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Cablegate: Iraqi Business Community in Jordan Meets Cpa

This record is a partial extract of the original cable. The full text of the original cable is not available.

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.

------------------------
Difficulty Communicating
------------------------

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).

------------------------------------------
An Expatriate Iraqi Investors Association?
------------------------------------------

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.

-----------------
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.

-------
Comment
-------

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.

---------
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

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