Iraq sets sights on e-commerce opportunities

29 July 2019

Years of conflict have ravaged Iraq’s economy and infrastructure. As it struggles to rebuild, the country is keen on tapping e-commerce’s potential.

Iraq is laying the foundations for e-commerce as it rebuilds its infrastructure after years of violence, government officials said during a high-level dialogue on e-commerce and the digital economy on 28 July in Baghdad.

The event kickstarted weeklong consultations that are part of UNCTAD’s assessment of the country’s readiness to engage in e-commerce, the first such exercise in a non-least developed country.

Nearly 100 people drawn from Iraq’s public and private sectors exchanged views on how to overcome the challenges that hinder e-commerce in the war-affected country.

“We have to build trust among consumers and create an enabling legal environment,” minister of communication, Naeem Al-Rubaie, said.

He emphasized the need for fitting legal frameworks and legislation to regulate e-commerce and protect the rights of online sellers and buyers.

Naeem Al-Rubaie
Iraqi minister of communication, Naeem Al-Rubaie, speaking during the high-level event on e-commerce and the digital economy in Baghdad on 28 July

Hurdles and opportunities

“We are pleased to help Iraq assess hurdles and opportunities in the e-commerce sector as it embarks on national reforms to harness ICT for its reconstruction,” UNCTAD’s director of technology and logistics, Shamika N. Sirimanne, said.

The UNCTAD assessment will provide a roadmap for developing e-commerce in the country and complement the government’s initiative to upgrade ICT infrastructure, build digital trust by improving cybersecurity and support e-government.

The assessment builds on a survey recently conducted among a sample of public and private sector respondents.

The survey revealed the need to work on areas such as e-payment, ICT infrastructure, regulatory frameworks and the logistics system to create a conducive environment for e-commerce in Iraq.

Decades of conflict have ruined the infrastructure needed for e-commerce to flourish in Iraq. Telecommunications infrastructure is worst hit.

Also, Iraq has low rates of technological literacy and lacks a coherent national strategy, regulations and investments needed to participate in the digital economy.

Yet, with 60% of the population under 25, Iraq has an enormous untapped potential of using e-commerce for development. 

Higher rates of smartphone usage, higher internet access and higher competition between ICT providers would enhance e-commerce in Iraq, most survey respondents said.

In addition, solutions for safe and easy e-payment are highly needed in Iraq. The most common payment methods are cash-on-delivery and bank transfer, with limited credit card use.

E-payment solutions are needed to create a conducive environment for e-commerce, 89% of the respondents from the public sector said.

Iraqis are also concerned about regulation. More than 70% of the respondents expressed strong approval for regulations on privacy, consumer protection and cybercrime to enhance trust in e-commerce.

They also noted that logistical services required for e-commerce are inadequate, with more than 60% of them expressing the need for easier customs clearance, electronic shipment tracking and a good local shipping network.

Eighteen assessments done

Iraq is the latest country to benefit from UNCTAD’s eTrade Readiness Assessment programme that helps countries to identify the challenges and opportunities associated with e-commerce and put in place the right strategies and interventions. 

The assessment to be finalized in December is funded by the International Islamic Trade Finance Corporation, through its Aid for Trade Initiative for the Arab States programme, and implemented with the Universal Postal Union under the auspices of Iraqi ministries of communication and commerce.

Over the past three years, UNCTAD has conducted 18 e-trade readiness assessments and another seven are ongoing.