- The Washington Times - Thursday, August 6, 2009

ON BASE WITH GRACE column:

Despite all the hard work America has done to bring security to Iraq, it appears that other nations are reaping the financial rewards, former Defense Secretary William S. Cohen said in a recent interview at The Washington Times.

He warned that American companies are not taking advantage of the business opportunities in the region as assiduously as they should.

“There is a vacuum being filled by other nations,” said Mr. Cohen, who has made six trips to the Middle East in the past 18 months. He heads the Cohen Group, a global consulting firm he founded in 2001, shortly after he left the Clinton administration.

Mr. Cohen’s observation is astute. Among the countries best poised to benefit from improved conditions in Iraq is China. The Iraqi government is sponsoring the state-owned China National Petroleum Corp. (CNPC) in partnership with BP PLC to develop the Rumaila oil field into the second-biggest in the world.

CNPC secured this sweet deal by asking for far less of the proceeds than other firms competing for the same contract.

In addition, another state-owned Chinese company, Sinopec, is moving into Kurdistan to tap into a large oil field in Kirkuk. Sinopec paid $7 billion to take over an oil company already active in the area. Those two moves render China the likely winner of the oil sweepstakes in Iraq.

Furthermore, European nations also are seizing the manifold opportunities available. Austrian and Hungarian utility firms have signed multibillion-dollar deals to transport gas from Kurdistan to Europe. In May, Britain showcased investment proposals of $10 billion during a London conference. Also, French and Belgian representatives have traveled repeatedly to Iraq in the past few months to promote trade and investment.

Iraq’s neighbors and other nations from the region also are jumping into the fray. An Iraq International Fair held in southeastern Turkey in May attracted about 700 companies from 20 countries. Entrepreneurs from Turkey, Jordan, Syria, Lebanon, Saudi Arabia, Kuwait, the United Arab Emirates, Egypt and Iran are exploring opportunities in the agriculture-and-food industry, in energy and in building materials. They also are seeking opportunities to develop commercial and industrial goods.

The Iraqi government is inviting greater foreign investment. Iraq’s National Investment Commission is trying to attract $500 billion within the next six years for reconstruction and development. Funds are desperately needed to repair the country’s infrastructure. The current economic downturn has further aggravated the situation, forcing the Iraqi government to make large cuts in its budget.

Yet American investors have been slow to take advantage of the situation. Many are wary of the climate of corruption, according to U.S. Ambassador to Bahrain Joseph Adam Ereli. The burdensome laws that curtail foreign investments (such as not allowing foreigners to own land), a cumbersome bureaucracy and the lack of security also are detracting investments, as acknowledged by leading Iraqi officials.

The Iraqi government is working to reform the laws to foster a more amenable climate. To further welcome American businesses, a two-day U.S.-Iraq Business and Investment Summit will be held Oct. 20 and 21 at the U.S. Chamber of Commerce in Washington. The chamber is the world’s largest federation of businesses.

“While we must remain vigilant against violence in Iraq, the time has come to begin shifting our focus from security to prosperity,” said Thomas J. Donohue, the chamber’s president and chief executive officer, during an Iraq Business Initiative session attended by Iraqi Prime Minister Nouri al-Maliki during Mr. Maliki’s visit last month to Washington.

The October conference will highlight the achievements that have been made in Iraq and point out opportunities available to investors.

America has spent more blood and treasure than any other nation in toppling the dictatorship of Saddam Hussein and then curtailing the violence of the insurgents. It is time to reap at least some of the rewards of all our hard work.

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