Despite a trillion dollars spent trying to stabilise Iraq, American companies are losing out when it comes to winning deals in the country.
Business opportunities are booming despite the obvious dangers, yet Turkish, Iranian, and Russian companies appear to be having far more success than American ones when it comes to receiving funds directly from the Iraqi government, as opposed to U.S. reconstruction funding.
It’s obviously difficult to discern the exact reasons from a distance. One simple reason at least is that security costs are far higher for American companies. In addition, there are surely cultural issues having to do with America’s military presence.
As the New York Times reports, being ‘the occupier’ substantially disadvantages American businesses when they pitch for deals. In contrast, less involved non-coalition countries have been quite successful. Iran has been too, which makes sense given their Shia ties. For the United Arab Emirates, it’s been a bonanza even.
New York Times: While Iraq’s imports nearly doubled in 2008, to $43.5 billion from $25.67 billion in 2007, imports from American companies stayed flat at $2 billion over that period. Among investors, the United Arab Emirates leads the field, with $31 billion invested in Iraq, most of that in 2008, compared to only about $400 million from American companies when United States government reconstruction spending is excluded, according to Dunia Frontier Consultants, a emerging-market analyst. “Following this initial U.S.-dominated reconstruction phase, U.S. private investors have become negligible players in Iraq,” Dunia said in a report.