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Last Updated: Wednesday, 25 February, 2004, 07:23 GMT
Iraqi 'powerhouse' woos UK firms
By Bill Wilson
BBC News Online business reporter, at the Iraqi trade conference

Dr Ali Allawi
Dr Allawi: Wants UK firms to invest in Iraq infrastructure development

Judging by the number of business cards being pressed into the hands of Iraqi trade minister Dr Ali Allawi, there are many UK firms very keen on doing business in the Middle Eastern country.

Representatives of more than 150 UK companies had gathered at Great George Street in London to hear him put the case for more UK firms investing in Iraq.

Alternating fluently to deal with queries in English and Arabic he reiterated the case that, despite continuing outbreaks of violence, Iraq is a country where the British are welcome.

"The whole country needs to be rebuilt and I hope that UK firms will be able to help that process," he said.

What will happen? Is there going to be privatisation? It adds an air of uncertainty which is not helpful at the moment.
Dr Mostafa Ali Bazergan, Iraq Infosearch

The best opportunities would be investing in longer-term projects such as selling consumer goods, he said.

"There are many successful markets where UK firms can get involved, an entrepreneurial culture, and increasing consumer confidence.

"Whether they win contracts or not should be down to competitive bidding and no other factors."

Areas where UK firms could bid for work included infrastructure development, communications, healthcare, water and banking, he said.

'Growth opportunity'

One of those attending the conference was David Herman, director of development at services and engineering firm Amec.

"We have a joint venture in Iraq with US firm Fluor," he told BBC News Online.

"We are in country working on a massive project providing facilities.

"We are bidding for other major contracts. It is a growth opportunity for UK companies and think there will be many others looking to win contracts there."

Amec's contract is for the Restore Iraqi Electricity, but there have been accusations that most of the major contracts are going to US firms.

Oil worker in Iraq
US firms have won major contracts to repair oil fields

Recently work worth $2bn to help repair the war-torn country's devastated oil and gas industry was awarded to US firms.

However Tom Foley, head of private sector development at the US-led Coalition Provisional Authority in Iraq, said UK companies were not being disadvantaged.

"We believe there is a great opportunity there. Iraq is going to be a big economy with rapid growth rates," he told BBC News Online.

"We think it will be the economic powerhouse of the Middle East, and we think UK firms should establish a strong position and take advantage of this fantastic opportunity.

"There has been interest from UK firms of all sizes and I am very confident there will be continued interest."

'Situation will improve'

There has been continued violence in Iraq since the official ending of hostilities.

The trade brochure inviting UK firms to consider Iraq contains a list of 19 private security companies they may want to hire.

"There is a security problem, there is no doubt about that," Dr Allawi acknowledged.

But most of the country is relatively secure, he insisted.

"By and large, I think the situation will improve and Iraq should be little different from certain parts of the developing world where things may not be 100% up to international security standards," he said.

He also hinted at forthcoming sales of state owned assets.

"Privatisation could be introduced over a wide range of activities. If it is better for the public for market criteria to be applied, then they will be," Dr Allawi said.

"There have been a number of state companies which have been mismanaged in recent years, and which cannot be supported. However this will be looked at on a case-by-case basis."

He said unemployment was coming down, "to between 20-28%", and that oil price and production issues were being addressed.

'Conflicting messages'

But a London-based consultancy said Dr Allawi and the US-led administration was "painting too rosy a picture".

"We are getting conflicting messages out of Iraq," Dr Mostafa Ali Bazergan of Iraq Infosearch told BBC News Online.

"There is a lot of talk about privatisation and it is lurking there in the shadows, but no-one is clearly explaining what it might entail.

"What will happen? Is there going to be privatisation? It adds an air of uncertainty which is not helpful at the moment.

"The most important thing is dealing with unemployment. I believe the unemployment figure is many times the official figures.

"They should be trying to relieve this problem before talk of privatisation."

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