US embassy cable - 03THEHAGUE1523

UNCLAS SECTION 01 OF 02 THE HAGUE 001523 
 
SIPDIS 
 
EB FOR A/S WAYNE 
EUR/UBI FOR M. NORMAN, EUR/NCE FOR S.CLARK, EB/IFD FOR 
AMONSARRAT 
 
E.O. 12958: N/A 
TAGS: EAID, ECON, IZ, NL 
SUBJECT: DUTCH TASK FORCE PREPS BUSINESS SECTOR FOR ROLE IN 
IRAQ RECONSTRUCTION 
 
1.   Summary.  About 300 businesspeople attended a conference 
on Iraq reconstruction that was staged on June 6 by the GONL 
and the Dutch Association of Chambers of Commerce.  The GONL 
gave a positive but realistic assessment of business 
opportunities in the Iraq and pledged the government's help 
through its newly opened mission in Baghdad.  The GONL and 
Chamber see advantage in the large number of Dutch-resident 
Iraqis and in the favorable reputation of the Dutch 
government and Dutch companies abroad.  Development of the 
financial sector was identified as one of the most pressing 
needs for the business community.  While the presenters were 
frank about the challenges ahead, the MFA had praise for 
Ambassador Bremer's management.  Turkish and Kurdish audience 
members, who made up a large portion of the attendees, 
questioned the speakers about the lack of access to Northern 
Iraq via Turkey and expressed concern that the region was 
being overlooked in the reconstruction process.  End Summary. 
 
2.     On June 6, the Dutch "Task Force Iraq" hosted a 
conference in Rotterdam for Dutch businesses interested in 
Iraq reconstruction.  The Task Force is made up of the Dutch 
Association of Chambers of Commerce, the Netherlands Council 
for Trade Promotion, the MFA, and the Ministry of Economic 
Affairs.  Speakers included MFA Director General for 
Political Affairs Herman Schaper, MEA Director General for 
Foreign Economic Affairs Dirk Bruinsma, officials from the 
newly-reopened Dutch embassy in Baghdad, representatives of 
the Chamber of Commerce, and a vice president of ING bank. 
State Secretary for Economic Affairs Karien Van Gennip also 
spoke, making her first public appearance in her new 
position.  (Note:  Van Gennip will handle trade promotion for 
the MEA.) 
 
3.     Schaper highlighted the GONL role in post-conflict 
Iraq including:   humanitarian contributions, support for 
World Bank needs assessment/call for experts, EUR 3 million 
from MEA to support NL businesses, possible MFA support for 
human rights and justice programs. 
 
4.     The presenters gave an optimistic but realistic 
assessment of business opportunities in Iraq.  Andre 
Westerlink of the Royal Netherlands Embassy in Washington 
urged attendees to see Iraq as a broad spectrum of 
possibilities -- USAID subcontracts, World Bank subcontracts, 
UN agency and large NGO grants, and straight 
business-to-business points of entry.  The presenters also 
inventoried the hurdles companies might face including but 
not limited to security.  Herman Schaper of the MFA said Iraq 
is paying a "heavy mortgage of its past tragedies." 
Dependence (on food, etc.) has had a detrimental effect on 
initiative and independence.  The ethnic and religious 
divisions in Iraq society will provide a challenging 
environment to prospective business entrepreneurs. 
Neighboring countries have designs on Iraq and will work to 
give certain ethnic groups the upper hand in the country's 
affairs.  Competition will be stiff.  Schaper encouraged 
Dutch businesses to build on local capacity whenever 
possible.  He also urged companies to think long-term and to 
resist short-term profit taking.  Schaper and MEA official 
Bruinsma offered the assistance of the Dutch Embassy in 
Baghdad, which is now staffed by four officers including 
Econ/Commercial Counselor Mr. Lodi Embrechts (former ConGen 
of Royal Netherlands Embassy Dubai).  The Association of 
Chambers of Commerce and Council of Exporters are considering 
a possible trade mission to Baghdad. 
 
5.     Bruinsma also noted that Iraq's financial sector must 
be developed in order that business transactions can take 
place efficiently.  Ms. A. Meering, Vice President of ING 
Bank, gave an overview of the current financial sector needs: 
 privatization of state banks, transparency, a legal 
structure, and a new currency.  She noted the work of the 
U.S. Treasury team on reinventing the Central Bank in Iraq. 
 
6.     The Dutch Charge D'Affairs in Baghdad, Mr. T.A. 
Reinjes, identified what he sees as several advantages Dutch 
companies will have in Iraq.  First, 50,000 Iraqis live in 
the Netherlands.  Second, the Dutch have a "low political 
profile."  Third, the Dutch have a reputation for quality and 
trustworthiness.  On the subject of ORHA/CPA, Reinjes said 
the situation has improved markedly under Ambassador Bremer 
and that average Iraqis do not want Americans to leave just 
yet. 
 
7.     Audience members had pointed questions for the 
presenters.  The majority of these questions were from 
Turkish or Kurdish members of the audience, who commented on: 
 
-- closed borders between Northern Iraq and Turkey; 
-- the lack of international community focus on economic 
opportunities in Kurdish areas, despite a relatively active 
business sector in the region; 
-- concerns that Turkish firms would be penalized for their 
government's prewar political decisions. 
SOBEL