By Matthew Meyer
The opinions expressed are his own.
Today’s Iraq is divided in dozens of ways: Arab and Kurd; Sunni, Shia and Christian; pro-Saddam and anti-Saddam; rich and poor. Yet so many Iraqis I have met are united around one thing: a nearly universal desire to see U.S. business grow in Iraq. They want American stores on their streets, American products in their homes and American technology in their factories. They dream that General Electric will provide their power, General Motors produce their cars and Google drive their business online. They want American business to treat Iraq as a real market, to build Iraq with Iraqis. Our policy towards Iraq should be shaped by that sentiment, as a surge of American business would provide unprecedented benefit to U.S. policy in the region and potentially compelling returns to the U.S. private sector.
American business can win the Iraqi street to a degree that neither military nor diplomatic engagements have. There have been protests throughout the Arab world; Iraq is one setting where the U.S. can substantively address the root of discontent through business engagement and job creation.
Further, business engagement limits Iranian influence in ways that a military presence cannot. An economic future that holds opportunity for all of Iraq’s communities is good for American interests. Take, for example, gypsum, a soft mineral used to produce building materials. Iraqi Sunni regions do not have the oil resources of the Kurdish north or Arab Shia south. Yet they do have an abundance of gypsum deposits, a mineral wealth that is among the highest quality in the world. Many of these deposits sit underdeveloped because Iraqis have neither the capital resources nor the equipment to revive the gypsum trade. Meanwhile, to build their homes, offices, hospitals and schools, Iraqis import gypsum from Iran, the world’s second largest gypsum producer. Clearly there is a strategic and economic opportunity here for the finest gypsum mining and production firms in the world, which are in the United States.
Policy aside, there are impressive return models that appeal to private business. For emerging market investors, the Iraqi opportunity is unprecedented. By conservative estimates, Iraqi oil production will double over the next six years, to 5.3 million barrels per day, which would make Iraq the third largest oil producer in the world. The revenues from such production will flow through the Iraqi national budget, creating extraordinary private business opportunity to re-build Iraq’s infrastructure.
American firms, thus far, have largely stayed away, even as companies from other foreign nations engage. According to Dunia Consultants, there was $42.7 billion of private investment reported in Iraq in 2010. U.S. entities invested $2 billion, which is less than that of South Korean firms and much less than half the capital that Turkish, Italian or French firms deployed. The inefficiency of doing business in Iraq and lingering security concerns likely contribute to U.S. firms’ reticence.