US embassy cable - 03AMMAN3947

UNCLAS SECTION 01 OF 03 AMMAN 003947 
 
SIPDIS 
 
SENSITIVE 
 
USDOC FOR 4520/ITA/MAC/ONE/PTHANOS 
TREASURY FOR OASIA - LARRY MCDONALD 
 
E.O. 12958: N/A 
TAGS: ETRD, EINV, PINR, IZ, JO 
SUBJECT:  IRAQI BUSINESS COMMUNITY IN JORDAN MEETS CPA 
 
SENSITIVE BUT UNCLASSIFIED.  FOR USG DISTRIBUTION ONLY. 
 
1.  (SBU)  Summary.  In a meeting with CPA advisors 
visiting Jordan, a group of Amman-based Iraqi business 
people said that they controlled substantial capital and 
technical resources that they wanted to contribute to the 
reconstruction of Iraq.  In order to facilitate 
communication with the authority in Iraq, they are 
planning to form an association of expatriate Iraqi 
investors.  Among the first things they would call for 
was political risk cover for commercial investments in 
Iraq, at least until new Iraqi commercial and legal 
institutions are up and running.  Although we do not know 
much about the background of the individual 
businesspeople, it could be useful to keep up a dialogue 
with them to see what they have to offer.  End Summary. 
 
2.  (SBU)  On June 24, following the World Economic Forum 
meetings at the Dead Sea, a group of Jordan-based Iraqi 
businesspeople met CPA economic advisors Reuben Jeffery 
and Eric Otto at the Intercontinental Hotel in Amman. 
Embassy Amman economic and commercial staff also sat in 
on the meeting, which was facilitated by Jordanian 
businessman Husam Deranieh.  The businessmen were Iraqis 
who said they have been resident in Jordan for many years 
but who retained business and personal interests in Iraq 
and continued to do business there under the UN Oil for 
Food Program and the bilateral Jordan-Iraq trade 
protocol.  The businessmen said that they were interested 
in working with CPA to become active in investing and 
trading in Iraq. 
 
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Difficulty Communicating 
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3.  (SBU)  The group's main concern was an inability to 
establish clear lines of communication with CPA to 
discuss investment and business opportunities.  For 
example, they had variously tried to be in touch to offer 
assistance in providing catering and duty-free services 
at BIAP or to quickly set up a 50,000 line wireless 
telecom network in the Basra area.  While their initial 
email messages or phone calls were acknowledged, there 
had been little to no follow-up from CPA. 
 
4.  (SBU)  The Iraqis said that they had been more 
successful in establishing working relationships with 
local coalition military commanders on the ground.  This 
had allowed them to start up some local activities that 
affected Iraqi citizens' lives on a small scale. 
However, these businessmen said that they had the 
financial capacity and know-how to operate on a national 
scale.  They said they had represented U.S. companies, 
had technical skills, large pools of potential employees, 
as well as the connections necessary to guarantee 
security (see bio information below). 
 
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An Expatriate Iraqi Investors Association? 
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5.  (SBU)  Jeffery described plans to establish a 
business help center in Baghdad in the near future that 
could serve as an initial point of contact.  The 
businessmen said they were planning to organize 
themselves as an association of expatriate Iraqi 
businesspeople that could deal on members' behalf with 
CPA and Iraqi ministries.  They said business 
associations in Iraq with which CPA appeared to be 
already communicating (such as the Iraqi Businessmen's 
Association) were tainted by association with the former 
regime. 
 
6.  (SBU)  The group also said that as expatriate Iraqis 
resident in Jordan, they would be well-accepted by the 
Iraqi people.  They said that CPA appeared to be dealing 
with Kuwaiti and Gulf businesspeople, which most Iraqis 
would find offensive.  For instance, the businessman who 
said he had offered to set up a mobile phone network in 
Basra in three weeks (Dr. al-Sadi), had been disheartened 
to learn that a Kuwaiti company had been selected to do a 
similar job.  A few major projects with Iraqi business 
participation would, they thought, go a long way to 
bolster the Coalition's image among Iraqis. 
 
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Looking for Cover 
----------------- 
 
7.  (SBU)  The businessmen said that they were ready to 
take financial and business risk in investing and trading 
in Iraq.  However, they felt that there was a necessary 
role for the types of political risk cover provided by 
institutions like the International Finance Corporation 
and OPIC.  Such guarantees would be especially important, 
they said, until new financial and legal institutions 
were established in Iraq.  They said official export 
credits would also be very helpful in providing Iraqi 
businesspeople with the resources to finance imports. 
 
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Comment 
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8.  (SBU)  There is indeed a significant Amman-based 
Iraqi business community that was active in trading with 
Iraq during the sanctions period.  Members of this 
community are not well known to the embassy, with which 
they avoided contact during the sanctions years.  Some of 
them may have been involved in activities that we could 
not condone.  Nonetheless, business people like the ones 
we met probably have financial capital, technical 
capacity, and knowledge of the situation on the ground in 
Iraq to which we would not otherwise have access, either 
inside or outside Iraq.  It could be useful to keep up a 
dialogue with them and see what they are actually able to 
deliver.  Following is bio information gleaned from 
participants in the meeting that may be useful to CPA and 
Washington agencies. 
 
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Bio Notes 
--------- 
 
-- Jalal Al-Gaaod is a member of the Dulaim tribe of 
central Iraq and General Manager of Nass Lubricants and 
Chemicals Plant, which was involved in the oil-for-food 
program prior to the end of sanctions.  His brother Talal 
al-Gaaod runs companies for importing and servicing 
agricultural machinery.  Both were also involved in the 
oil-for-food program. 
 
-- Dr. Majid al-Sadi is the Basra-born chairman of 
Eastern Investment Group, a holding company with 
interests in industrial and telecom sectors.  The group's 
most prominent component is its partnership with the UK 
Alpha group, in providing in-flight catering services at 
Amman's Queen Alia Airport.  (Mr. Lionel Wilton, UK 
citizen and Alpha employee also sat in on the meeting.) 
 
-- Dr. Fouad al-Zubaidi is the chairman of Union 
Marketing Company, a holding company for various chemical 
and industrial companies.  Among other things, the 
company produced detergents for export to Iraq under the 
bilateral trade protocol. 
 
-- Ali Al-Khawwam is the General Director of the Riyadh 
Investment Companies Group, which has been in operation 
for 15 years in Jordan and has operated in Iraq during 
the past ten years as a contractor dealing with 
industrial projects there.  According Khawwam, the Group 
owns the largest food and detergent factories in Jordan. 
 
-- Ahenis Al-Jabori is general manager of Winter 
International, Ltd., a conglomerate with interests in air 
conditioning manufacturing, telecommunications, oil and 
gas, and the health sector (in which Al-Jabori claims 
ownership of one of the two or three largest firms 
present in Iraq).  Al-Jabori said he had substantial pre- 
sanctions experience in Iraq as an agent for foreign 
corporations attempting to do business in Iraq, including 
a joint venture with General Motors and with Mercedes to 
provide automobiles for the Iraqi market that was 
launched in 1988 before being abandoned. 
GNEHM