Affairs

Investments

Iraq opens for business— Washington

Preface

American troops are leaving Iraq, but the engineers, hotel architects and database managers are heading in.

Iraq, National Investment Commission, Sami al-Araji

21 October 2009

American troops are leaving Iraq, but the engineers, hotel architects and database managers are heading in. This week, they descended into the basement of a Washington hotel where behind a security cordon they courted governors of all 18 Iraqi provinces under reality-show conditions.

“They are competing against each other,” said Sami al-Araji, chairman of Iraq’s National Investment Commission. “The sooner you develop your province, the sooner people have faith in you and you get elected again and again.”

While Afghanistan continues to vex policy-makers at the White House and Pentagon, Iraq has drifted from concern. If there was anything surprising about the two-day US-Iraq Business and Investment Conference, which concluded yesterday, it was the easy-going cheerfulness about a situation just two years ago rued as quagmire. “We are excited in the Obama administration to be part of this transition that’s occurring in Iraq,” said Secretary of State Hillary Clinton, who welcomed attendees. “Our combat troops have left Iraq’s major cities, Iraqi security forces have replaced them, and what we see is a new sense of commitment to the future.”

Iraq’s pitch was, simply, that it remained undervalued: Saddam Hussein’s regime “utilised the human and natural resources for the machine of war”, said Prime Minister Nouri al-Maliki, who left the conference briefly – as attendees took a mid-morning break for hummous and dates – to visit Barack Obama in the Oval Office. “This government pays considerable attention to sectors of education and agriculture because they have been neglected.”

Indeed, Washington has been suffused by optimism about Iraq. The IMF, which estimates the country’s economy will grow by roughly 5 per cent in each of the next two years, appears close to a loan deal with Baghdad. The US Export-Import Bank expects shortly to adjust a pessimistic risk rating that will allow financing for American companies who want to work there.

“I don’t think there are too many more of these opportunities if one looks at the sweep of economic harmonisation in the world,” Paul A Brinkley, a US deputy undersecretary of defence, told conference attendees. While an energy-sector session was standing-room-only, the programme seemed designed to spur the growth of an economy that was, in Clinton’s words, “fuelled by, but not limited to, oil production”.

One federal official announced plans to finance the construction of 500,000 new housing units nationwide (with an eye on three-room houses around 100 sq m to sell for up to $50,000/€33,000) while a Kurd leader boasted of the four five-star hotels coming to Irbil. (The marketing effort may have been threatened by the bilingual interpreter’s inability to clearly enunciate the difference between “tourism” and “terrorism”.)

Attendees said they expect safety in Iraq could soon be no more dangerous than in other countries where foreign investors account for danger as they happily trudge ahead with business. Manoj Nair, operations director of a Kuwait-based energy-services firm, said that the $15,000 (€10,000) he pays to secure each oil-field-bound convoy of 20 workers does not interfere with profits. “If you adopt private security, with US military support, it goes on,” he said.

In place of violence, attendees worried about an uneven business terrain they attributed to poor leadership. Officials from both Boeing and FedEx contested a decision this summer by the Iraqi Civil Aviation Authority to award an exclusive cargo contract to a single company, RUS Aviation. FedEx withdrew from the country altogether as a result, even though it had weathered perpetual violence to maintain service since shortly after the US invasion in 2003. “We’ve been driven out of the Iraq market,” said a FedEx executive.

“We’re not saying we have the best society and the most open and transparent society,” al-Araji huffed impatiently when challenged by a different, but nonetheless disgruntled American businessman. “It’s a long journey.”

Monocle 24

× The Weekend Edition

Loading

0:00:00 0:01:00

Drag me