Dubai, United Arab Emirates – Iraq is set to spend around $6.4 billion annually on information and communication technology (ICT) by 2008, according to a moderate growth-rate scenario of the Iraqi economy devised by Madar Research Group. The projection is part of a comprehensive study on current ICT profile and future development of Iraq’s ’knowledge economy’, which in 2008 will witness up to triple-digit growth in some areas, such as mobile-phone and Internet use, compared to 2002.

The Dubai Media City-based organization forecasts Iraq to annually spend around eight percent of its gross national product (GDP) on ICT-related development projects between 2003 and 2008. This ratio, which is equivalent to world average ICT spending and much higher than that of the region, will be fuelled by Iraq’s need to build from scratch an infrastructure that is either heavily damaged by the recent US-led war on the country, or made obsolete by over a decade of strict UN sanctions.

To quantify the resources that Iraq is predicted to spend on ICT development and consumer products, Madar Research devised a GDP growth forecast model that draws on the characteristics the Iraqi economy shares with Saudi Arabia’s, while outlining the course the Iraqi economy is likely to take under its own variables. The result was three different scenarios and levels of GDP growth that share the same rate of IT spending.

One of the parameters used in the model was Iraq’s highest and lowest points of economic performance in the last 25 years as compared with the economy of Saudi Arabia. In 1979 when Iraq’s GDP was the highest, it constituted 48 percent of Saudi Arabia’s GDP then. In 2002, Iraq’s GDP was only 16 percent of Saudi Arabia’s.

"There are numerous internal and external political and economic factors that can shape the performance of Iraq as it joins the global economy. This is aggravated by many uncertainties which add to the complexity of predicting the country’s economic performance" says Abdul Kader Kamli, president and research director of Madar Research Group.

"However, we have built our GDP projections on the most solid components of the economy, such as oil production, and other vital and promising elements. To accommodate the political-economic variables our analysis has led to three scenarios for GDP growth over the next six years. Even the low-growth scenario brings huge opportunities for ICT providers and investors. This research is Madar’s first on Iraq, which we hope will carry maximum benefit to the business community," said Kamli.

The Iraq report, which is fully published in the June issue of Madar Research Journal, forecasts impressive annual growth rates in the number of mobile phone users; 158 percent, and Internet users; 100 percent, over the period 2002-2008. Meanwhile, the number of fixed-line subscribers and installed personal computers are expected to grow annually by 33 and 47 percent, respectively.

The forecast made in the report gives more weight to certain ICT parameters which are more essential and basic, and least to be influenced by dramatic events that may take place in Iraq, such as growth in PC installed base, numbers of mobile and fixed-line subscribers, and the number of Internet users. Software and solutions, for instance, will not have a high turnover, and will be of low priority for Iraqis if economy undergoes a slow growth.

Online subscribers to Madar Research Journal can access the full Iraq report on www.madarresearch.com.

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About Madar Research Group
The Madar Research Group is a Dubai Media City registered company and part of the Bin Zayed Group. The company was established in June 2002 to carry out primary and secondary research on the Knowledge Economy in the Arab world. Products and services from Madar Research Group include Madar Research Journal, Annual Research Books, Custom Research, Market Intelligence, Industry Newsletters and consultation.

For further information and queries, please contact:
Telephone: +971-4-3099415 or 3099401
Fax: +971-4-3328019
email: jarrah@madarresearch.com
or info@MadarResearch.com
www.madarresearch.com


Abdul Kader Kamli (research Director)
Fawaz Jarrah (Editor)
Tel: 04 3327771

© Press Release 2003