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April 29, 2004

Foreign Firms Continue to Try to Do Business in Iraq

by Sanjay Suri

As violence rocked Iraq in Fallujah and Najaf, major international companies gathered in London this week to figure ways of doing business in Iraq without getting their hands burnt.

The magic formula was offered at a three-day Iraqi procurement conference held at Hilton hotel in central London from Monday to Wednesday this week.

"Across all the main industry sectors there exists an excellent opportunity to do business in Iraq without having to visit the country," the website for the conference promised in its invitation to companies.

The promise worked at least for purposes of the conference, organized by the British PR firm Windrush Communications in partnership with The Arab-British Chamber of Commerce. The main sponsor for the conference was the Kuwait Petroleum Corporation.

The violence and unrest within Iraq seemed not to have deterred investors. Participation was limited to 300 companies, and was sold out a month ago.

Participating companies included Raytheon, the U.S. manufacturer of smart bombs, many of which were dropped on Iraq, and at least some of which went lethally astray. Other companies included the oil companies Shell, ChevronTexaco and ExxonMobil, and from the pharmaceuticals firm Pfizer to the Swedish car and truck manufacturer Volvo.

"The conference is a carve-up of Iraq's assets, minerals and wealth," Ghada Razuki from Stop the War Coalition told IPS. "The Stop the War Coalition has said all along that one of the reasons for going to war was so that big business, mainly in the United States could profit from Iraq's wealth."

But Razuki pointed out that "the resistance movements in Iraq are making it very difficult for any foreign company to operate in Iraq. We demand that Iraq's wealth is given to Iraqis. Iraqis are more than capable of running their own affairs."

The conference was held with the clear backing of the British government. The procurement conference followed persistent and growing complaints that Britain is being left out of the reconstruction business.

British Trade and Industry secretary Patricia Hewitt released figures ahead of the conference to show that British firms have been nominated prime contractors on less than a third of the contracts awarded.

Liberal Democrat MP David Chidgey, member of the foreign affairs select committee said "it is unacceptable for the UK to be treated as the poor relation when it comes to reconstructing Iraq."

Strong British participation at the procurement conference was intended in part to network with leading US companies to negotiate sub- contracting. But officials and organizers remained tight-lipped about specific negotiations through the three-day event.

Heavy security was placed outside the hotel. The venue of a gala dinner at the New Connaught Rooms in central London was kept under wraps for weeks, and only a few protesters managed to turn up outside to protest.

Windrush Communications remained incommunicado through the conference. Officials declined to comment. Iraqi representatives and representatives of the Coalition Provisional Authority (CPA) responsible for the administration of Iraq remained unavailable.

But the weight of the conference was clear from the presence of former US Rear Admiral David Nash who is leading the program for the awarding contracts worth 18.6 billion dollars up to the handover of some power from the CPA to a new Iraqi government due June 30.

Brian Wilson, British Prime Minister Tony Blair's special adviser on trade and investment addressed the conference. Wilson dropped broad hints about the virtues of doing business remotely.

"The Foreign Office's travel advice for Iraq is clear," he told the conference, according to an officially released statement. "It recommends that even the most essential travel to Iraq should be delayed, if possible."

But he added that "throughout these difficult security problems we cannot lose sight of the longer-term objective of helping Iraqis to rebuild the infrastructure and their economy. So it is all the more important that you use this event to build relationships and sow the seeds of a long-term commitment to Iraq and its people."

The signal was to set up joint ventures with the visiting Iraqi delegates or to appoint them as local managers for enterprises controlled from the outside by the Western multinationals.

A large delegation of Iraqi businessmen and members of the US appointed governing council and cabinet attended the conference to pick up lucrative offers. Most of the Iraqis were invited to London with their families in order to promote strong personal ties within a short period.

The Iraqi delegates included Judge Wael Abdulatif, governor of Basra, Dr Barham Salih, prime minister of the Kurdistan regional government, ministers for agriculture, communication, housing and construction, health, industry and water resources. DR Sinan Ridha al-Shabibi, governor of the Central Bank of Iraq accompanied the team.

For three days it was virtually the whole of the appointed Iraqi government that had come to London. The event itself became an illustration that Western business executives do not need personally to go to Iraq.

They have the resources to call the Iraqi government to them. They are looking at reconstruction projects that could be worth anywhere between 100 billion dollars and 500 billion dollars in what Windrush called "one of the biggest projects to have been undertaken in over 50 years."

(Inter Press Service)

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