German Firms Slow to Enter Iraq

Three wars, thirteen years of economic embargo, and continued terrorist attacks have severely damaged the Iraqi economy and infrastructure. With 80 percent of the population living below the poverty line, two thirds unemployed, insufficient water and electricity supplies, painfully poor medical care and a volatile security situation, there is endless work to be done.

So far, however, German firms have been slow about coming forward to support the reconstruction. A two-day German-Iraqi economic conference wrapping up in Berlin on Friday is geared towards encouraging reluctant investors, and serves as a forum for hundreds of German companies to meet with representatives of Iraqi companies and authorities.

So what's the problem? Speaking to the dpa newsagency on Friday, Jochen Münker of the German Chamber of Industry and Commerce (DIHK) said the security situation across much of Iraq is the main hurdle preventing German companies from jumping in en mass. He added that the best way to introduce new business into the country is to work with local partners and Iraqi workforces.

In an interview in Friday's Handelsblatt newspaper, the Chairman of the Association of Iraqi Chambers of Commerce, Abud el Tufaily, echoed Münker's advice, calling on German companies willing to invest in Iraq to team up with a local partner. "Only the Iraqis know how the country works at the moment. They are the only ones who know which streets are safe, and where it is safe to move about," El Tufaily said.

Picking up past links

Although German industry could be doing more to help get the war-torn nation back up and running, the DIHK says an increasing number of German companies with previous links to Iraq are trying to breath new life into their old contacts.

These contacts go back a long way -- right back to the 19th century, when German and Iraqi engineers co-constructed the Baghdad railway. German companies were later involved in the construction of the Tigris dam near Mossul, cement factories, brick works and power stations across the entire country and to the international airport at Basra.

Secretary of State for the Federal Ministry of Economics, Alfred Tacke, is confident that past relations will stand Germany in good stead for a future role in the new Iraq, and that German companies will play an important role in the economic reconstruction. "My optimism stems from the fact that German companies have long had an excellent reputation in the Far and Middle East in terms of the quality, technology and reliability of their products and projects," Tacke said.

Fertile land

Following oil, agriculture is the second most important sector of the Iraqi economy, but as it stands, merely a quarter of the fertile land is actually used for reaping and sowing. And with a meager ten percent of the nation's work force currently employed in farming, the Iraqi Agriculture Minister Abdul Amir Al-Abood has called on representatives of the German economy to help plough the path for the country's agricultural future.

Once power has been handed over to a legitimate Iraqi administration, that should open even more doors for German investors and businesses. As it stands, the US has barred countries who were not part of the war coalition from bidding for reconstruction contracts. Once that changes, German companies will be at liberty to bid at will.