAN TOWERS SULAYMANIYAH HEIGHTS BAZIAN REFINERY BAZIAN POWER PLANT QAIWAN CITY The 25-storey twin towers feature an office block, a five-star hotel and a premium shopping mall to create an outstanding business and leisure complex. Qaiwan Groupʼs newest and the most ambitious project to date has created a modern community in a lush, green oasis easily accessible from the city center. One of Kurdistanʼs two major refineries, Bazian currently produces 34,000 bpd and a new US$1bn expansion phase will raise its capacity to 125,000 bpd. The Bazian Combined Cycle Power Plant project will soon be completed and use the worldʼs latest technology and environmentally friendly processes. The landmark project offers an enhanced quality of life and family-oriented facilities designed to appeal to both homebuyers and property investors alike. HEAD OFFICE: 4th Floor Sulaymaniyah Mall, Iraq T: contact@qaiwangroup.com

6 6 ECONOMY Multifaceted one-stop shop seals historic deal with its aptitude for business firsts Ster Group has attracted the attentions of major international partners with its commercial foresight and preparedness Located in the Kurdish city of Erbil, the Ster Group comprises a diverse network of business ventures and, according to the company s Chairman and CEO, Sarwar Pedawi, the group has been making in-roads into a variety of industries, such as oil and gas, real estate, construction, health care and pharmaceuticals, hospitals, security, a water factory, and telecommunications. At the turn of the century, I started as a small trading company here in Erbil. At that time, it was called Ster Company. A few years later, we began importing goods that specifically met the needs and demands of the people and businesses in the region. This provided a base which allowed us to advance rapidly and increase our quality and services. We also expanded into different sectors of the market, explains Mr Pedawi. In 2004, Ster Company began attracting the attention of many international companies. Those companies became our partners, which led me to change our name from Ster Company to Ster Group, says Mr Pedawi. The company s influence throughout Kurdistan has risen and today its vast interests have led it to develop a number of projects that have been both financially profitable for Ster and beneficial to people in the entire region. Today, Ster Group is one of the leaders in the oil and gas industry and we are active in all related areas such as trading, services, chemicals and security, etc. We have been very fortunate but also very strategic. What has made us what we are today is our commitment to continual growth and to our people. What some businesses tend to forget is that you can serve your people, develop your country, and be successful at the same time, says Mr Pedawi. Mr Pedawi was particularly excited about a deal the group struck with Coca-Cola years ago to bring one of the beverage giant s factories to Kurdistan. We were the only company in the region to successfully form a partnership with Coca-Cola, he says. Ster Group convinced Coca-Cola to come to Kurdistan and we invested together to build a factory here. For the first time in history, Coca-Cola was being produced in Kurdistan. In fact, they even printed the advertisements in Kurdish. Ster Group was the first company to make such an accomplishment. The chairman and CEO also cites Ster s expansion into the development of telecommunications infrastructure more than decade ago as an example of its ambition. We established a telecommunications company around years ago called Tarin- Net with some Americans to provide wireless internet, he explains. We began with wireless because there was no infrastructure in place for landlines. We wanted to provide our people with something quick, high-tech, but affordable. Mr Pedawi states that connecting Kurdistan with the rest of the world was costly and time consuming, but internet is a basic human right and you cannot put a price on that. He adds, Much like our business approach with the oil and gas industry, we have been involved in every aspect of bringing internet to our people. For example, in the city of Erbil, we erected towers in only a couple of weeks, which we then connected to satellites giving us internet for the entire city. TarinNet became the leader of wireless internet in Kurdistan. We then branched out into fibre optics. We needed outside investors to bring it into the country and they needed us for the distribution and sales. A company like ours will buy hundreds of thousands of megabytes and Ster Group is one of the leaders in the oil and gas industry and we are active in all areas such as trading, services, chemicals and security, etc. Sarwar Pedawi, Chairman of Ster Group distribute it in different ways. Today, TarinNet specializes in everything from internet, data, IT, networking, and numerous other services. According to Mr Pedawi, this expansion has helped turn telecommunications into one of the most powerful sectors in the Kurdish economy today. But the Ster head still recognizes the vital importance of oil and gas in Kurdistan. Despite the growing momentum of telecommunications, oil and gas will always be this region s bread and butter, he says. Ster followed the European and American model we began with one gas station/mini-market where you could wash your car, change your oil, buy some groceries and get other basic services at one place. Then we aimed higher because we were able to finance bigger projects. This eventually led to a power plant, a refinery, and an oil and gas storage facility with the capacity for 1-2 million barrels. We also provide oil-related services, which we initially knew nothing about but learned very quickly from our partner companies that came to the region. As the oil industry and economy grew, security became an issue. As a corollary, we started a security company: Ster Security Company. Each international oil company has different requirements for the security of their people. For example, some required specially trained security so we brought in former military ex-pats. Some companies needed dogs for detection of explosives and dangerous materials, so we bought the best dogs in the world from the Netherlands and America, some of which cost us $60,000-$70,000 each. Currently, Ster Security Company alone provides the majority of the dogs for security in the region and we employ around 2,000-3,000 people. We are able to anticipate and prepare for tough times. This makes us reliable and dependable. Also, our business model is a one-stop shop type so you can get everything in one place. Throughout these professional endeavours, Mr Pedawi says he has continued to share a unique connection to the problems faced by the people of Kurdistan. In the 1970s, the Ster chairman and CEO fled the region for Europe. He spent much of the next decade in the Netherlands, where he gained an education and eventually returned to his homeland. Mr Pedawi points out that he is grateful and thanks the people of the Netherlands for treating [him] like one of their own. Upon his return, Mr Pedawi s business interests led him to start his company and later construct Ster Tower, a professional office building in Erbil. When I built Ster Tower it was the first of its kind in Kurdistan, he says. I studied engineering in the Netherlands, and I served as captain in the Dutch Army during the uprising [against former Iraqi President Saddam Hussein] in I came to the Middle East and spent time in Turkey and Kurdistan. I saw the terrain and how the infrastructure was set up. Ster Tower was my first building so it is very close to my heart. I learned from the Netherlands that whatever you do, you have to do it well, but it does not necessarily mean that it must be expensive. Ster Tower is safe, secure and has everything a business needs. Ster Tower is also home to many foreign consulates and embassies. It has all the latest, state-of-the-art equipment, reliable energy and 24-hour security. His personal and professional experiences have imbued in Mr Pedawi an obvious sense of pride in Kurdistan, a semi-autonomous region that shares a 620-mile border with territory currently under the control of Islamic State (IS). Kurdistan and particularly its military force, the Peshmerga, have earned praise for being at the forefront of the struggle with IS. Thank God for the Peshmerga, comments Mr Pedawi. They are essentially volunteers who are fighting for the survival of their people. They have not been paid in a very long time. They have families and are the sole source of income in many cases. Mr Pedawi reserves praise specifically for Kurdish President Massoud Barzani. Kurdistan s leader has been in office since 2005 with his administration and has enjoyed stability and substantial international support. However, the Barzani family has been fighting for Kurdish independence for nearly 100 years. The Kurdish government is succeeding as a result of the leadership of President Barzani. The Europeans, especially France and the coalition, support him and Germany gave him missiles. But still, it s not enough to defeat this enemy, he says. Ster s chairman adds that he wished more politicians would have heeded President Barzani s warnings last year to take the IS threat more seriously. Millions of people are going to the West as refugees, he says. So much money is being spent to provide security and basic needs such as shelter and food for the refugees. If this had been addressed in the beginning people would not have fled, which would have saved the West billions of dollars. Mr Pedawi says he is always trying to find new ways to expand upon Ster s success, though he adds that his ambition is only limited by Iraqi Kurdistan s lack of independence. The region has long debated the prospect of becoming independent from Iraq. I would like Kurdistan to become independent so that the lives of our people would improve and we could prosper as a country. This would be a dream come true for all Kurds. I would also like to see Kurdish businesses prosper as Ster Group has so that we could compete on a global scale and be traded on the stock exchange, he says. We are always looking forward and thinking ahead. Ster Group is constantly on the lookout for new opportunities. This is what makes us leaders in the industry.

7 7 TELECOMS Telecoms prove investment potential Newroz Telecom s impressive growth and new infrastructure reveal the huge scope for investment and development on a MoUntain top in the north of iraqi Kurdistan, a young shepherd turns his attention away from his woolly charges, pulls out his mobile phone and calls a cousin in the city of erbil, far to the south, to discuss a relative s upcoming wedding. and the call easily goes through thanks to the latest technology brought to this ancient land by the Kurdish telecoms company newroz, founded just over a decade ago and already one of the leading operators in the Middle east. an impressive achievement in a country that over the previous 35 years had suffered three wars, international sanctions, misrule and neglect by the previous regime and isolation from the global community. But with iraq s return to the world stage and a new government that recognized the country needed to catch up, and fast, in many areas especially in telecommunications, information technology, the internet and media outlets companies such as newroz took up the challenge. now, the company and others like it are providing access for consumers to a whole new world of three e s of the internet: education, e-commerce and entertainment. When we started back in 2007, internet penetration in iraq was zero and just 1 per cent in iraqi Kurdistan, says newroz founder and chairman Kawa Junad. now the penetration rate is 30 per cent and the company plans to increase it to 80 per cent in Kurdistan and the rest of iraq. In a deal that benefitted everyone, the company offered the iraqi government to replace the country s antiquated copper wire network with the latest fibre optics and connect it all to the world. newroz has also built a new code division Multiple access network, installed 5,000 kilometres (3,107 miles) of fibre-optic cable, set up a high-speed broadband adsl network and introduced 4G to iraq. From the first, we knew that we would have to come up with a five-year, long-term plan because we knew there was a huge demand for data here in Kurdistan and in all iraq, the chairman recalls. We also knew that Kurdistan didn t have any infrastructure and everything would depend on that so we laid all that fibre cable and we are seeing the benefits for everyone. equally impressive is the fact that all this had been achieved in what can be a hostile physical environment. the Kurdistan region is largely rugged, mountainous terrain and much of the rest of iraq is desert. adding in the security situation and other factors would give many entrepreneurs pause. nevertheless, growth prospects are certainly good. the median age in Kurdistan is 20 and with the younger generation totally dedicated to the internet and especially social media, the use of cutting-edge technology such as that provided by newroz is expected to steadily increase. However, this also presents risks and challenges as social media, particularly in the Middle east, can be used to spread dangerous ideologies and recruit followers for those same doctrines. it is a risk and we are responsible, Mr Junad admits. We are delivering social media and content to subscribers and there can be a challenge regarding security because it can be used by anybody. this is a good and profitable business and we are trying to do something to develop the telecom sector in our country, but unfortunately there are people who will misuse these tools. Our foreign partners want to be part of our network here and even perhaps expand into neighbouring countries Kawa Junad, Founder and Chairman of Newroz Telecom in all its projects, the company uses international partners of sterling repute such as Siemens, alcatel-lucent, nokia, cisco, ibm and others. its local clients include leading banks, hotels, universities, international companies and organizations, and even other telecom companies. our foreign partners want to be part of our network here and even perhaps expand into neighbouring countries, Mr Junad says, adding that he constantly keeps up with developments in the sector so as to stay one step ahead. We don t invent things, but we do follow closely what is happening and i concentrate on the United States because it is at least two years ahead of europe and three years ahead of us. So i study and follow the technology news, and sometimes i travel to the United States to see what exactly they are trying to do because wherever big countries go in technology, the rest of the world will follow, he says. despite the pitfalls of having an economy almost entirely dependent on the price of petroleum, Kurdistan should weather the latest volatility in the oil market and growth in the telecom sector is expected to continue. We are still growing because there is a huge demand for the internet and newroz is an ambitious company. i also feel that what s happening to the economy of Kurdistan can only make us stronger, he says. as a country, we face the most critical situation right now but hopefully in the future these troubles will pass, the price of oil will go up and the government will also find more sources of income. We ll be okay. Newroz founder and chairman Kawa Junad Kawa Junad looks at Newroz Telecom s run of achievements SINCE its beginnings following the US-led invasion, Newroz has grown rapidly into one of the region s key telecoms players. Could you tell us how this all came about? After the conflict, the telecoms infrastructure throughout iraq basically didn t exist and the situation was even worse in the northern region of the country. So newroz focused on the issue and especially fibre optics. Since then, Newroz has laid 5,000 kilometres (3,107 miles) of fibreoptic cable in the region while connecting all of iraq with international telecommunications companies around the world with fibre-optic cable. You could say telecoms in iraq is now comparable to that in the most advanced countries. A state-of-the art telecoms sector certainly benefits the private sector, but how have Newroz s efforts helped the public sector? there has been a vast improvement in government communications. through our secure fibre-optic cables, now all the Ministry of the interior departments are connected, as well as the airports, passport control offices, etc. We ve also provided the same service to the public health system, as well as to other government departments. there is now what could be called e-government, which would not have been possible without this infrastructure. What has been Newroz s biggest triumph? the most rewarding advance we have made was establishing our 4G Lte company, Faslink, to provide the latest technology throughout the entire northern region. We were honoured this year at one of the most prestigious telecommunications events, capacity europe, for Best Project in the Middle east after implementing 4G Lte internet in a region that was so behind in the sector and still facing such political and social challenges. What is your strategy regarding the future? in the telecoms business, you have to have a firm vision because technology is constantly evolving and changing. So you must always think about the next five years, which is what we are doing now and taking steps that will have an impact five years down the road. We re planning to cover all of iraq and link up globally by introducing fibre bridging all the way from the southern city of Basrah up to Frankfurt. this will change the route as now all the submarine cables pass through egypt and if there is a break no reliable backup exists. it s a huge project that would change the telecoms game in this region and give iraq one of the best strategic positions in the world. all the traffic coming from the Far East would pass through iraq because of less latency, better quality and better price. How will these plans affect the consumer? newroz is trying to create new ways to increase the internet penetration rate in the region. currently, the rate is 30 per cent compared to less than 10 per cent just a few years ago. We are striving to boost that per centage to at least 80 per cent in the northern region and eventually the entire country within the next 18 to 24 months. All this will take a lot of money so are you actively seeking outside investors? newroz plans to issue an ipo very soon and we may start in London or dubai because people here are still not knowledgeable about ipos and shares. We are already working with a major international bank to start the process and we hope the ipo will be issued in the next 12 months. Could you sum up what you believe are the keys to Newroz s success? easy: our people and our commitment to quality. We started with just four employees and now we have over 1,000, including locals and expats from around the world. i invest more in people than in technology because your employees can make technology for you and building capacity is the key to the future of our region. our companies always provide quality. We don t think about how much we can get, or price, or the number of customers. First, we think about quality. When there is a quality product, customers follow. this is our vision.

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