Standing Fast In Iraq And Helping The Iraqis Build A New Society

Monday, March 1, 2004 - 01:00

Editor: Would you provide our readers with something of your
background and experience?

I have been with Arent Fox
for quite a long time, having joined the firm in 1976 and been made a partner in
1983. My specialization areas include U.S. government contracts, litigation,
intellectual property law and, in connection with my governmental contract work,
considerable representation of foreign clients.

Editor: Can you
tell us about Arent Fox's Middle East practice?

represent business that is both inbound and outbound in the region. It is a
diverse practice, and one that involves a worldwide clientele. That is, the firm
represents American, European and East Asian clients desiring to do business in
the Middle East, as well as Middle Eastern clients who wish to carry on their
activities there and elsewhere.

Editor: I gather that includes
clients interested - and involved? - in Iraqi

That is correct. With the
reconstruction effort now underway in Iraq, we have a large number of clients,
both existing clients and potential clients, who are interested in opportunities
in Iraq. We are attempting to respond to their requests for information
concerning this process, and we have followed the contracting activities, as
they have gotten underway, with great interest.

Editor: Can you
tell us what sectors of the economy your clients appear to be most interested

The principal interest has been in the
reconstruction effort, although we have a number of clients interested in the
petroleum industry and, in particular, the petroleum infrastructure. I would say
that much of the reconstruction work is probably going to be short-term in
nature. The petroleum industry is the backbone of Iraq's economy, however, and
the clients who have the most interest in it are looking to be a part of an
ongoing business that extends far beyond the time that the country is back on
its feet.

Editor: What are the things that have drawn your
clients to Iraq?

There is a great deal of curiosity
about Iraq as a new marketplace. It has been out of circulation, of course, for
some 25 years. The market appears to be functioning on a number of levels, with
the entry level being that of reconstruction. This involves the construction of
schools and hospitals, the repair of bridges, roads, port facilities and
airports, sanitation projects and so on. All of this is funded, in the main, by
the American government and, by its nature, is transitional. For those
interested in immediate opportunities, this is the area that has attracted the
most attention.

Editor: What is your view of the economy in Iraq

It is still quite crippled. The productive
capacity of the country, which was terribly run down by Saddam and his people
over a very long time, was further battered - indeed, just about eliminated - by
the conflict. Even now the productive capability of the oil industry continues
to be severely compromised. The Army Corps of Engineers recently awarded two
major contracts to rebuild the oil infrastructure and get it functioning, and
while that effort is underway it is a long way from completion. Only 65% of the
country's pre-war water treatment facilities are operable, and people are still
dumping raw sewage into the Tigres River because there is no raw sewage
treatment facility in Baghdad. We are still dealing with a post-war situation,
and it is going to take time and a great deal of money to get the country back
on its feet, let alone with a functioning economy capable of sustaining its

Editor: Can you tell us about Iraq as an investment

In terms of long-term business
investments, we have not had a great many inquiries from our clients as yet.
There are simply too many questions that remain unanswered at the moment, and
the principal one concerns security. Our clients are reluctant to expose their
employees to the kind of danger that Iraq poses at present, and they are
unlikely to make any significant moves unless and until they are convinced that
the country is a safe place to do business. In addition to the security concern,
of course, there is a whole series of questions revolving around the
availability of affordable insurance, the enforceability of contracts, the
availability of local personnel, and so on. It is going to take time for these
issues to be resolved, as well as for Iraqi enterprises to emerge and for
foreign companies to begin to develop business relationships with them. These
steps are necessary for the stage to be set for sustained investment in Iraq. I
believe that, in time, this will happen, and that once the country is stabilized
it will be able to function on its own.

Editor: Can you talk to
us about the connection between the security situation and the inflow of

The question almost answers itself. There
must be a high level of security before there is going to be any significant
inflow of private investment money. Security is a great deal better than it is
made out to be in the press, but having said that, I cannot but point to the
political interests that wish to destabilize the country. They are active. There
is evidence that Al-Qaida is trying to start a civil war, and turmoil of that
nature is absolutely inimical to private investment. I do believe that we are,
albeit gradually, getting a handle on the security situation, but both the
perception and the reality of Iraq are that it is a rather dangerous place in
which to do business.

Editor: One of our publication's ongoing
themes is the progress of the rule of law in the international arena. How do you
think we are doing on this front in Iraq?

I think
there is an enormous amount of progress being made so far as the rule of law is
concerned. After 25 years of rule by dictatorship, of course, anything even
remotely approaching the rule of law looks good, but there are law students,
legal scholars, lawyers and judges working to build a real system of justice.
That is enormously encouraging. Iraq was, and is, a sophisticated society, and a
functioning judicial system and professionals to serve it were part of its
makeup in the past. That means that there is something already in place so far
as a rule of law framework is concerned. This may be one of the areas in which
Iraqis themselves are taking the lead in building a new

Editor: What do you think is necessary to stabilize the

I think a commitment to stay the course on
the part of our government is necessary, and then a follow through to maintain
the support we have put into place already. A commitment to add to that support
may also be necessary. In an election year we might be tempted to back away from
our earlier commitments. That would be a mistake. We have offered the Iraqis a
partnership to help rebuild their country, and we must adhere to the bargain we
have made. This is not a commitment that is going to be fulfilled overnight, but
if we hold up our end I believe we are going to buy the Iraqis some time in
which to stabilize the country - something only they can do - and that, in turn,
will enable the private sector to begin to make an impact with investment funds.
How long might this take? That is difficult to say. In light of the length of
time it has taken over the past fifty years for other countries to move into the
mainstream of the modern world, it might be a generation before a fully mature
economic and political system is in place in Iraq. Nevertheless, at this point
every day see progress in the right direction.

Editor: Most of
what we read about Iraq is negative these days. Would you share some of the
things you and your clients think are positive about the

I think we have an opportunity to help the
Iraqis build a new system, which includes a government that is not aligned with
one particular ethnic group, political faction or religious sect, but rather
reflects the will of all Iraqis, and an economy which shares the wealth of the
country in a more equitable way. This is a very positive thing, and it is
positive precisely because it is the Iraqis who aspire to it, many of them at
great risk to themselves because of their association with us. In the passion of
the Iraqis for a decent future for themselves and their children I see great
hope. Again, I would say that it would be both morally and politically
unacceptable for us to back off or modify our commitment to help the Iraqis
rebuild their country and its institutions. We cannot rebuild it for them.
Neither can they rebuild it without our help. Working together, however, I
believe we can anticipate a bright and prosperous future for the

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