Time for Britain and Iraq to heal the scars of war and do business

All the fuss about Sir Tony Blair’s knighthood has put Iraq back in the spotlight, albeit for the wrong reasons. Yet there is one Iraqi businessman who sees something positive emerging from the outcry if it serves as a reminder about the horrors of the war.

More pertinently, Professor Majid AlSadi hopes the furore over Blair’s title prompts Britain to do more to help Iraq rebuild its war-torn infrastructure by stepping up trading and cultural relationships between the two countries. 

“Britain’s involvement in the war was never properly capitalised upon, either by Blair or any other PM, who should have taken advantage of trading with such a big market,” he says. “The time is now right, and the government should be supporting private sector initiatives to improve commerce.”

The Professor is doing his bit to help. He runs the Coventry-based Centre for the New Midlands, a think tank looking at how best to solve the economic and social problems facing the region. 

But he has a bigger ambition: using the Midlands – his adopted home – to push for greater investment between the region, Iraq and the wider Middle East. 

Speaking over the phone to the Professor in Amman, where he is based, AlSadi suggests both countries are missing a trick. “British business is looking for more opportunities to trade in a post-Brexit world while Iraq needs expertise for the post-war reconstruction of the country which saw more than five million Iraqis flee, over 600,000 of whom are now living in the UK.” 

Iraq, he says, is desperately short of everything, from electricity supplies to food. ”Iraqis want to see more British companies, products, businesses and investments – not only military support, which has no real value to the people of Britain and Iraq.”

Ironically, Iraq is one of the biggest oil exporters in the world but households don’t have enough electricity and supplies are cut off every day. 

Despite the ravages of war, the country is forecast to be one of the fastest growing in the world over the next 10 years.

Iraq’s 42 million population is hungry for imports of everything, from food to cars to medicines but also the most basic expertise to help with rebuilding much needed power plants as well as homes.

Top of AlSadi’s agenda is organising an official trade delegation to Baghdad for the spring, when Iraq should have a new government in place. West Midlands Mayor, Andy Street, government ministers, as well as would-be investors and companies have all been invited to join the trip. 

The Basra-born Professor’s ties to the Midlands go back to when he was a young engineering student at Coventry University. He cut his commercial teeth running a market stall in the town selling designer clothes to help fund his degree.  

After studying for his PhD, he moved to Jordan, working first for a number of humanitarian organisations. His big break into business was manufacturing a new style of water pump in Jordan to cope with harsh conditions. Helped by engineers at his Coventry alma mater, he set up the Arab Pump Manufacturing Company, now part of his Eastern Holdings empire which spans aviation to hotel interests.   

Now a visiting professor at Coventry, AlSadi recently turned down an invitation to join the Iraqi government in a senior ministerial position. “The time was not right,” he explains. “For now I am more interested in improving trade relations.”

Yet doing business in Iraq is notoriously tough as the country is ranked one of the most corrupt in the world by most global indices. However, until Saddam Hussein officially took power in 1979 and the troubles broke out in the early 1980s, Britain and Iraq had decent trade relations. 

Since then, commerce has fallen off a cliff: UK exports to Iraq were £481 million last year while imports from Iraq were just £98 million in the same period: 0.1% of UK trade. 

Most UK trade is dominated by oil giants such as BP and Shell although their interests are declining as they move away from fossil fuels. But Christophe Michels, managing director of the Iraq Britain Business Council (IBBC), says trade is improving slowly, mainly in the professional and financial services, private education and aviation sectors. Both PricewaterhouseCoopers and Ernst & Young have offices there.

He adds that renewable energy, and the gathering and utilisation of flared gas which is currently being wasted, provide new opportunities in the energy sector and associated industrial sectors such as petrochemicals and fertilisers.

But getting through the country’s red tape is difficult. Which is why the IBBC’s advice to UK companies wanting to export is to get the first contract as a supplier to an international company already working in the country, or to work with a trusted local private sector partner. Smaller UK companies should stay away from the state sector because of the red tape and bureaucracy – and baksheesh – often involved in doing business. 

Foreign countries are less sensitive to such obstacles. By far the biggest players in the country since the end of the war and the retreat of ISIS are the US, France, Italy, Russia, South Korea and Turkey, and of course China, which is flexing its tentacles away from Africa and deep into the Middle East. 

President Emmanuel Macron has visited the country twice over the last two years, most recently last August when the French oil and gas giant, Total, signed a new deal to invest billions of dollars in Basra’s gas fields. Macron is also backing French companies to build the Baghdad Metro project.

China recently signed a 25-year strategic partnership agreement with neighbouring Iran as part of its trillion dollar Belt and Road Initiative. For the first time, China now has military access to land and sea ports across the Arabian Peninsula: China’s share of the Gulf’s oil exports is now an astonishing 70 per cent of the revenues of these countries. 

China dominates the construction sector – winning contracts by helping finance them – and is Iraq’s biggest customer for oil. Despite the global push towards sustainable energy sources, oil still makes up nearly half of all the world’s energy supplies and will continue to do so for decades to come.

Which is why Iraq, OPEC’s second biggest oil producer, will remain of huge geo-strategic interest to the West – and to British interests – and a pivotal bulwark against Chinese domination of the region. 

So there are big security issues for the British to consider in strengthening ties with Iraq as well as economic, if not humanitarian, ones. Dr AlSadi adds: “Although the French, German, Russian and Chinese are taking 80 per cent of the major projects in Iraq, now is the time to reverse this. Let’s get business going between Birmingham and Baghdad. Isn’t this what Global Britain is all about? We can do this for the benefit of both countries.”