Chaos spurs Iraq small business

The sun was beating down, and even at 10 a.m. the temperature was hitting 100 degrees F. at a checkpoint outside the Coalition Provisional Authority headquarters in Baghdad. Mohammed al-Kubaisi was trying to find a piece of shade as he waited, hoping to make a business deal.

Mr. Kubaisi is chief executive of the Ahllia Insurance Co., and he'd already been waiting 45 minutes for an escort inside, he said, despite a previously scheduled appointment. The meeting would be considered simple in the US - a preliminary discussion of insurance rates, qualifications, and services - but nothing is simple in Iraq these days.

Whether Kubaisi got in or gave up after a longer wait in the blistering heat, a bigger issue still hangs in the air like the haze over Baghdad. What laws will govern business here?

"The question is, what will our role be?" in drafting a commercial code for an entire nation, asks George Handy, a senior fellow at the Center for Strategic and International Studies in Washington.

Mr. Handy helped coordinate the activities of government leaders and major corporations in Eastern Europe and Russia during the 1990s, and served 24 years in the US Army.

But, he says, Iraq "is a totally unique situation in comparison." For all the corruption and inefficiency of the former Soviet Bloc, there were still laws on the books and judges in courts, trying to work through the mess.

"We don't have a system in place in Iraq," Handy says. "We have a totally blank sheet of paper."

Kubaisi has a suggestion for the US occupation forces. "We have the training, we have the skills," to do administrative work and draft laws, he says. "Let us do it."

US officials and Iraqis agree that simple service deals are moving ahead, such as contracts to supply a certain amount of ice to coalition headquarters each month, or contracts for new uniforms for civil workers.

But if the task of drafting an entire commercial code in the midst of violence seems daunting, a partial answer is emerging at a more grassroots level - one that doesn't require approval from the Americans, Hussein, or anyone else.

Small businesses in Baghdad are stepping into the void, helped by the very lack of formal regulations and customs fees that multinational corporations consider part of all deals.

In the formal business sector, every step of any decision is slowed by the enormous difficulties of communication and translation. It's one thing to hold a casual conversation or even argue over politics, but quite another to draft legal contracts that both sides truly understand and are comfortable with.

A common experience for Westerners is having people earnestly plead for help in getting access to CPA officials. A casual meeting and conversation in a hotel lobby between this reporter and a Jordanian seeking a written permit to take used machinery out of Iraq led the man to spend much of the night "dreaming" of his good fortune, he later said, and of the wonderful help his new "friend" would be able to deliver - in setting up a meeting with L. Paul Bremer, head of the CPA.

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