Housing and Construction Minister Jaseem Mohammed Jaafar said inviting foreign business people into the country would be the best way to get up to three million housing units built.
"Iraq is looking for about three million additional housing units to fill the gap between what is needed and what can be done" by domestic contractors, he said on Tuesday.
"The best way and the fastest way to do that is by opening our doors to foreign construction companies and banks ... this would permit the construction of up to 500,000 units in five years."
Jaafar said his ministry had drafted plans that included preliminary work already under way on 10,000 homes and apartments.
Work has begun in central and southern Iraq, as well as in areas north of Baghdad, though nothing has been planned for three autonomous provinces in northern Iraq run by the Kurds.
A foreign business consultant also recently met Iraqi business people, the US military said on Wednesday.
Jim Beardsley, former chief executive officer of the US-based Master Lock company, spoke with Iraqi business people and entrepreneurs in Taji, one of several sites he visited as a member of the Volunteers for Economic Growth Alliance (Vega).
Work is already under way to
construct 10,000 homes
"This is something I volunteered for, because I'm very interested in the economic development of Iraq," Beardsley said.
"I feel they're at a point where I can help."
His visit was part of a programme that allows Iraqis to discuss business development with experts and industrial leaders from around the world, a US statement said.
"We're trying to lay the right foundation for development; a good economy and a democratic government goes hand in hand," the US consultant said.
As part of Vega's Private Sector Development Initiative, Iraqi business owners may also apply for grants to help expand their businesses.
The grant programme is funded by the US Agency for International Development and is aimed at giving small and medium enterprises revenue to help take advantage of emerging markets such as their own.
"The future of Iraq is bright, as long as they get a good economy going, they could be leaders in the Middle East"
Jim Beardsley, former chief executive officer of Master Lock
"The future of Iraq is bright, as long as they get a good economy going, they could be leaders in the Middle East," Beardsley said.
At his press conference, however, Jaafar did not address guarantees required by foreign investors in Iraq despite acknowledging persistent insecurity that is hampering reconstruction.
"Today, terrorism is a key impediment in destabilised areas ... workers are under pressure from residents of those areas," the minister admitted.
Security and corruption
The US firm Contrack International has walked away from an estimated $325 million road and bridge contract because of heavy expenses required to provide security for its staff.
Another obstacle is widespread corruption in the Iraqi administration.
The head of Iraq's Commission of Public Integrity, Judge Radhi Hamza al-Radhi said in May that serious signs of corruption had been uncovered in the former ministry of reconstruction and housing, which was replaced in April.
Iraq plans to construct three
million housing units
Reconstruction efforts also took a hit in January when an audit found the former US-appointed Coalition Provisional Authority (CPA), run by Paul Bremer, was unable to properly account for $8.8 billion it had transferred to the interim Iraqi government.
In a scathing review, the CPA's inspector-general said the occupation authority had failed to implement adequate controls over the money despite a warning that financial systems at one ministry were open to fraud, kickbacks and misappropriation of funds.
Sabotage attacks on oil and electricity infrastructure only add to the problems in rebuilding Iraq, as well as stemming the flow of money to pay for it.