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Weapons of Mass Destruction (WMD)

29 March 2007

United States Helps Reopen Iraqi Industrial Facilities

Goal is to reconnect Iraq with foreign markets, U.S. official says

Washington -- The U.S. Department of Defense, in partnership with the Iraqi government, is working to reopen idle Iraqi industrial facilities and connect them to international markets to create jobs and revitalize the country’s economy, says a senior Defense official.

“What we see among the business community there and among the population is the desire to engage in economic activity, to have normalcy restored, to have employment and benefits that accrue from employment,” Deputy Under Secretary of Defense for Business Transformation, Acquisition, Technology and Logistics Paul Brinkley said at a Pentagon briefing March 28.

Under the Defense Department’s initiative, teams of experts have identified some 200 idle Iraqi factories, 140 of which the United States believes are in good shape and could be put back into production. Since November 2006, the teams more closely surveyed 56 of those plants and identified ways of restarting them, Brinkley said.

Since December 2006, the Defense Department also has been sending to Iraq groups of business leaders from the United States and other countries to let them learn about investment opportunities and encourage them to buy goods from Iraqi producers.

“If the Iraqis can make a good that you’re acquiring today on the international market and it can be shipped, we’re asking you to buy it. We’re asking you to consider sourcing [your] material from Iraq,” Brinkley said. He added that the department wants to offer Iraqi producers an opportunity to engage “in a natural process of competing for international business.”

The Defense Department initiative helped open a large, state-of-the-art textile factory in Najaf, whose products will hit the U.S. market before the end of 2007, he said.  Two other recently reopened plants are a ceramics factory in Ramadi and an automotive factory near Baghdad, according to Brinkley.

In addition, the department is trying to create a call center in Kurdistan to provide customer services throughout Iraq in several languages spoken in the country.

The estimated cost of restarting the 56 surveyed factories will be around $50 million, Brinkley said, because most of them need only a small amount of investment and technical upgrading. The money will come in the form of loans from the Iraqi Finance Ministry, he said.

Brinkley also said that under the Coalition Provisional Authority, which was established in 2003 as a transitional Iraqi government and dissolved in June 2004, official policy opposed the revitalization of state-owned plants to encourage the emergence of the free market. This approach was modeled on the “shock therapy” after the fall of communism in Eastern Europe, where many state-owned industries quickly were shut down or privatized.

Though the emergence of a free market and private sector is still a consensus goal in Iraq, a more gradual approach to a transition from the state-controlled economy is gaining support, he said.

“We have this industrial base that we can reinvigorate and restore employment to a sizable number of people … and then begin a transition to a private-sector state,” Brinkley said.

He added he believes that by the end of 2007 some of the restarted factories will begin to privatize and said that there already are companies interested in entering into joint ventures with them.

But to attract private investors, one needs “a skilled work force, an industrial base of some sort, and access to demand,” Brinkley said.

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)



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