Sunday 20th of June 2010, there was a real buzz in downtown Baghdad. Iraqi businessmen queued for hours to get through the security checks for the chance to discover American or British companies that could supply goods or services of quality.

The Baghdad Catalogue Show was an event that really demonstrated the strong desire and real will of reputable Iraqi businesses to trade with their US and UK partners. Over 100 people attended the half day event. Many had to be turned away due to the events limited capacity and advance registration process.

Many of the Iraqi businesses men in attendance of the event expressed their hope that trade relations with America and the UK would return to previous levels. The perception of superior quality and shared cultural values with the US and UK persists in modern day Iraq.

Part of any international companies’ overseas strategy must start by understanding the local operational environment and any event that can help companies to do that are critically important in assisting US & UK SME’s to successfully engage in the Iraqi market. The Catalogue Show was conceived as a preliminary step, combining the experience and expertise of Upper Quartile and G4S along with the trade support activities of the US Commercial Service. Catalogues are not sufficient to secure a long term business relationship especially in a country where face-to-face contact remain an essential element of business engagement but it has been a starting point for many of the businesses that took part in the Show.

Next year the Show will be bigger and better, with more private sector involvement from all 3 countries!

Iraq’s General Company for Car Industry, belonging to the Ministry of Industry & Minerals, has announced plans to assemble and produce fire engines, according to a Ministry statement on Thursday.

“Our company has started to assemble and produce fire engines at its workshops, following the signing of contracts with the Baghdad Mayor’s office, the Oil Training Institute in Beiji city, and the Directorate of Civil Defense. These vehicles will be sold for the cost of 12.064 billion (b) Iraqi dinars,” a statement by the General Company for Car Industry said, as reported by Aswat al-Iraq.

It added that “a number of similar contracts were signed with Ibn-Majid Company and the Missan Oil Company, to sell the company’s products, such as vehicles and specialized trucks, for the cost of 2.471 billion (b) Iraqi dinars”, pointing out that “another contract had been signed with the Iraqi Excavations Company, to rehabilitate and set up southern Iraq’s al-Luheis Camp in Basra Province, for a total cost of 641.570 million Iraqi dinars.”

The statement concluded saying that Iraq’s Center for Technical Evaluation and Control had granted the General Company for Car Industry, the certificate of quality for the period of three years, due to its products’ compliance with the international quality administration system.

(Source: Aswat al-Iraq)

Jordan’s Minister for Industry and Trade, Amer al-Hadidi, led a business and investment delegation to the Kurdistan Region following the recent visit of President Masoud Barzani to Jordan.

The delegation met President Barzani, Kurdistan Regional Government (KRG) Prime Minister Barham Salih, and several ministers while participating in a joint business forum at Erbil Convention Centre.

Minister al-Hadidi conveyed greetings from King Abdullah and said that this visit was prompted by President Barzani’s July visit to Amman where he met King Abdullah and other senior officials.

Minister al-Hadidi said, “This trip comes as a welcome step towards an enhanced relationship. I brought 21 businessmen and women with me, to further explore economic relations and opportunities and other ways in which we can cooperate.”

He added, “We have been highly impressed by the developments we have seen in the Kurdistan Region, and I think the Region and Jordan have a lot in common and we can work together.” Minister al-Hadidi informed the President and Prime Minister that all arrangements were in place for the opening of a Jordanian consulate in the near future, and pledged his country’s support to include capacity-building and training in future cooperation.

President Barzani said, “The KRG will provide full support to the projects and initiatives proposed by the members of the delegation.” He added, “The people of the Kurdistan Region can benefit from the expertise and experience of Jordanian institutions and companies, and I believe these firms will find attractive opportunities in the Kurdistan Region as a base of operations for the Iraqi market.”

Prime Minister Salih said, “I am pleased to reiterate the support of the KRG for further developing relations with members of the international community and the Arab world, and I hope that the development of the Kurdistan Region provides an example for the rest of Iraq.”

Jordan’s minister and his counterpart, the KRG Minister of Trade and Industry Sinan Chalabi, co-chaired a meeting with KRG officials, including the Ministers for Planning, Agriculture and Water Resources, Health, Housing and Reconstruction, Municipalities and Tourism, the Chairman of the Investment Board, and the Head of the Department of Foreign Relations. The ministers and visiting delegates exchanged views on how best to move forward with projects. Minister Chalabi said, “This visit is very important to illustrate to foreign investors and firms the situation on the ground and the opportunities we have to offer. It has been a pleasure to meet with this dynamic group of business people.”

The delegation then participated in an open business forum with local firms and the Kurdistan Region Chambers of Commerce and Industry. The Head of the KRG Department of Foreign Relations Minister Falah Mustafa Bakir said, “The decision to move forward with the opening of the consulate is most welcome. This visit has proved the importance of the private sector and commercial cooperation in furthering political, economic, and cultural relations.” He added, “I believe there is tremendous scope for this partnership in the future, and I think Jordan’s officials, institutions, and companies are aware of the opportunities our Region has to offer.”

Kirkuk’s governor, Abdul Rahman Mustafa, met with the chief of the provincial reconstruction team (PRT), Fletcher Burton, to discuss security, economic and service developments in the region.

The governor assured Mr Fletcher that the security situation was good and stable, as evidenced by the completion of projects in Kirkuk and the improvement of services to its citizens.

The administration is keen to complete large important projects in Kirkuk, such as building hospitals and implementing water projects, and is discussing with central government in Baghdad regarding all of these issues.

The electricity crisis was also discussed, and it was recognised that this is a problem throughout the country, which needs considerable investment to solve.

(Source: Eye Media Company)

The Dutch ambassador to Iraq, Peter van Leeuwen, visited Basra province to discuss investment opportunities with local officials.

“During the visit, the ambassador had a close look at investment project and opportunities that could attract Dutch firms to Iraq,” the Basra Investment Commission said in a statement on Tuesday, as received by Aswat al-Iraq news agency.

It explained that the Dutch ambassador and Basra local officials discussed the Iraqi investment law as well.

(Sources: Aswat al-Iraq, Dutch Embassy)

Business Monitor International (BMI) has published a new report on business in Iraq.

Summary:

The oil sector contracts signed between Iraq and international energy companies in 2009 reflect the first stirrings of what the oil and gas industry hopes will be the reestablishment of a strong working relationship. Following years of underinvestment as a result of the economic sanctions imposed on Iraq following the 1991 Gulf War, Iraq is hoping to tap the expertise and capital of international oil companies (IOCs), their state-run national oil company (NOC) competitors and service companies in order to boost the technical capabilities of its infrastructure as well as the production and export capacities of the country’s crude oil, natural gas and refined products.

Owing to the 1991 Gulf War and subsequent UN sanctions Iraqi production suffered during the 1990s. The country was granted an exemption from OPEC production quotas while it operated under the auspices of the UN Oil-for-Food program, which allowed Iraq to export limited amounts of crude oil in exchange for the purchase of food and essential medical supplies.

Although the Oil-for-Food program was disbanded after 2003, Iraq still benefits from the OPEC quota exemption. BMI forecasts Iraq’s 2010 production at 2.47mn b/d, of which 1.62mn b/d will be exported, and the government plans to boost production to 12mn b/d by 2020-a production increase of 485% over the 10-year period. BMI sees this target as ambitious, forecasting 2020 output of 4.5mn b/d, but our projections still see 82% growth over the period.

While our outlook is sanguine, there are manifold risks to investment in the Iraqi oil and gas industry. In the long term, crude production growth will mean that Iraq will come under increasing pressure to rejoin the OPEC quota regime, presenting a potential cap on further output gains. In the short and medium term, Iraq’s large investment needs, political instability and security risks will all contribute negatively to the country’s energy sector aims. Furthermore, the role of ‘resource nationalism,’ particularly in a country with an insecure polity wary of foreign intervention, cannot be discounted in the upstream segment.

This can be discerned from the development contracts signed between Iraq and the various international companies jostling for position in the country’s energy investment plans. The final awardees originate from a broad spectrum of European and Asian countries, and only two US companies-ExxonMobil and Occidental Petroleum-were awarded contracts. Furthermore, the Iraqi government was keen to be seen as negotiating hard to obtain the best possible terms for the state, and the government has shown no hesitation in changing deal terms for its financial benefit. Earlier changes to contractual structures included a 5% decline rate provision for output above the applicable production targets, as well as changes in ownership structures to the benefit of the IOCs. Nonetheless, BMI believes that Iraq’s ambitious plans for its oil and gas sector present significant investment opportunities for foreign companies. Specifically, we have identified the country’s oil services sector, refining segment and natural gas industry as particularly attractive opportunities. We have highlighted below not only the nature of these opportunities, but the three most important risks that foreign investors will face in the Iraqi energy sector in the coming years.

The full report runs to 43pages, and is available at a price of £525 directly from Business Monitor International.

A UAE company has agreed to build a residential and commercial compound in Karbala, the chairman of the Karbala council said on Monday.

“A delegation from a UAE company has wrapped up its several-day visit to Karbala, during which it expressed an interest in implementing tourism and hotel projects in the province, as it has done in a number of other Arab countries,” Mohammad Hamid al-Moussawi told Aswat al-Iraq news agency.

“The company will implement two projects; the first is a large shopping mall, while the other is a residential compound,” he added.

(Source: Aswat al-Iraq)

“Seven years after the U.S.-led invasion, Iraq’s petroleum industry shows signs of living up to the potential that American planners hoped for at the start of the military operation, a potential boost to the war-ravaged country’s economic recovery.

“After fits and starts, Iraq’s oil production has rebounded to pre-war levels.”

So reports the Wall Street Journal on Friday, in a feature article on Iraq’s economic recovery.

While the country suffers from a shortage of electricity, the increasing demand for power is a sign of overall economic growth.

“The International Monetary Fund estimates Iraq’s gross domestic product will grow at above 7% this year, compared to a contraction of almost three quarters of a percent in 2005, the first year the IMF started posting reliable data.

“Inflation slipped to 2.7% in June, the lowest level in three decades, according to Mr. Kassim at the central bank. The IMF pegs inflation at just over 5% this year, down from about 37% in 2005.

“But unemployment remains stubborn, with official figures showing 20% of eligible workers without jobs. While that figure is down from previous years … U.S. commanders and diplomats are pushing job creation as a way of keeping young Iraqi men out of the insurgency.”

(Source: Wall Street Journal)

Debate is raging in Iran regarding the issue of claiming reparations from Iraq in relation to the Iran-Iraq war in the 1980s.

Earlier this month, a member of the Majlis (the Iranian parliament), Eivaz Heidarpour, who is also a member of Iran’s National Security and Foreign Policy Committee, said that Iran could claim compensation from Iraq amounting to $1 trillion.

But this week a senior member of Iran’s Islamic Consultative Assembly has said that the time for addressing the issue of reparations relating to the Iraq-Iran war is over.

Seid Kazem Delkhosh told AKnews that the time has passed for discussion about the eight years of war between Iraq and Iran; the subject should have been discussed and finalised long ago.

Ali Alaq, the chief secretary of the Iraqi council of ministers told the Arabic Al-Sabah daily on Tuesday that if the Iranian authorities demanded compensation from the Iraqis for war damages, “which is an illogical request”, Iraq could also appeal for compensation from Iran.

He underlined that the Iraqi government needs to review its foreign policy in order to define a policy for compensation claims for damages the country incurred, is suffering, or may endure in the future.

This revision may help to get back a portion of the compensation due and to reimburse some of the debts Iraq has accumulated, “but this is feasible only when the political parties in Iraq all cooperate,” Alaq continued.

Delkhosh said that Iran and Iraq, as two Muslim counties with Sunni and Shia populations are sympathetic to each other and it was the opponents of the two nations who inflicted the war on them as neither the Iraqis nor the Iranians supported it.

Iraq invaded Iran on 22 September 1980, triggering a bitter eight-year war which destabilized the region and devastated both countries.

A territorial dispute over the Shatt al-Arab, the waterway which forms the boundary between the two countries led to the outbreak of the war.

Iraq has so far paid off $30.1 billion of its $52.4 billion reparations debt to Kuwait, relating to its invasion of the country in 1991.

(Source: Tehran Times, AKnews, UN Compensation Commission)

(Photo: the disputed Shatt al-Arab waterway)

AFP reports that Iraq’s privately-owned banks have called for the country’s state-owned lenders to be privatised, to break up a near monopoly in lending by politicians whose actions remain stuck in the Saddam-era.

Although foreign cash has flowed in since the US-led invasion of 2003, ministers still opt to use government banks to do business and are failing to use private rivals, which is hampering economic growth, bankers argue.

The lack of a new government and poor security are also stifling efforts among international banks to plant a solid foothold in Iraq, whose economy, with the exception of oil, is showing little sign of improvement despite low inflation and a stable currency.

Fouad al-Hassani, chairman of the Iraqi Private Banking League, said the next government should privatise the seven state-backed lenders to create a level playing field among banks, as promised under the constitution.

“Unless they are privatised the government will still lean on their own banks,” he said. “That is not in line with an open market policy.

“We are looking for a new government so that we can talk to them again. The constitution is very clear on what they should do.”

Iraq currently has 36 privately-owned banks, most of them each holding capital of 50-150 million dollars, compared to 17 private banks during the rule of dictator Saddam Hussein, ousted in the invasion.

Aswat al-Iraq reports that the Iraqi Industry Ministry has reached agreement with a Chinese producer to assemble 10,000 Chinese cars in Iraq.

The ministry is also currently in negotiations with a French producer to assemble trucks in Iraq. IBN believes the truck-maker to be Renault.

“This should be the first step toward establishing an automotive industry in Iraq to cover the country’s local demand on cars,” the Ministry said.

It noted that the negotiations with the French producer have reached their final stages.

(Source: Aswat al-Iraq)

Iraq has intensified efforts to resolve its debt problems with neighboring Kuwait, in order to end the international restrictions imposed on the country following the invasion of Kuwait two decades ago, said Iraq’s deputy foreign minister.

Iraq was placed under United Nations’ Chapter 7 status in 1991 after Saddam Hussein invaded Kuwait.

Speaking to AKnews, Labid Abawi said, “Iraq is committed to the U.N. Security Council’s resolutions and works to close this dossier (of debts) as soon as possible.”

Iraq has paid off $30.1 billion so far but needs to pay another $22.3 billion.

The Chapter 7 terms have restricted Iraq efforts to equip the army to protect its borders and do not allow it to import certain chemicals and other items.

Kuwait has repeatedly refused to end Iraq’s Chapter 7 status saying Iraq first needs to pay off its debts fully, settle its territorial disputes with Kuwait and provide clear answers as to the fate of the Kuwaitis who went missing during the war.

(Source: AKnews, UN Compensation Commission)

(Photo: Kuwaiti oil fires, Desert Storm, 1991)

We launch our new Jobs in Iraq page today on the IBN web site in response to reader demand. This is a free reciprocal service for Recruitment Agencies and Employers with jobs on offer in Iraq. For readers it provides a welcome source of employment options in a country crying out for skilled labour and competent management.

Oil & Gas, Construction & Engineering, Public works, Agriculture , Education, Communications, and Transportation are all sectors where skilled people are needed.

If you have vacancies in Iraq contact Antony Wakeham on www.iraq-businessnews.com or email antony.wakeham@iraq-businessnews.com. The service is free on a reciprocal link basis.

A total of 19 new projects will be built at the al-Shieb border crossing as part of Missan Investment Commission’s (MIC) plan to encourage investment and tourism in the province, the director of the MIC said on Tuesday.

“The projects site covers 100 donums [25 hectares], and will include hotels, restaurants, garages and banks as well as storage facilities for food and medical products,” Dr. Raed Saai told Aswat al-Iraq news agency.

Amara, the capital of Missan, lies 390 km south of Baghdad.

(Source: Aswat al-Iraq)