Wednesday, September 05, 2007
$760 mn. into Iraqi businesses making slow progress
Industry
(AP) -- Efforts to rebuild Iraq's shuttered industrial base, including an infusion of $760 million in U.S. funds over the past year, is making slow progress but has had little success getting Iraqi products to American consumers. Paul Brinkley, deputy under secretary of defense in charge of business transformation, said Tuesday that the U.S. government spent $180 million of that total in July alone on Iraqi goods and services.
But he acknowledged that U.S. companies, which have many questions and concerns about production and stability in Iraq, are still slow to stock Iraqi products. Considering the state of play in Iraq, Brinkley said, people are cautious about placing orders for Iraqi goods. Fawzi Hariri, Iraq's minister of industry and minerals, told Pentagon reporters that the unemployment rate in his country is about 40 percent, but that number is an improvement of 7 to 10 percent over last year.
Underscoring the difficulties, Brinkley said that "measurable progress" has been made in putting Iraqis back to work. Conservatively, he said, that number so far is just 5,000 people in 17 different factories.
Speaking at a Pentagon briefing, Hariri and Brinkley said they have earmarked $40 million of the $50 million that Congress approved earlier this summer for economic development in Iraq. The funding will go to about 30 Iraqi businesses scattered across the country, mostly around Baghdad and up in the largely Kurdish north.
The factories are in more secure areas of the country and include automotive, mechanical, textile, cotton, pharmaceuticals and fertilizer businesses that are either private or state-run.
Most of the money will go toward training, buying raw materials and getting the factories up and running again. Of the 240 factories operating before the war began, about 175 are open now, but many are at just 10 to 30 percent production capacity.
But he acknowledged that U.S. companies, which have many questions and concerns about production and stability in Iraq, are still slow to stock Iraqi products. Considering the state of play in Iraq, Brinkley said, people are cautious about placing orders for Iraqi goods. Fawzi Hariri, Iraq's minister of industry and minerals, told Pentagon reporters that the unemployment rate in his country is about 40 percent, but that number is an improvement of 7 to 10 percent over last year.
Underscoring the difficulties, Brinkley said that "measurable progress" has been made in putting Iraqis back to work. Conservatively, he said, that number so far is just 5,000 people in 17 different factories.
Speaking at a Pentagon briefing, Hariri and Brinkley said they have earmarked $40 million of the $50 million that Congress approved earlier this summer for economic development in Iraq. The funding will go to about 30 Iraqi businesses scattered across the country, mostly around Baghdad and up in the largely Kurdish north.
The factories are in more secure areas of the country and include automotive, mechanical, textile, cotton, pharmaceuticals and fertilizer businesses that are either private or state-run.
Most of the money will go toward training, buying raw materials and getting the factories up and running again. Of the 240 factories operating before the war began, about 175 are open now, but many are at just 10 to 30 percent production capacity.
Labels: Fawzi Hariri, industry, Iraq, Paul Brinkley
Monday, July 02, 2007
Iraqi govt to privatise state-owned assets
Government, Investment
(Sunday Telegraph) - The Iraqi government has begun preparing the groundwork for what could be one of the biggest privatisations of state-owned assets. The Sunday Telegraph has learned that officials from the government have recently held talks with banking and legal advisers in London. City sources said Iraq's minister for industry, Fawzi Hariri, was looking to appoint advisers to draw up a memorandum of understanding to sell off the country's non-oil assets, ranging from petrochemical plants to construction companies, hotels and airlines, as early as this month.
The privatisation proposals could also include a massive extension of foreign participation in the oil industry. Sources close to the foreign ministry said the government believed it had struck a deal on the long-awaited hydrocarbon law which could see Parliament vote the legislation through in two weeks' time. If the legislation is passed, arrangements to allow foreign oil majors to enter into production-sharing agreements with Iraq's national oil company could then make it into the memorandum.
An executive at one of the smaller Western oil companies operating in Iraq said: "As you would expect, most of Iraq's non-oil assets are outdated and in pretty bad shape. But this would give people who wanted to operate in Iraq an opportunity to get in." The source added that Iraq's nationalised cement industry could be particularly attractive because the country's reconstruction will require a building bonanza.
However, sources cautioned that the move could simply be a sop to the American administration. The US Congress will consider a report on progress in Iraq in September and a privatisation programme could be presented as some kind of progress in lieu of any real improvement in the security situation. City sources said any instruction would be complicated by factionalism within Iraq's fragmented government. Hariri, while not ethnically Kurdish, is a member of the Kurdish democratic party.
Experts said investor appetite for Iraqi assets was relatively limited and was likely to remain so until the country's security improved considerably. But if attempts to privatise Iraq's non-oil assets went hand in hand with moves to open up the country's oil sector to foreign investment, they would have much greater appeal. The long-awaited passage of the hydrocarbon law is seen as critical to attracting foreign investment.
Smaller, maverick oil companies have already invested in Kurdish-controlled areas of Iraq, but the bulk of the oil is in the south and no oil major would consider investing without a reliable legal regime and a significant improvement in security.
The privatisation proposals could also include a massive extension of foreign participation in the oil industry. Sources close to the foreign ministry said the government believed it had struck a deal on the long-awaited hydrocarbon law which could see Parliament vote the legislation through in two weeks' time. If the legislation is passed, arrangements to allow foreign oil majors to enter into production-sharing agreements with Iraq's national oil company could then make it into the memorandum.
An executive at one of the smaller Western oil companies operating in Iraq said: "As you would expect, most of Iraq's non-oil assets are outdated and in pretty bad shape. But this would give people who wanted to operate in Iraq an opportunity to get in." The source added that Iraq's nationalised cement industry could be particularly attractive because the country's reconstruction will require a building bonanza.
However, sources cautioned that the move could simply be a sop to the American administration. The US Congress will consider a report on progress in Iraq in September and a privatisation programme could be presented as some kind of progress in lieu of any real improvement in the security situation. City sources said any instruction would be complicated by factionalism within Iraq's fragmented government. Hariri, while not ethnically Kurdish, is a member of the Kurdish democratic party.
Experts said investor appetite for Iraqi assets was relatively limited and was likely to remain so until the country's security improved considerably. But if attempts to privatise Iraq's non-oil assets went hand in hand with moves to open up the country's oil sector to foreign investment, they would have much greater appeal. The long-awaited passage of the hydrocarbon law is seen as critical to attracting foreign investment.
Smaller, maverick oil companies have already invested in Kurdish-controlled areas of Iraq, but the bulk of the oil is in the south and no oil major would consider investing without a reliable legal regime and a significant improvement in security.
Labels: Fawzi Hariri, Iraqi government, privatisation
Monday, April 09, 2007
Ministry of Industry hopes to attract $750 in investment
Business, Reconstruction
(Azzaman) - The Ministry of Industry is seeking investors willing to spend hundreds of millions of dollars to modernize 12 major Iraqi industries. The investors, whether local or foreign, are required to submit comprehensive plans on how to rehabilitate these firms to make them competitive in the face of foreign imports.
In return for their investments, the entrepreneurs will have a share in the products for up to 20 years. According to Industry Minister Fawzi Hariri, the country hopes to attract $750 million in investments that will cover major industries such as cement, glass, steel and petrochemicals.
The investors will have to adhere to certain conditions, among them a pledge to improve the living standard of workers and raise quality of products. Hariri said the Glass Works Factory in the restive province of Ramadi is in need of at least $50 million to modernize. The country’s petrochemical complex in the southern city of Basra requires up to $120 million, he said. The complex was once one of the largest and technologically most advanced in the Middle East.
Hariri said the steel factory, also in Basra, requires up to $220 million. He said the factory needed new boilers and fresh infrastructure. Iraq’s cement industry was in need of $360 million, Hariri said. The minister said the rehabilitation of these companies and several others was necessary to meet needs of reconstruction once security and stability return. However, he said, security was a necessity for the rehabilitation of these firms as investors, whether foreign or local would only be interested if they knew their entrepreneurial activities will eventually bear fruit.
In return for their investments, the entrepreneurs will have a share in the products for up to 20 years. According to Industry Minister Fawzi Hariri, the country hopes to attract $750 million in investments that will cover major industries such as cement, glass, steel and petrochemicals.
The investors will have to adhere to certain conditions, among them a pledge to improve the living standard of workers and raise quality of products. Hariri said the Glass Works Factory in the restive province of Ramadi is in need of at least $50 million to modernize. The country’s petrochemical complex in the southern city of Basra requires up to $120 million, he said. The complex was once one of the largest and technologically most advanced in the Middle East.
Hariri said the steel factory, also in Basra, requires up to $220 million. He said the factory needed new boilers and fresh infrastructure. Iraq’s cement industry was in need of $360 million, Hariri said. The minister said the rehabilitation of these companies and several others was necessary to meet needs of reconstruction once security and stability return. However, he said, security was a necessity for the rehabilitation of these firms as investors, whether foreign or local would only be interested if they knew their entrepreneurial activities will eventually bear fruit.
Labels: Basra, cement, Fawzi Hariri, glass, investors, Ministry of Industry, petrochemicals, Ramadi, steel
