Erbil Iraq Survey AIRINC 2012

The World’s Trusted Source for Workforce Globalization

Associates For International Research, Inc. | www.air-inc.com

SURVEY REPORT ERBIL, IRAQ

JANUARY 2012

2The World’s Trusted Source for Workforce Globalization

AIRINC completed its first onsite survey of Erbil in November, 2011. Erbil is located in the center of Iraqi Kurdistan, which the Constitution of Iraq defines as an autonomous entity within the federal Republic of Iraq, governed by the Kurdistan Regional Government (KRG). Largely spared the violence witnessed by the rest of the country since the 2003 U.S.-led invasion of Iraq, Iraqi Kurdistan has capitalized on its stability and has attracted commercial investment from around the globe. Most of this investment has been concentrated in Erbil.

Introduction to Erbil

With a population of approximately 1.7 million people, Erbil is a large and rapidly expanding city, although it remains relatively compact compared to other cities of similar size in Europe and North America. Erbil is laid out in a pattern of concentric rings surrounding the old citadel in the city’s center. The distance from the center to the outermost ring (100m Street) is approximately 2.5 miles. However, there is little need for expatriates to venture into the center of town, since most expatriate shopping outlets and housing compounds are located along or near 100m Street, or the outer ring. The Ainkawa neighborhood, or Christian quarter, is located in the north of the city. It is home to some services and shops, as well as a few independent residences

Along 100m Street, outer ring of Erbil and site of many housing compounds and commercial activity

AIRINC SURVEY REPORT ERBIL, IRAQ


occupied by expatriates, but it is much less popular than the 100m Street area. The International School of Choueifat (kindergarten through grade 11) is located about 30 minutes by car north-east of the city near the American Village housing compound.

The Erbil International Airport is located to the northwest of the city, approximately 15 minutes by car from hotels and housing compounds. There are frequent flights to Erbil via major interna-tional airlines. Direct flights from major hubs in Europe, such as Frankfurt, take approximately 4 hours. Ten day visas can be obtained upon arrival at the airport free of charge for many nationali-ties, including those who possess E.U. and U.S. passports. A residence visa for a longer stay must be obtained from local authorities for a small fee. Currently, the Rotana Hotel is the most popular option for business travellers due to its high quality and good security. Other options include the Noble Hotel and the Erbil International Hotel. Security at the Noble Hotel is less robust than at the Erbil International, which maintains a security perimeter (a fenced area with a security checkpoint). There are several hotels under construction, including a Marriott, but opening dates are not yet available.

The climate in Erbil varies widely between seasons: summer is characterized by hot temperatures and little rainfall, and winter is very cold with rain and occasional snowfall. Pollution levels are relatively low, as heavy industry is not present in the region, but an increasing number of cars on the road creates pockets of low air quality during peak periods. Sanitation is not present in all areas; while expatriate compounds are generally clean, open trash pits and littered gutters are present throughout Erbil. Much of this waste can be associated with the high levels of construc-tion throughout the city.

Security

Although largely unaffected by the ongoing threats to personal security that plague Baghdad and other cities in Iraq, security is nonetheless taken very seriously in Erbil, and Kurdish security forces maintain a strong presence in the city. Travel outside Erbil is not recommended without an armed convoy, but within the city limits of Erbil, unrestricted movement is possible via pre-arranged taxi or dedicated driver. Local taxis are available, but since taxis are independently operated by private citizens, many international companies currently restrict employee use due to safety and security concerns. Language is also an obstacle, since most taxi drivers speak only Kurdish and Arabic.

At all major expatriate establishments (hotels, malls, and even some restaurants), security con-sists of armed checkpoints, electronic and manual baggage screening, metal detectors, and/or pat-downs. Access to the airport is protected by concrete barriers, a separate security building, and three different screening stations. Housing compounds also have checkpoints at entrances, and guards may be posted at individual properties within the compounds. With respect to personal security, some western firms do not allow their expatriates to move

Survey Report: Erbil, Iraq


about unaccompanied outside secure areas such as housing com-pounds and malls. However, the risk of kidnapping or violent crime is relatively low, and the presence of a driver is considered sufficient security on trips to and from housing compounds, malls, and of-fices. During the course of the survey, AIRINC surveyors did not experience any hostility or feel threatened by Kurdish citizens, though interactions were complicated by the lack of a common language. In addition, the surveyors were advised that some companies are in the process of reevaluating their security policies to potentially loosen restrictions on staff movement.

Currently, the U.S. government designates Erbil as a non-family post, and work arrangements for most western expatriates are on an “unaccompanied” or non-family basis.

GOODS AND SERVICESErbil is a cash only economy. Credit cards are currently accepted only at the Rotana Hotel and the City Centre Supermarket. The only ATM found by surveyors was at the Rotana Hotel. Most prices are marked in Iraqi dinars, but dinars and U.S. dollars are used inter-changeably at almost all establishments at a fixed rate of 1200. It is common for change to be given in dinars in return for payment in dollars. There are no major international banks in Erbil, but the Kurd-istan International Bank’s website indicates that it offers individual bank accounts in euro and U.S. dollars, as well as international money transfers.

Erbil is in a state of flux, characterized by high levels of construction throughout the city. This has notably altered the commercial land-scape, sharply increasing the availability of goods and services over a relatively short period of time. This trend is expected to continue in the coming years. As detailed below, availability is currently fair to good for most surveyed goods and services categories. There are no sales taxes. Service charges of 10% are added to the final bill for all services and purchases at hotels and most restaurants frequented by expatriates.

FOOD, BEVERAGES, AND TOBACCO There are only a few food markets where expatriates shop, and only one, City Centre, that is comparable to markets found in more developed locations. Located at Majidi Mall in the east of the city, City Centre boasts an excellent range of most food items, including small meat and produce sections. It is also the only food market that

Produce at City Centre

Dry goods at City Centre



provides security, with the exception of small, local markets located within housing compounds. In general, shelf-stable goods and most pantry basics (flour, sugar, etc.) are widely available in international brands. Local fresh meats, fish, and produce are available in limited selection. Specialty meat markets are common, as are produce ven-dors alongside the road, but expatriates mostly frequent City Centre and small markets within the compounds due to quality concerns. A Carrefour market is currently under construction in the Family Mall. Tap water is not potable, even in housing compounds, so the use of large bottles of water is common for drinking and cooking. Alcohol, tobacco, and small snacks are available at small shops along the road to Ainkawa. The selection of beers and liquors is good, but wines are limited. Expatriates are able to purchase alcohol without restriction. Tobacco can also be found in supermarkets and special-ized tobacco shops within the malls.

PERSONAL CARE, HOUSEHOLD SUPPLIES AND SERVICESPersonal care and household supplies are widely available in interna-tional brands. There are few hair salons, and they are located only in the malls. There is a barber in the Noble Hotel. Except for a dry cleaner near the Italian City housing complex, laundry and dry clean-ing services are generally only available in hotels.

CLOTHINGErbil has two large, fully enclosed shopping malls in the east of the city: Majidi Mall and Family Mall. These are the top quality malls, although numerous, much smaller malls are scattered throughout the city. Majidi Mall and Family Mall both have security checkpoints at their entrances. International brand shops, such as Pierre Cardin and Levi’s, abound in both malls. Although it is common for most expatriates to bring most of their clothing, the supply of these goods is sufficient to satisfy most shopping needs and tastes for men, women, and children. Stores have the feel of their counterparts in Europe and North America.

MEDICAL CAREErbil does not yet have medical infrastructure comparable to that found in developed locations, and routine medical care is generally saved for home visits. NMS Nordic Medical Services, located in the Italian City, provides the expatriate population with a host of services through its English-speaking staff, including doctor visits, access to high quality medications, emergency services, and assistance with medivac procedures. The facilities are new and clean, and

Majidi Mall, one of two secure and enclosed malls with international brands

DentCare exam room, featuring new equipment



the level of service is comparable to that found in Sweden. NMS works closely with the local Cardiac Hospital in emergency cases. DentCare is a dentistry outlet located within the Italian City; it is recommended by NMS and provides good quality dental services. Pharmacy items can be found via NMS or at Raz Pharmacy in the Family Mall. Although there are numerous local pharmacies located in the city, expatriates do not use them due to language difficulties and quality concerns. Expatriates requiring care from specialists or in-hospital procedures such as surgery must obtain services outside Kurdistan.

COMMUNICATIONS SERVICESErbil lacks a uniform telecommunications grid. Landline phones are available from a variety of small telecom businesses that provide service only in select areas. These services are not comparable to those found in Europe or North America. Mobile service, however, is of good quality, with a number of providers available in the market. Reliable data and voice services are widely used. There is only one post office, located in Ainkawa. It functions more like a courier ser-vice and did not seem reliable to the surveyors. Businesses gener-ally send a weekly DHL back to the home office, and from there the local post is used. Home internet is available but is very expensive.Home Furnishings and Equipment. Since houses in Erbil are typically unfurnished, renters are responsible for providing all furnishings and nearly all electronic goods. There is a mattress and home goods store in the Family Mall, but there are only a few local furniture out-lets. Furniture must therefore be shipped in or ordered from abroad. International brands of electronics, such as Sony and Samsung, are widely available at specialized stores at both malls, as well as at City Centre Supermarket.

DOMESTIC HELPThere is not a fully developed market for domestic help. It is com-mon for western expatriates to employ a service, such as Falcon Full Service, to provide security, cleaning, and landscaping services for a bundled monthly fee. Alternatively, full-time help is available and often contracted from abroad via a staffing company. A fee is paid to the company, which then arranges for the maid, who is provided with food, housing, and a monthly wage by the employer. The company fee and monthly wage vary as a function of the home country of the maid. It is common to pay a 13th month bonus at Eid. Part-time help is not widely available outside a bundled service.Transportation. Expatriates do not generally drive themselves. Driv-

Street in Ainkawa, or Christian district, and home to some expatriate

stores and services

Health Room at Rotana, one of thefew gym options in Erbil



ers can either be employed directly at a monthly wage or included in the rental price from a company, such as the Falcon Group. Car insurance is not available. Individual expatriates are not responsible for the maintenance of cars if they rent from a service, although services and parts are available through dealerships. New cars are widely available from the west to south quadrants of 100m Street from a variety of dealerships, including Mitsubishi, VW, Nissan, Audi, BMW, and Ford. Other new cars are available through non-franchise dealers. There is no public transportation, with the exception of shared mini-buses, which expatriates do not use.

RECREATION, ENTERTAINMENT, & DINING OUTFew options exist for either supplies or services. There is a small gym in the Rotana Hotel, and the Erbil Sports Center has a number of facilities, including a large weight room and an indoor swim-ming pool. Although a few expatriates were spotted at the latter, it should be noted that it does not have security such as guards or a checkpoint. Satellite TV and internet provids the only access to international media. Internet sites are not censored. There is a small bookstore in the Family Mall, but it has a very limited selection of English-language books. Since there are no social clubs available, most socializing is done at home or at secure restaurants. Expatri-ates tend to frequent restaurants located behind security perimeters. Good quality restaurants can be found at the Rotana Hotel and the Noble Hotel. There is a scattering of other restaurants along the northern crescent of 100m Street, including the Erbil Speed Center, which is very popular amongst expatriates, and in Ainkawa, at the Deutcher Hof German restaurant. Next to the Rotana there is a Costa Rica Coffee outlet, and within the malls there are fast food and small café options comparable to those found in North America and Europe, although the emphasis is on local foods such as shwarma and kebabs. Alcohol is served at higher end establishments, includ-ing hotels and expatriate restaurants.

HOUSINGErbil has a burgeoning housing market characterized by high demand and very little supply. Due to security concerns as well as concerns over the lack of protection under housing contracts, expatriates tend to live in new compounds that have sprung up near the airport, such as Royal City (the most popular), English Village, Italian City, Naz City, and Dream City. Villas in the American Village compound are of very good quality, but it is far away from town. Expatriates tend to value proximity to the airport and commercial activities on 100m Street, so

Houses in Royal City

Type A villa, Italian City



American Village ranks lower in popularity and houses a small population, despite its proximity to the international school. Compounds offer few amenities beyond security and small mini-marts (no pools, gyms, parks, etc). Royal City is the only compound that is residential only; other com-pounds allow villas to be converted into commercial space. Housing stock within the expatriate compounds is primarily comprised of free-standing houses on small plots of land, with narrow passages between the houses. Italian City also has attached and semi-detached units. There are very few apartments in the current market, and expatriates rarely choose to live in them. Due to limited availability, expatriates may share houses in secured compounds, such as two assignees sharing a four-bedroom house. The Rotana Hotel is also host to a number of assignees who are waiting to secure a unit in one of the compounds. Small units, such as two- and even three-bedroom villas, are less common than four- and five-bedroom units. Houses are rarely furnished and are often rented without light fixtures, cabinets, and appliances. These items, in addition to furniture, must be purchased by either the company or the individual. Common area utilities for the compounds are paid on top of rent. English Village includes all utilities

and common space maintenance in an overall service charge, which varies with usage.

Compounds charge their own variable rates for electricity and water. These are higher than city rates, as each also provides a generator for the compound, which is used during frequent electri-cal outages. Individual homes do not require separate generators.

High rent escalations are becoming commonplace as landlords and management companies take advantage of the high demand and insufficient supply. In the short run the compound rental market is expected to continue to be volatile as expatriate populations grow. However, supply is growing rapidly via expansion within existing compounds and development of new compounds, and there are predictions that within a couple of years the market may be flooded by up to 100,000 new units.

Houses in English Village


Documents

Erbil Iraq Survey AIRINC 2012