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Arabs' role in rebuilding

By Danna Harman / April 28, 2003



AMMAN, JORDAN

It's rebuilding time in Iraq, and everyone wants a piece of the action. Including Khaled Kurdi, deputy general manager of this kingdom's largest steel company, Jordan Steel. Mr. Kurdi wants to see his wedged rods and bars everywhere in the new Iraq: reinforcing new hospitals, holding up the new ministries and, of course, bringing in revenue.

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He never liked the war in Iraq, and is none too enamored of the United States these days. But, says the Stanford graduate, business is business, and there are tens of billions of dollars worth of reconstruction contracts to be parceled out.

Resentment and fear of the US will not fully subside, local people say, until American troops leave Iraq and a lasting solution to the Israeli-Palestinian problem is found. But a little sharing of the spoils of war could go a long way toward making amends.

Indeed, the State Department has begun contacting Arab countries and companies, encouraging them to prepare bids to rebuild Iraq. It's hoped that such ventures can provide benefits all around: Subcontracting businesses can share their regional expertise, strained relationships between the US and the region will have a chance to mend, and the lengthy process of renewing Iraq's infrastructure can begin.

"The invasion is over. Now it's time to build bridges in the region, and the US would be wise to think about this and work with the neighborhood," says Kurdi.

Subcontracts the way to go

At a regional meeting last week in Riyadh, Saudi Arabia, to discuss Iraq's future, Gulf bankers admitted there were virtually no Arab contractors large enough to win the big contracts (even if they were allowed to bid, which so far has not been the case). But, they stressed, local firms are expecting subcontracts.

Bechtel Group Inc., the San Francisco engineering and construction company just awarded a $680 million contract to rebuild Iraq, seems to understand this expectation. The US Agency for International Development (USAID) - which is responsible for awarding $2.4 billion in contracts - said in a press release that "it is anticipated that Bechtel will work through subcontractors with regional experience and close contacts in Iraq on many of the reconstruction tasks."

Priority in awarding regional bids, say businesspeople here, should be given to those countries in the region that assisted the US. And, while the leadership in Jordan, like that in Egypt and several other Arab countries, spoke out against the war, they were officially neutral in the conflict. Jordan's King Abdullah was careful not to condemn the US too strenuously, worked to contain protests at home, and even gave some quiet support to Washington.

"Our government was neutral," says Tariq Rabadi, an analyst at Jordan's Atlas Investment Group. "And that should be considered as well ... along with the competitive edge of many of our companies."

Atlas Investments put out a report on the eve of the war assessing possible outcome scenarios and looking at how Jordanian companies might benefit from a reconstruction period. The report estimated that exports to Iraq would increase by 20 to 30 percent, boosting all other sectors, such as banking, insurance, and transportation. As it stands already, Iraq is Jordan's largest trading partner, accounting for 22 percent of its exports.

Egypt's involvement

Meanwhile, the Egyptian newspaper Al-Alam Al-Yom reported last week that Egyptian companies, many of whom had been working before the war in Iraq under United Nations auspices, could potentially net as much as $10 billion in new subcontracts. Concrete, construction, and pharmaceutical companies, among others, told the paper they intended to submit bids.

Turkish columnist Asli Aydintasbas, writing in Ankara's Sabah newspaper, said US officials had made it clear that Turkish construction companies would have a part in rebuilding Iraq. "And so it should be," he opined. Iraq was Turkey's main commercial partner prior to the 1991 Gulf War, and last week Turkish Prime Minister Recep Tayyip Erdogan said that as the only Muslim democracy in the region, Turkey was ideally suited for both the political and physical reconstruction tasks. Ankara hopes for $20 billion worth of contracts over 15 years.

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