Custom Search

Tuesday, June 17, 2008

With Security Improved European and Asian Companies Investing In Iraq

European and Asian companies are descending on Iraq for investment purposes, beating out American rivals who are waiting for further security improvements.
In a USA Today interview, Hoshiyar Zebari, who is the Iraqi Foreign Minister in Washington for an official visit, says that Turkish and Russian companies are already active in Iraq while American businesses were waiting for further security improvements and he states, "They take risks. No pain, no gain."

According to Paul Brinkley, the Pentagon official who is leading U.S. efforts to help Iraq rebuild its economy, "It's starting to turn … and the people who are getting in on the ground floor are not American. It's ironic."

Foreign companies, including U.S. investors, have committed to deals worth about $500 million so far this year and Brinkley expects at least $1 billion in foreign investment by the end of the year.

So far, Romanian consortium and a Lebanese company have signed revenue-sharing deals with Iraqi state-owned cement factories. Each group will invest about $150 million.

China has also been selling equipment to the Iraqis and electronic products to their consumers, France, Turkey,and Russia, all countries that did not send any combat troops in, are all reaping the benefits of the improvements made in Iraq.

The deals for this year alone signal the first major investments in Iraq showing a marked confidence in the Iraq's economy.

The private investments that come from the USA are generally individual or institutional investors — not American corporations, Brinkley said. U.S. investors, for example, are part of a $120 million deal to build a hotel in the heavily fortified Green Zone, where U.S. and Iraqi government offices are located.

Americans lead other nations in the number of exports to Iraq, but other nations have ramped up trade. China doubled the number of exports to Iraq this year.

Charles Reis, the U.S. counselor for economic transition in Iraq, is not concerned about the non-American business activity in Iraq, in fact, to the contrary, he is encouraged as evidenced with his statement that, "This is a normalization of Iraq's relationship with the rest of the world".

While America's large corporations are not yet matching the investments into Iraq, individual or institutional investors are and one example mentioned is a $120 million deal to build a major hotel in the Green Zone where U.S. and Iraqi government offices are located.