DUTCH TASK FORCE PREPS BUSINESS SECTOR FOR ROLE IN

UNCLAS SECTION 01 OF 02 THE HAGUE 001523

SIPDIS

EB FOR A/S WAYNE
EUR/UBI FOR M. NORMAN, EUR/NCE FOR S.CLARK, EB/IFD FOR
AMONSARRAT

E.O. 12958: N/A
TAGS: EAID ECON IZ NL
SUBJECT: DUTCH TASK FORCE PREPS BUSINESS SECTOR FOR ROLE IN
IRAQ RECONSTRUCTION


1. Summary. About 300 businesspeople attended a conference
on Iraq reconstruction that was staged on June 6 by the GONL
and the Dutch Association of Chambers of Commerce. The GONL
gave a positive but realistic assessment of business
opportunities in the Iraq and pledged the government's help
through its newly opened mission in Baghdad. The GONL and
Chamber see advantage in the large number of Dutch-resident
Iraqis and in the favorable reputation of the Dutch
government and Dutch companies abroad. Development of the
financial sector was identified as one of the most pressing
needs for the business community. While the presenters were
frank about the challenges ahead, the MFA had praise for
Ambassador Bremer's management. Turkish and Kurdish audience
members, who made up a large portion of the attendees,
questioned the speakers about the lack of access to Northern
Iraq via Turkey and expressed concern that the region was
being overlooked in the reconstruction process. End Summary.


2. On June 6, the Dutch "Task Force Iraq" hosted a
conference in Rotterdam for Dutch businesses interested in
Iraq reconstruction. The Task Force is made up of the Dutch
Association of Chambers of Commerce, the Netherlands Council
for Trade Promotion, the MFA, and the Ministry of Economic
Affairs. Speakers included MFA Director General for
Political Affairs Herman Schaper, MEA Director General for
Foreign Economic Affairs Dirk Bruinsma, officials from the
newly-reopened Dutch embassy in Baghdad, representatives of
the Chamber of Commerce, and a vice president of ING bank.
State Secretary for Economic Affairs Karien Van Gennip also
spoke, making her first public appearance in her new
position. (Note: Van Gennip will handle trade promotion for
the MEA.)


3. Schaper highlighted the GONL role in post-conflict
Iraq including: humanitarian contributions, support for
World Bank needs assessment/call for experts, EUR 3 million
from MEA to support NL businesses, possible MFA support for
human rights and justice programs.


4. The presenters gave an optimistic but realistic
assessment of business opportunities in Iraq. Andre
Westerlink of the Royal Netherlands Embassy in Washington
urged attendees to see Iraq as a broad spectrum of
possibilities -- USAID subcontracts, World Bank subcontracts,
UN agency and large NGO grants, and straight
business-to-business points of entry. The presenters also
inventoried the hurdles companies might face including but
not limited to security. Herman Schaper of the MFA said Iraq
is paying a "heavy mortgage of its past tragedies."
Dependence (on food, etc.) has had a detrimental effect on
initiative and independence. The ethnic and religious
divisions in Iraq society will provide a challenging
environment to prospective business entrepreneurs.
Neighboring countries have designs on Iraq and will work to
give certain ethnic groups the upper hand in the country's
affairs. Competition will be stiff. Schaper encouraged
Dutch businesses to build on local capacity whenever
possible. He also urged companies to think long-term and to
resist short-term profit taking. Schaper and MEA official
Bruinsma offered the assistance of the Dutch Embassy in
Baghdad, which is now staffed by four officers including
Econ/Commercial Counselor Mr. Lodi Embrechts (former ConGen
of Royal Netherlands Embassy Dubai). The Association of
Chambers of Commerce and Council of Exporters are considering
a possible trade mission to Baghdad.


5. Bruinsma also noted that Iraq's financial sector must
be developed in order that business transactions can take
place efficiently. Ms. A. Meering, Vice President of ING
Bank, gave an overview of the current financial sector needs:
privatization of state banks, transparency, a legal
structure, and a new currency. She noted the work of the
U.S. Treasury team on reinventing the Central Bank in Iraq.


6. The Dutch Charge D'Affairs in Baghdad, Mr. T.A.
Reinjes, identified what he sees as several advantages Dutch
companies will have in Iraq. First, 50,000 Iraqis live in
the Netherlands. Second, the Dutch have a "low political
profile." Third, the Dutch have a reputation for quality and
trustworthiness. On the subject of ORHA/CPA, Reinjes said
the situation has improved markedly under Ambassador Bremer
and that average Iraqis do not want Americans to leave just
yet.


7. Audience members had pointed questions for the
presenters. The majority of these questions were from
Turkish or Kurdish members of the audience, who commented on:

-- closed borders between Northern Iraq and Turkey;
-- the lack of international community focus on economic
opportunities in Kurdish areas, despite a relatively active
business sector in the region;
-- concerns that Turkish firms would be penalized for their
government's prewar political decisions.
SOBEL