WASHINGTON – European and Asian companies are beating their American rivals into Iraq now that security has improved the investment climate.
“It’s starting to turn, and the people who are getting in on the ground floor are not American,” said Paul Brinkley, the Pentagon official who is leading U.S. efforts to help Iraq rebuild its economy. “It’s ironic.”
Foreign companies have committed to deals worth about $500 million so far this year, and Brinkley expects at least $1 billion in foreign investment by the end of the year.
So far, Romanian and Lebanese investors have signed revenue-sharing deals with Iraqi state-owned cement factories. Each company will invest about $150 million.
Germany’s Daimler, which produces Mercedes cars and trucks, recently announced it was establishing an office in Iraq.
China has also aggressively pursued the Iraqi market, selling machinery to the government and electronic products to consumers.
Some U.S. and Iraqi officials say American companies risk losing an early opportunity to establish long-term strategic ties with Iraq.
“My question is, ‘Where are you guys in terms of investment, in terms of economic engagement?’ ” said Naufel al-Hassan, Iraq’s commercial counselor in Washington. “Iraqis need your support. Why let someone else do that?”
There are no reliable historic numbers, but the deals this year are among the first major investment opportunities outside U.S.-funded reconstruction projects, and they signal new confidence in Iraq’s economy.
“We’re seeing a huge upsurge,” Brinkley said.
Foreign investment is good for Iraq, and the interest of non-U.S. companies is not a cause for concern, said Charles Reis, the U.S. counselor for economic transition in Iraq. “This is a normalization of Iraq’s relationship with the rest of the world,” he said.