Business thriving in north

A survey of 454 Iraqi businessmen has shown high levels of optimism about the Iraq's economic prospects. The survey was carried out by US based pollster Zogby International on behalf of the Center for International Private Enterprise (CIPE). Interviews were carried out in the cities of Baghdad, mainly Shi'ite Hilla and mainly Kurdish Arbil between 17 October and 2 December 2004. The interviewees are all owners of small to medium-sized companies and 69 percent confidence in a brighter future for their businesses. "What we're seeing is the rebirth of an Iraqi business community that is seeing opportunity," said CIPE president John Sullivan. In Sulaymaniyah, an increasingly prosperous city in Iraq's Kurdish northeast, you don't have to look far to find the reasons for such confidence. "You see this can of coke," said supermarket owner Jamal Mohamed Rahim. "Two years ago, you would have had to pay seven Iraqi dinars [approx US $1.00] for it to be brought from Turkey. Now, we buy from Dubai, for less than a third of that." Like the rest of Iraq, the Kurdish-controlled north was debilitated by sanctions between 1991 and 2003. And it wasn't just the international community blocking commerce with the outside world. The regime in Baghdad also did its best to undermine efforts by the autonomous Kurdish authorities to develop economically. The few international goods on the market in the north were smuggled in from Turkey, Iran or Syria, mainly by a small clique of wealthy businessmen with close links to the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK). These two parties still divide the north between them. "Before the war, importers had to pay tariffs to the KDP and the PUK, as well as at the border," Rahim told IRIN. "Now there is a five dollar charge per truck coming into Iraq. That's all." The resulting decrease in price has been accompanied by a rise in wages in some sectors. Before the war, low-ranking civil servants would have been content to earn the equivalent of $20. Now, they complain at anything lower than $300, observers say. The result, according to carpet importer Ahmed Haji Rasul, has been a radical change in consumer taste. "In the past, people made do with what they could afford," he told IRIN in the Sulaymaniyah bazaar. "Now they want colour-coordinated house interiors, European stuff. We've had to start importing from further afield." Consumer tastes have also been sharpened by new regulations permitting civil servants, whose have fixed salaries, to pay in installments. Turkish washing machines and sofas were once way out of peoples' financial reach. Now, according to the local agents for the Turkish companies Beko and Istikbal, they're all the rage. For Omar Haji Mahmud, who imports rice and sugar from as far afield as Pakistan and India, the greatest boost to business over the past two years have been improvements in communication. "Under sanctions, I couldn't even contact my family in Halabja, 70 km away," he joked. "Now, I can pick up my mobile and talk to Sri Lanka, if I want." Mahmud acknowledged that political connections still play an important role in business, quoting a recent local government decision to hand all cement imports to Iran to one company. Like other businessmen interviewed though, he was confident that the day of the monopoly is coming to an end. "A whole new generation of businessmen has sprung up since the war," he said, "with new ideas, new energy and international connections." But not everybody shares the optimism. Faced with the sight of hundreds of tonnes of cheap Turkish potatoes being trucked across the border every day, many local farmers are understandably concerned their livelihoods are at risk. Others point out that the boom in consumer spending has had not stimulated local industrial development. Cynics note that, with the exception of oil, the only thing Iraq exports is a vinegar-based salad sauce. "We're in danger of being swamped," said a concerned Mohamed Sadik Barzani, owner of a carpet factory in Barzan, a town three hours north of Arbil.