Iranian builders’ chief blames sanctions for failure to expand in Iraq’s housing market

The head of a major trade association for large-scale builders in Iran is blasting sanctions for blocking the country's entry into Iraq's housing market, urging the two governments to come up with a solution.

Blaming sanctions for restricting financial transactions and complicating the issuance of guarantees needed for contracts and tenders, Iraj Rahbar of the Mass Housing Builders Association told the semi-official ILNA news agency that these hurdles are why Iranian companies struggle to enter the Iraqi market.

"One of our problems is the issuance of guarantees, which we need for participating in tenders, and the maximum period for this is 10 days. However, we are not able to do this within this time frame, and even if a guarantee is issued, Iraq does not accept it," Rahbar said in the interview.

The head of the trade association admitted that the issue is not limited to Iraq, as other countries also do not accept Iranian guarantees.

Tehran faces sanctions primarily due to concerns over its advancing nuclear program, ballistic missile development, support for regional armed terrorist groups, and domestic human rights violations. These actions are seen by the U.S. and its allies as threats to regional stability and global security.

Iran is already a key player in Iraq's housing sector, as emphasized by Bahman Abdollahi, head of Iran’s Chamber of Cooperatives, and Osama Abdul-Redha Saad, a member of the Basra Council in Iraq.

In a recent meeting between the two, Abdollahi proposed constructing 150,000 housing units in Iraq, expressing readiness to supply materials, construction services, and consumer goods to support this initiative. Saad, in turn, implied that further collaboration between Iran and Iraq in the construction sector would be a logical step that could enhance both countries' interests.

Rahbar similarly said Iranian companies are fully equipped to handle housing projects in Iraq and have no technical hurdles, emphasizing that they have long been prepared and willing to enter the Iraqi market. Alluding to Iran’s unsuccessful attempts to break into Syria's construction market despite Tehran's readiness and efforts, Rahbar said that despite cooperation protocols being signed, “the Syrians did not commit to it and eventually were not willing to cooperate with Iran and Iranian companies, showing no interest."

"Given that we share a border with Iraq, commuting for project execution and the export of engineering services would be easier. However, we face challenges in exporting engineering services to Iraq," Rahbar said.

Rahbar noted that Iran previously relied on the Islamic Development Bank for financial guarantees and transfers with Iraq, leveraging its status as a major shareholder. However, he pointed out that this avenue of support is no longer available, likely due to the escalating effects of sanctions.

Over the past year, Iran's accelerated nuclear enrichment, ballistic missile development, support for proxy groups like Hezbollah, crackdown on domestic protests, supply of drones to Russia, cyberattacks, and its strikes on Israel have only deepened tensions with the West, making the removal of existing sanctions unlikely.

To overcome these challenges, Rahbar called on the governments of Iran and Iraq to establish specific agreements or frameworks to facilitate smoother economic cooperation and mitigate the effects of sanctions on their bilateral trade and business activities.

"The governments of Iran and Iraq must make solid agreements on this matter and provide mutual assurances for these agreements so that Iranian companies can enter the Iraqi market without risk or with reduced risk," he said.