Corporate sustainability in post-conflict Iraq

By Tariq Abdell, Iraq’s political risk analyst, and Founder & CEO, Mesopotamia Insight

The opinions expressed here are those of the author, and do not necessarily reflect the views of Iraq Business News.

 Iraq’s impending multi-billion dollar mega-reconstruction projects (housing, roads, hospitals, bridges, airports, schools, dams, etc…) and its colossal and untapped natural resources – billions of proven oil and gas reserves– are irrefutably the modern day ‘s El Dorado, affording risk-taking  investors a unique and unparallelled opportunity to thrive and prosper.

 Nonetheless, venturing into Iraq’s quagmire (fragile democracy, geopolitical tensions, severely languished infrastructure, and impoverished population) without strategic foresight and versatility entails grave risk and dire consequences far beyond repair: assets depletion, workforce distress, capital exposure and, ultimately, investments annihilation.

 Furthermore, in the absence of socio-economic data repositories, as result of decades of isolation, to support strategic foresight analysis and corporate sustainability strategies, international investors’ only cogent alternative is to device a comprehensive strategy incorporating constructive engagements, strategic partnerships, and the needed political capital as viable mean to foster and strengthen their corporate sustainability and, ultimately, competitiveness.

 Given Iraq’s decades of wars, sanctions, and economic hardship, the suggested strategy will entail four interconnected points:

Constructive engagements

 Understanding local communities’ value systems, cultural nuances, and earning their trust is an absolute imperative for international investors’ survival and competitiveness. To this end, international investors need to engage all the stakeholders in their areas of operation (e.g., tribal and religious leaders, NGOs, media, members of the provincial government, etc…) via a participatory and inclusive approach to foster mutual understanding, respect and, most importantly, common interest.

Strategic partnerships

  With the already established relationships, that is corroborated with strategic insights, international investors ought to capitalize on the achievements of the previous phase, by strengthening and solidifying those relationships perceived to be promising, fruitful, and prone to grow into sustainable strategic partnerships.

 Corporate social responsibility

 Given the socio-economic dynamics of their areas of operation, International investors must adopt an acculturated corporate social responsibility – not charity- to attain broad and immediate impact. To this end, international investors, in concert with local partners, ought to leverage their strategic partnerships to deliver their envisioned corporate social responsibility strategies. For instance, international investors need to work closely with local NGOs and institutions (Basrah University, for instance) to solve a communal problem or foster a fruitful cooperation.

 Political capital                 

  To ensure their businesses survival and success in an environment replete with uncertainty, international investors ought to foster their political capital that commensurate with their operational efficiency by leveraging their strategic partnerships and the achievements of their constructive engagements.

 Case in point:

 Given Basrah’s high unemployment rates – 70%- and its colossal oil reserves, IOCs could play a crucial role in the local economy by introducing the critically needed technical know-how and, thus, help develop local workforce literacy through strategic partnership with local institutions such as Basrah University – suitable platforms for knowledge sharing and dissemination. Unarguably, such perspicacious initiatives would help alleviate Basrah unemployment, spur economic recovery, strengthen IOCs’ political capital, and, ultimately, their corporate sustainability.

 Drawing on past experiences (Eastern bloc, for instance), transitioning from years of planned economy into free market societies – adaption of democratic and free market principles- is an intricate and time consuming process, that is exacerbated with the geopolitical tensions. Therefore, to overcome the unforeseen externalities associated with Iraq’s post-conflict environment, international investors ought to:

  • Recalibrate their corporate sustainability strategies to reflect Iraqi market’s idiosyncrasies. Among them, political landscape, tribal and cultural nuances, ethno-sectarian fabric, institutional and bureaucratic hurdles.
  •  Build in-house leaders and foster their global mindset, transcultural competence, and societal capital. Such virtues are essential prerequisites for the implementation of the aforementioned strategies.

Simply put, “Ignorant both of your enemy and yourself, you are certain to be in peril”  Sun Tzu, a renowned Chinese military general, strategist and philosopher.

The opinions expressed here are those of the author, and do not necessarily reflect the views of Iraq Business News.

The author, Tariq Abdell, is Iraq’s political risk analyst, and Founder & CEO of Mesopotamia Insight

He can be contacted at: [email protected]

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Followed on twitter: http://www.twitter.com/atariqx

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