Jordan Times
Wednesday, April 6, 2005
Private sector views
business opportunities to rebuild Iraq
By Sarah McGregor-Wood
AMMAN — Speaking at the opening of the Rebuild
Iraq 2005 conference, Minister of Trade and Industry Ahmad Hindawi yesterday
underlined the supporting role Jordan has been playing in the reconstruction
effort and noted the importance of consolidating business relations between the
two countries.
“Jordan is providing both the infrastructure and the environment to enable
companies to get involved in the rebuilding, and it will continue to act as a
gateway into Iraq,” he said, adding that “a number of international companies,
and NGOs, have chosen to set up their offices in Amman to direct their
reconstruction efforts.”
Hindawi shared the stage with Iraqi Minister of Planning Mehdi Al Hafedh and
Assistant Secretary of Commerce for Market Access and Compliance and Chairman of
the US Department of Commerce's Iraq Investment and Reconstruction Task Force
William Lash, both of whom stressed the importance of international businesses
partnering with Iraqi firms to develop the sort of thriving private sector the
country hasn't seen since the 1970s.
“The difference between Iraq 30 years ago and Iraq today is dramatic,” said
Hafedh. “After years of misadministration, war and looting, the private sector
has many challenges to overcome. But ultimately it will be private businesses
that carry out the reconstruction effort, backed by government legislation.”
With donors' pledges amounting to less than half of the $55 billion the World
Bank estimates is required to get the country back on its feet, the onus is on
the corporate world to take an active role in the rebuilding process.
“When you build a new school, you're creating the opportunities for learning and
training,” said Lash. “Rebuilding infrastructure works to rebuild civil society
too.”
He agreed with Hafedh that it should be the private sector, not the state, that
takes the lead in reconstruction works.
The interim Iraqi government has been trying hard to create a positive
investment environment to attract international companies, in a bid to offset
the inherent risks in doing business there. Import tariff rates have been set at
just five per cent, while tax is around 15 per cent.
The private and public banking sectors have already began to flourish with
public banking institutions registering an 88 per cent increase in deposits in
2004. With no formal banking system in existence during the former leader Saddam
Hussein's reign, this marks significant progress for the country.
While all of the conference speakers emphasised their optimism that a
flourishing private sector will emerge in Iraq, they also accepted that security
is still one of the biggest handicaps.
Andy Bearpark, former director of reconstruction operations in Iraq with the
Coalition Provisional Authority, stressed that security was an issue companies
need to take into account. “There are different problems in different parts of
Iraq. The north is relatively stable, while the south has trouble with criminals
rather than Al Qaeda. But really, security is an issue not an obstacle. The way
to deal with it is to involve security companies from day one, and take their
advice.”
With 44 different countries and around 1,000 Iraqi businessmen attending this
year's conference and exhibition, the interest from the international community
is already apparent.
“This is a unique opportunity for the private sector,” commented Greg Wong,
commercial counselor at the US embassy in Baghdad. “The normal rules of business
don't apply. But the `now or never' gold-rush idea is a myth. It's a long- term
commitment.”