Japan Backs Deeper Investment Ties as Iraq Pushes Economic Reforms

Japan and Iraq are looking to deepen their economic relationship as Baghdad seeks greater foreign investment and advances efforts to strengthen infrastructure, diversify its economy and improve the business environment.

Japan has maintained a long-running development partnership with Iraq, supporting reconstruction and economic infrastructure through grants, technical cooperation and yen loans. The relationship is increasingly placing greater emphasis on private-sector participation and investment alongside traditional development assistance.

In June 2026, Japan’s Ambassador to Iraq, Akira Endo, met newly appointed Iraqi Prime Minister Ali Faleh Al-Zaidi and reaffirmed Japan’s intention to further strengthen bilateral cooperation. During the meeting, the Iraqi prime minister said the country’s doors were open to Japanese companies across a range of sectors, particularly major strategic projects, infrastructure and other economic activities.

Japan has also been encouraging its companies to consider opportunities connected with Iraq’s economic recovery. Earlier this year, Japan’s Ministry of Economy, Trade and Industry and the Japan External Trade Organization held an economic recovery and development forum covering Iraq, Syria and Palestine, highlighting the importance of private trade and investment and encouraging early participation by Japanese businesses.

Japan’s development support has played a substantial role in Iraq since 2003. The Japan International Cooperation Agency says its yen-loan projects in Iraq have reached 36, with a combined value of around 1.3 trillion yen, equivalent to roughly $10 billion. The projects have supported areas including energy, roads, ports, water and sanitation, healthcare and irrigation.

JICA has also moved into private-sector financing in Iraq. In 2021, it provided its first non-sovereign loan in the country to support investment in a new terminal at Umm Qasr Port, Iraq’s largest commercial port.

Trade between the two countries remains significant, particularly because of Iraq’s energy exports. Japanese Foreign Ministry figures show Japan exported goods worth 16.7 billion yen to Iraq in 2025, while imports from Iraq were valued at 168.7 billion yen.

Iraq’s government is seeking to attract a wider range of international investors as it works to modernise infrastructure and reduce economic dependence on a limited number of partners and sectors. Energy remains central to the economy, but Baghdad has also highlighted opportunities in infrastructure and broader development projects.

For Japan, deeper commercial engagement could build on decades of development cooperation while creating new opportunities for Japanese companies with expertise in infrastructure, energy, technology and industrial development.

Both sides have indicated that continued dialogue between government institutions and private companies will be important if the relationship is to move from development assistance toward a broader investment partnership.

Japan-Iraq economic ties at a glance

•    Japan and Iraq have maintained diplomatic relations since 1939.
•    Japan pledged a $5 billion reconstruction assistance package for Iraq in 2003.
•    JICA says 36 yen-loan projects have reached approximately 1.3 trillion yen.
•    Japan is encouraging greater private-sector involvement in Iraq’s economic development.
•    Iraq has publicly invited Japanese companies to invest in strategic projects, infrastructure and other economic sectors.

Sources

Embassy of Japan in Iraq, June 8, 2026.

Japan International Cooperation Agency (JICA), Iraq Office, 2026.

Ministry of Foreign Affairs of Japan, Japan-Iraq Relations, May 20, 2026.

Japan Ministry of Economy, Trade and Industry, January 20, 2026.