Iraq debates foreign investment policies

While the Bush administration flogs a "stay the course" message and the media focuses primarily on the troop withdrawal issue, the nuts and bolts of trying to get Iraq on its feet are largely overlooked. The economic efforts, in particular, are what will really make or break the nation (assuming it can avoid an all-out governmental collapse). Which is why I would really like to see more analysis on issues like foreign investment there.

According to the article, Iraq's parliament will probably approve a law that allows non-Iraqi investors to have 100 percent ownership of companies, untaxed profit transfers, and 40-year rent leases (with the significant exception of natural resources -- including oil). Most troubling to me is the untaxed profit transfers. While the objections in the article are mostly about the ownership element, Iraq clearly needs foreign investment to help its economy, and I doubt companies would risk investing if they couldn't have ownership control. But I would think it'd be possible to require some level of reinvesting or other benefit to the country and its people, rather than just pulling out all profits to the companies and businesses of other nations.

I'm not an economist, and I'd be curious to hear from people more educated than I. My initial skepticism is based on three factors: first, the law was reportedly written over two years ago, under the Bremer administration of Iraq. Since Bremer's tenure was such an unmitigated debacle, I'm reflexively suspicious of anything that he or his cronies created. Second, it seems there should be measures to keep some of the profits in Iraq. Finally, anything that even gives the impression of Western corporate exploitation is a terrible idea for PR reasons alone.

(Hat tip to Juan Cole for linking the article.)