Almost the entire Iraqi infrastructure needs to be rebuilt. A massive reconstruction effort is underway as Iraq emerges from three wars, a decade of sanctions, and 30 years of neglect. The Government of Iraq has issued mandates for the preparation of plans for major infrastructure projects including roads, airports, railways and ports. At least 1.5 million housing units and thousands of schools and hospitals will be rebuilt. Hospitality facilities are also much in need. A massive investment program is required to accommodate the pilgrimage traffic to the Shia holy cities of Najaf and Karbala, which is projected to increase five-fold in the next few years. The needs of 32 million consumers must be met. One of the greatest natural resource wealth concentrations in the world will fund all of this, both directly and indirectly.

Iraq's reserves are subject to dramatic upward revision in coming years as significant exploration recommences. Based on estimates from oil industry and Government of Iraq sources, we believe that Iraq's oil contracts and agreements will require approximately $50bn of local investment during the next five to seven years. Broader reconstruction needs to bring Iraq's infrastructure and standard of living to levels commensurate with its natural wealth are expected to exceed $200bn over the coming decade.

After decades of economic mismanagement and a tumultuous post-invasion period, the business environment in Iraq is daunting in many ways. Violence and corruption continue. NGP is in Iraq for the long term. We adhere to the strictest ethical standards and for all of our employees, both foreign and Iraqi, we have a zero-tolerance policy towards any form of corruption.

Yet Iraq's economy is open and liberal by regional standards. Corporate tax rates are low, and Iraq has established a National Investment Commission to facilitate foreign investment in Iraq, and licenses granted by the commission carry significant tax and other benefits, including the right to repatriate capital and profits, customs exemptions on imported capital goods, and long-term leases.

At approximately 32 million, Iraq's population is larger than those of its Arab neighbors in the Gulf region, such as Saudi Arabia, Kuwait, Bahrain, Qatar, and the UAE. Vestiges of a generation of socialism under the Ba'ath party continue to taint Iraq's economy, but Iraq's people are educated, tough and enterprising. Iraq's entrepreneurial character, visible in bustling marketplaces and city centers throughout the country today, has deep roots. The first banks and joint stock companies were in Iraq, and Baghdad is historically one of the world's great centers of international trade and finance.

The international business community has begun to discover Iraq's potential. The substantial reduction in violence following the US-led troop "surge" in 2007 and 2008 has brought with it a dramatic increase in foreign investment in Iraq. In our opinion investment into Iraq will soon dwarf flows to lesser oil-and-gas economies such as Kuwait, Qatar, Bahrain, the UAE, Russia or the various African oil provinces.