Thank you very much for that warm welcome, and the invitation to speak to you all this evening.

If it wasn’t already challenging enough to address such a senior and knowledgeable audience, I was delighted to hear that I’d be introduced by my friend and fellow Member of Parliament, Mr Salmond. Who wouldn’t feel overjoyed to give a speech to so many representatives from major oil companies in front of the man who created the Royal Bank/BBC oil index during his time as Chief Economist for the Royal Bank of Scotland? At least we can all console ourselves that this career achievement, which is still running today, was set up by the Rt. Hon Member for Gordon 34 years ago. He must have been some child prodigy..

I’ve been asked to touch on three issues with you this evening:

• How to persuade the under-utilised Scottish oil, gas and engineering sector to bring their expertise and trade to Iraq.
• To give my “speculative thoughts” on a second Scottish referendum and EU situation?
• And finally, how to get more Women in business

I have to say that my thoughts on our constitutional situation are less speculative today than they were yesterday morning, but I’ll come to that in a moment.

“Huge potential for growth in the area”

 

So firstly, why should we be seeking to do business in Iraq?

I believe that it’s absolutely vital that we improve our trading relations across the Middle East. The reasons are simple.

It’s good for our overall economy, it will be good for your businesses, and it will help bring stability and security to the region and here at home. And there’s huge potential for growth in this area. Although Iraq is not yet a member of the WTO, which has its own short-term challenges, its eventual accession will enhance structural and Iraq’s reintegration into the multilateral trading system. The organisations who gain most from engaging with this emerging market will be those which have a stronger base to build from when Iraq’s WTO status is confirmed.

While it’s not yet clear what the effect of Brexit will be on the EU-Iraq Partnership and Cooperation Agreement, no matter what status that agreement will have it’s clear that there will be a political and economic imperative to agree a successor deal for organisations based in the UK either in parallel to Brexit negotiations, or as soon as possible after Brexit is concluded.

Total bilateral trade between the EU and Iraq amounted to over €16.1 billion in 2015. EU imports from Iraq were worth €11.1 billion in 2015. Oil imports represent up to 99.7% of all EU imports from Iraq. The EU is the fourth-largest source of imports for Iraq followed by Turkey, Syria and China. The EU exported €5 billion worth of goods to Iraq in 2015. EU exports to Iraq are dominated by machinery and transport equipment, chemicals, food and live animals. As part of this trade, the UK has a substantial trade surplus with Iraq: we export more than we import. UK exports to Iraq in 2015 amounted to £609 million, whilst imports from Iraq to the UK amounted to £187 million.[1]

Over the past couple of years Scottish based companies like Agreko, the Weir Group and the Wood Group have already made significant investments in Iraq, leading the way for others to follow. The recent partnership with IBBC and the Aberdeen Chambers of Commerce should help to build new relationships and understanding of how firms can capitalise on the skills and experience they have developed in the North Sea to expand in this new market.

“UK exports to Iraq in 2015 amounted to £609 million and growing”

 

But while this figure is growing, UK Exports to Iraq are under-performing in relation to our European allies. We are 17% of the EU economy, but provide only 12% of the EU’s current exports.

There is huge room for improvement – especially given the relative size of our oil and gas industry, and the enormous potential for the export of expertise and technology forged in the North Sea over the past few decades. Hydrocarbons account for nearly two-thirds of Iraq’s GDP and almost all of its exports.

After experiencing years of embargo and conflict, Iraq’s economy is now on the way to recovery. While GDP decreased by 2.7% in 2014 due to a decline in economic activity in the areas under the control of the Islamic State (ISIS), the stagnation of government spending and the drop in oil prices, growth is now expected to increase slightly in the short term, due to the rise in oil exports.[2]

The World Bank’s latest economic forecast expected Iraq to bounce back in 2016, growing at 7.2% in that year and continuing at around 5% in the next few years. This is driven by the projected ramp-up in oil production, increase in oil-related FDI, structural reforms, implementation of the IMF program, and a lessening of security risks. With the security situation now improving, and the oil price on the rise – the indicators are moving in the right direction for Iraq’s economy.

This is not to underestimate the potential impact of future world events, the global environment, social and political developments, and the Da’esh insurgency, but our recent experience seems to see light at the end of the tunnel.[3]

So the potential is there, we have success stories in place and the future for Iraq appears brighter than it has for some time.

I believe that there will be the potential of significant rewards for those companies who step up to the challenge now.

“Iraq’s economy is now on the way to recovery”

 

Back in Scotland, we have our own new set of opportunities for business and wider society to take advantage of.

The First Minister’s announcement yesterday has presented Scotland’s electorate with a clear choice between two futures. One would see us removed from the EU and the single market against our will, and pushed over the social and economic cliff as a result of a hard Brexit. In this scenario, Scotland will be recast as a bit part in Nigel Farage’s vision of Little Britain. The other would see the people who care most about Scotland, that is everyone who has chosen to live and work in Scotland, would get to make the decisions about Scotland’s future.

So my message to you about Scotland’s future is clear.

An Independent Scotland would seek to build on our strengths. We would be outward looking, not inward looking. We’d seek to play a positive, modern role in the world, not attempting to rebuild Empires of ages past. This is good news for the oil and gas sector in particular, for rather than viewing your industry, this vital industry, as a cash cow to prop up UK Chancellor’s balance sheets, we’d do all we can to support and develop the industry to its enormous and full potential. A strong oil industry is in Scotland’s interests. It will play a vital role in our future success. And because of that the needs of the industry will be front and centre of our thinking for the future. We can see that this approach has worked for our friends across the North Sea in Norway, and I see no reason at all why, if we work in partnership with the industry here, we can’t make it work for Scotland.

Lastly, I’ve been asked to speak a little about how to get more women in business.

“It’s essential to business success in the twenty-first century”

 

I know that the Iraq Britain Business Council has a positive record in this area. Not only are you benefiting from female leadership in your President, Baroness Nicholson of Winterbourne, but Angelique Lecorps efforts through chairing your Women in Business group within the IBBC is to be commended.

What I would say about this is brief.

Its 2017. Your businesses won’t reach your full potential if your boardrooms and your workers are only selected from half the population. To rely on the traditional models will be to try to achieve success with one hand tied behind your back. If you want to compete, if you want to lead in your sectors, you need the best available engineers, managers and directors possible. So looking to achieve gender equality isn’t a “nice to have” or an added extra. It’s essential to business success in the twenty-first century.

[1] ONS, Who does the UK trade with?, 21 February 2017.

[2] Royal Bank of Scotland, Iraq: Economic Outline, October 2016.

[3] World Bank, Iraq’s Economic Outlook – Spring 2016, 2016.