Cheap Imports Mean “Made In Iraq” Is Disappearing

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The End of An Industrial Era: Cheap Imports Mean “Made In Iraq” Is Disappearing

Almost half of Basra’s smaller manufacturers have closed in the face of a market flooded with cheap imports. Yet due to the current financial crisis and sinking oil prices, they are more important than ever.

Today Basra woodworker, Haj Karim Nasser, is taking apart what remains in his workshop. He will sell everything that’s left. Nasser has made furniture here for around 25 years. The smell of wood dyes and wood shavings permeates the space.

But Nasser, who has had to close up and lay off 25 staff, has become just another of the latest victims of the open market policies pursued in Iraq since 2003. Nasser now will now work selling foreign exchange in one of Basra’s markets.

“We just couldn’t compete with the cheap, imported stuff,” Nasser told NIQASH. The cost of producing a bedroom suite in our workshop was around US$1,600 and we’d sell it for US$2,000. But you can get Malaysian-made suites here for about US$1,250. The quality is not comparable. But for many people here the cost was more important than the quality.”

In Basra, hundreds of similar business, small workshops and factories have had to close. According to Basra’s Union of Industrialists there used to be about 15,360 industrial operations in the province, in around 13 industrial areas, producing a wide variety of products.

Between now and 2003 around half of these have been forced to close thanks to a lack of government support, high taxes on raw materials and a market flooded with cheap competitors from outside Iraq, they say. A number of government-run factories in Basra which produced iron, steel, paper and fertilizer, were also shut down, which led smaller businesses who used to get their raw materials from these, to shut too.

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