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Arab Businessmen Considering Investments In Iraq
additional reporting by L. Ibrahim
DUBAI, May 23 (IslamOnline) - As British and American envoys to the U.N. were busy drafting "smart sanctions" proposals for Iraq, potential investors are already working under the assumption that the end of the sanctions saga is in sight.
While many may view it as building sandcastles in the air, Arab businessmen are eagerly eyeing the underdeveloped Iraqi market with an optimistic spirit. Middle East marketing analysts are not only assuming that the sanctions will end soon, they are asking interested firms to start allocating budgets.
Investment specialist Ahmed Samerai dismissed the "smart sanctions" as a ploy. "'Smart Sanctions' is just another term for the already existing sanctions. Sooner or later they will be lifted and change is coming into Iraq," he said.
Hopes were dampened however, as the firms were asked to be patient in waiting for the response from the Iraqi government, while a process of "benchmarking" and quality control was underway.
Samerai was speaking at a seminar held Tuesday in Dubai where Arab businessmen gathered to discuss future opportunities in the untapped Iraqi market.
Another marketing analyst, Akram al-Zubaidi, an economics professor and former economic specialist in the Arab League, said that nearly all sectors of the Iraqi market were underdeveloped and required business support and investments.
These sectors include agriculture, industry, oil and gas, trade, transportation, water and electricity, education, health services, banking sectors and construction.
"According to the Ministry of Trade in Iraq, other countries have lost an annual $200 billion from halting trade relations with Iraq," Zubaidi added.
Moreover, Zubaidi noted that priority should be given to health care and nutrition, especially as thousands of Iraqi children die each year from malnutrition.
"When comparing the figures for… April 1989 and April 2000, the death toll in Iraq has increased by 929%," he said.
Countries that have signed business deals with Iraq include Turkey, which is to build a minibus and heavy vehicles factory with 2.5 million euros.
At the moment Iraq has trade agreements with Egypt, Syria, Turkey and Saudi Arabia.
"Russia also looks on the Iraqi market eagerly to start implementing the contracts signed with the Iraqi government worth $10.2 billion as soon as the sanctions are lifted," he said.
In order for Iraq to continue importing products, it will need to increase oil production from 3 million barrels per day (bpd) to 3.4 or 3.5 million, and there is a possibility for it to reach 6 million bpd, allowing it to trade even under the sanctions, added al-Zubaidi.
Iraq controls who it does business with, not the sanctions committee in Iraq, added al-Zubaidi. The government prefers to do business with Arab countries, and in the mid-80s many industries emerged in Iraq established by Arab countries such as Syria, Egypt, Jordan, Tunisia, Algeria, Morocco and UAE, he said.
Encouraging businessmen, Samerai said the sanctions imposed on Iraq are about to end and those who take the opportunity and lead the way will succeed, emphasizing the importance of investment in information technology and telecommunications.
Countries like Russia, China and, especially France, stand a good chance to win a contract with the Iraqi government, said Samerai.
"There is no way the Iraqi government will trust the U.S. again. A few days ago, the Ministry of Defense in Germany abandoned using Microsoft programs. The coding of Microsoft is well known to the Americans," he said.
After the Iraq-Kuwait war, technology development in the country suffered. At the same time, huge leaps in technological developments took place elsewhere, accompanied with considerable economic growth. To bridge the current gap, Iraq needs $2.5 billion to make up for the loss, just to return to its previous position of 1989.
It also requires $2 billion for the IT (information technology) education sector and nearly $12 billion for the communications sector destroyed during raids.
Before 1989, Iraq was one of the biggest users of PCs in the Arab world, and computer science was a compulsory subject for science majors in Iraqi universities. This practice was adopted in the early '80s when many countries knew very little about computer technology.
Adnan Bhatti, a marketing analyst, said: "The relevant United Nations Sanctions Committee, also known as the 661 Committee, monitors the export of goods to Iraq. All member states of the U.N. are obliged to ensure that exports are undertaken only in accordance with the U.N. sanctions regime.
"Food, medicines and recognized essential civilian supplies required to meet humanitarian needs and destined for Iraq are subject to notification and approval procedures by the committee."
There was a mixed reaction from the businessmen at the seminar with regards to investing in Iraq. Some of them had attempted to trade in the past but were rejected by the U.N. 661 committee for no apparent reason, they said.
"If our products are on the U.N. 661 list, we will be interested in doing business there. We do have a feeling that the sanctions will be lifted soon and being an UAE national company we stand a good chance," said David Lankester, a business development manager in Sara Trident, which specializes in healthcare.
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