Iraq Trip Report. Steve Lutes Director U.S.-Iraq Business Initiative U.S. Chamber of Commerce. July 2012

Transcription

1 Iraq Trip Report by Steve Lutes Director U.S.-Iraq Business Initiative U.S. Chamber of Commerce July 2012

2 Introduction The primary objective of this trip to Iraq was to have introductory meetings and establish useful points of contact with officials from the Government of Iraq, the Kurdistan Regional Government and the U.S. Embassy and Consulates as well as key leaders representing the Iraqi private sector. These meetings have laid the groundwork for future U.S.-Iraq Business Initiative (USIBI) activities and programs both in Iraq and Washington, DC for the remainder of 2012 and beyond. The trip to Iraq occurred from June 26 through July 3 and included visits to Baghdad, Basrah and Erbil. I took part in a variety of meetings for three days in Baghdad and was then joined by Lionel Johnson, the U.S. Chamber s Vice President for Middle East and North Africa Affairs, for the remainder of the trip following his brief visit to Amman, Jordan. To follow is a summary of the meetings that transpired and a conclusion cataloging next steps. Summary of Baghdad Visit I am pleased to report that I had three productive days of meetings in Baghdad. I would be remiss if I did not mention that I flew Austrian Airlines from Washington, DC to Baghdad connecting through Vienna. Day one in Baghdad took me beyond the International Zone for a meeting with the leadership of Legend Lands Co., which is the distributor for Microsoft in Iraq. I was especially impressed when I toured their Microsoft Learning Center, where the company trains Iraqis, enabling them to acquire varying levels of skills and certifications which empowers them to compete for jobs ranging from entry level administrative positions to more advanced stations in the IT sector. While appreciating that many in the U.S. business community hold perceptions on Iraq fueled by the drum of negative coverage by the U.S. media, Legend Lands Co. s CEO, Ahmed Izzedien (pictured), spoke bullishly of the long-term economic prospects for his home country and offered to work with USIBI in our efforts to provide American business leaders a more balanced and refined perspective on Iraq that better represents the complex political challenges, security improvements and economic opportunities that collectively constitute the reality in Iraq. Later in the day, I met with the Director of Iraq 2020, Dr. Ali Anbori, who is working directly with the Government of Iraq and relevant stakeholders to update and improve the business registration process to make it more transparent and efficient while reducing costs. Corporate registration in Iraq is the responsibility of Corporate Directorate within the Ministry of Trading under the umbrella of Corporate Law No. 21 of 1997, which was amended in 2004 by the Coalition Authority.

3 According to Dr. Anbori, for a company to register in Iraq, it would, on paper, take on average 77 days and cost thousands of dollars. The opportunities for bureaucrats to delay paperwork, request extra documents, etc. for each of the eleven required steps to register are numerous. Adoption of this reform package would improve the system for U.S. companies interested in doing business in Iraq and enhance the overall prospects for long-term economic progress. I also visited the Baghdad headquarters of the Iraqi Businessmen Union (IBMU), where I met with its Chairman, Mr. Raghib Bleibel, and several members representing a mix of industries, such as textiles, pharmaceuticals, and manufacturing, and geographies. The crux of their message was that they 'would like more American companies in Iraq,' and they stand ready to partner and work with U.S. firms representing all sizes and sectors. The idea of developing a Memorandum of Understanding (MOU) between the USIBI and the IBMU to facilitate commercial cooperation between the entities and their respective members was raised by the Chairman. On the second day of the trip in Baghdad, I attended a working group meeting at the U.S. Embassy held by the U.S.-Iraq Business Dialogue (USIBD), which is comprised of private sector representatives from both Iraq and the United States and jointly led by the U.S. Secretary of Commerce and the Iraqi Minister of Trade. The primary objective of the USIBD is to facilitate private sector business growth in Iraq and to strengthen trade and investment ties between the two nations. The meeting included representatives from the USIBI The Boeing Company and ExxonMobil. A set of recommendations (see attached) for regulatory, legal, and legislative reforms was drafted, approved and issued by the USIBD to the respective governments at an official meeting of the group on June 28 at the Al Rasheed Hotel. In addition to covering areas such as investment law, procurement policy, and intellectual property protection, a recommendation was made and adopted at the working group meeting to improve the facilitation of visas for American business people to enter Iraq. Specifically, the USIBD proposes to Establish a clear simple process for Americans to apply for a one-year, multiple entry visas at the Iraqi embassy and its consulates in the United States It is my intention to draft and send a letter on behalf of the USIBI supporting these recommendations and encouraging their implementation to His Excellency Khayrallah Hasan Babakir, Minister of Trade of the Government of Iraq, and The Honorable Rebecca M. Blank, Acting United States Secretary of Commerce. Also, given that the USIBD is a high-profile and revitalized platform that we have access to, I would ask for your input on issues that we can directly raise with the leadership of the U.S. section of the group and the staff at the U.S. Department of Commerce which coordinates its activities with their Iraqi counterparts at the Ministry of Trade. Both the American and Iraqi chairs of the respective private sector sections made clear their desire to hold the next round of discussions to develop new recommendations in the coming months to maintain momentum and build on their recent progress.

4 In addition to the USIBD meetings, the U.S. Department of Commerce and the Iraq Ministry of Finance co-hosted on June a symposium entitled Commercial Finance Conference: A Global Perspective. While I did not attend this conference, I obtained and attached for your review a copy of the presentations that were delivered over the course of those two days. On my last day in Baghdad, I visited IRATRAC, Caterpillar's distributor in Iraq. IRATRAC s Managing Director, Mr. Sherif Atalla, and his team provided an overview of the work they are performing in Iraq as well as a few of the challenges they (and other American) companies face doing business in the country. Summary of Basrah Visit Prior to traveling to Basrah where we met up, Lionel had a follow-up meeting to conclude a MOU between the U.S. Chamber of Commerce and the Iraq Business Council-Jordan providing for mutual cooperation in support of free trade, combating corruption and respecting patent laws in both Jordan and Iraq. The agreement aims to increase economic competitiveness in Iraq by supporting common programs, such as conferences and trade delegations. In Basrah, our most critical meeting was with Dr. Saad Hussein, Senior Advisor to the Governor of Basrah, Mr. Anton Smith, the Acting Consul General in Basrah, and members of his Economic and Commercial team. The discussion centered on two events slated to take place this fall with each intended to boost U.S. business interest in what is a vital commercial hub in southern Iraq with vast energy resources and the country s only deep water port. The first will be a visit to Washington, DC by His Excellency Dr. Khalaf Samad Khalaf, the Governor of Basrah, in September. We have extended an invitation for the Governor to visit and speak at the U.S. Chamber s headquarters. We will be coordinating this aspect of his trip to the United States with our friends at the U.S. Department of State and will of course open it up to our USIBI members. As to the second opportunity, we proposed to the Governor s Senior Advisor and the Consul General to collaborate to hold a Supplier s Conference in Basrah later this year with the timing to be done in conjunction with the Baghdad International Trade Fair in late-october/early- November to accommodate U.S. companies that may want to participate in both events. While the specifics of the proposed conference will have to be defined, the purpose would be twofold: first, to bring U.S. companies to the table in Basrah with a list of goods and services they desire to locally source and to meet capable Iraqi companies that they may want to do business with for this purpose; and second, to provide U.S. companies an opportunity to meet with officials responsible for significant projects in the Basrah Governorate to enable them to convey their capacity and interest in participating in these projects.

5 The idea to hold such a conference in Basrah later this year was well received by both the Governor s Senior Advisor and the Consul General, each of whom conveyed a willingness to work cooperatively as we proceed with planning. While in Basrah, we met with Mr. Subeh H. Al-Hashemi, Chairman of the Iraqi Businessmen Union-Basrah, and several of his board members. Also participating in this meeting was a Member of the Board of the Basrah Investment Commission (BIC) and the Chairman of the Planning Commission of the Basrah Governorate Council. The IBMU Chairman and his members expressed strong support for investment from and partnerships with the U.S. business community. The Chairman of the Planning Commission cited the Al Faw port project as a priority for the Basrah Governorate and welcomed American firms to compete for the associated tenders. This $6 billion mega port project is one of the top infrastructure priorities in Iraq. Our time in Basrah also permitted a tour of Sports City, a multi-purpose stadium and complex that is planned to host the 2015 Gulf Cup of Nations. In fact, we have learned of two substantial opportunities associated with the development of Basrah Sports City. First, is that they are seeking a sports/events management company to operate the facility, and second, there is a plan for a hotel adjacent to the complex that can be pursued. If you have interest in either project, please let me know. Summary of Erbil Visit The DC office of the Kurdistan Regional Government (KRG) worked in conjunction with the KRG s Department of Foreign Relations to develop our two-day itinerary in Erbil. As many of you know, Qubad Talabani, the Representative of the KRG to the United States, will be departing Washington, DC later this year to assume important new responsibilities in service to Prime Minister Nechirvan Idris Barzani. We are grateful for his exemplary service and his latest support of our visit to the Kurdistan Region. Our first day in Erbil, Lionel and I met with Mr. Kamran Ahmed Abdullah, the Minister of Construction and Housing (pictured); Mr. Jonson Ayo, the Minister of Transportation and Communication; and Mr. Bayez Talabani, the Minister of Finance. The Minister of Construction and Housing explained the prequalification process necessary to compete for construction projects in the Kurdistan Region which involves a business registering with the KRG and while a joint venture with a capable, local company is not obligated, it is a common practice to facilitate the process. He asserted that Turkish firms currently dominate the construction market in the region. The Minister described a master connectivity plan for cities in the Kurdistan Region that is to run through The plan is in the initial phase and will involve building roads, bridges and tunnels. In addition, plans are being

6 developed for significant construction projects of schools, hospitals and sewer systems and there is a need for firms with specialization in seismology. The Minister of Transportation and Communication discussed the need for expertise in managing airports as well as project opportunities in railways. The Finance Minister provided an overview of the KRG s budget and related that there are great opportunities for U.S. businesses in multiple sectors, including electricity, energy, health, agriculture, construction and housing. He also encouraged the American banking community to get engaged in the Kurdistan Region to help build their private sector banking sector. Meetings with Mr. Sinan Chalabi, the Minister of Trade and Industry, and Mr. Herish Muharam, Chairman of the Board of Investment, were the focus of our second day in Erbil. The Chair of the Investment Board offered to work directly with the USIBI to develop a strategy to attract U.S. investment in the Kurdistan Region. Like the meetings the prior day, the message was unequivocal: the door is open to U.S. businesses in the Kurdistan Region. Minister after minister sought to distinguish the region from the rest of Iraq and were perplexed that the Europeans, Turks and others had moved aggressively in to seize business opportunities in the Kurdistan Region while American businesses have largely been absent. Each minister voiced strong support for increased U.S. commercial engagement and offered to work with the U.S. Chamber on a future business mission. To that end, we intend to explore orchestrating a business mission this fall to the Kurdistan Region that would feature meetings with KRG officials responsible for project opportunities. Our second day in Erbil also included a meeting with the Kurdistan Federation Chambers of Commerce & Industry led by Mr. Dara Jalil Al-Kayat, President of the Kurdistan Federation and the Erbil Chamber of Commerce & Industry; Mr. Aead H. Abdulhalem, President of the Duhok Chamber of Commerce & Industry; and Mr. Serwan M. Mahmood, Chairman of the Sulaimani Chamber of Commerce & Industry. The leadership of the Kurdistan Federation Chambers of Commerce conveyed strong interest in establishing a MOU with the U.S. Chamber of Commerce to enhance relations and coordinate future activities together. Day two in Erbil included a meeting with Dr. Aras Khoshnaw, Executive Director of the Kurdistan Information and Strategic Studies Center (KISSC). In 2007, KISSC developed, in coordination with multiple private and public sector stakeholders, the Kurdistan Business Agenda (KBA), a comprehensive document outlining problems and proposed solutions across numerous sectors. According to Dr. Khoshnaw, an updated edition of the KBA will be published later this year that will detail progress made, areas for continued attention, and new issues that have arisen. Dr. Khoshnaw is not just an academic; he is also a businessman and his company is the distributor for several automobile companies, including General Motors. He shared with us insightful views on private sector development in the Kurdistan Region and the evolving relationship between the business community and government. We invited him to make a presentation on the Kurdistan Business Agenda to USIBI members when he visits Washington, DC in September.

7 Conclusion On this productive trip, we covered a lot of ground in a short period of time. Most importantly, we laid the foundation for future opportunities for USIBI members later this year and beyond. In terms of advocacy, I will draft and send a Letter of Support for the implementation of the USIBD recommendations issued on June 28 th in Baghdad. I would also request input from USIBI members for future regulatory, legal, and legislative reforms that I can channel to the U.S. section of the USIBD. As mentioned earlier, this is a high-status platform that we can utilize to advance our policy agenda. In terms of programming, we look forward to the September visit to Washington, DC by the Governor of Basrah and hosting him at the U.S. Chamber. Stay tuned for information as this event approaches. We will also host Dr. Khoshnaw in September for a review of the Kurdistan Business Agenda and a discussion on commercial opportunities in that region of Iraq. In terms of activities, we will begin planning a Suppliers Conference to be held in Basrah in late- October/early-November. This will be an outstanding venue for U.S. companies to explore potential commercial relationships and project opportunities in a critical region of Iraq. We will also explore organizing a business mission to the Kurdistan Region which could possibly be done in conjunction with the Basrah conference. If you have any questions about this report, please do not hesitate to contact me at slutes@uschamber.com or