JANUARY 9-11 IRAQ/UAE BUSINESS EXCHANGE CONFERENCE

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 000205

SIPDIS

SIPDIS

E.O. 12958: DECL: 1/19/2017
TAGS: EINV AE IZ
SUBJECT: JANUARY 9-11 IRAQ/UAE BUSINESS EXCHANGE CONFERENCE

(U) Classified by PRT Anbar Team Leader James Soriano,
reasons 1.4 (b) and (d).


1. (U) This is a PRT Anbar reporting cable.


2. (C) SUMMARY. Al-Anbar Governor Ma'amoun al-Alwani and a
delegation of Anbari businesspeople attended the Iraq/UAE
Business Exchange Conference in Dubai on January 9-11 seeking
to attract foreign investment to the province. Stressing
that local government and tribal sheikhs can provide security
for foreign investors, Governor Ma'amoun declared that his
province would defeat the insurgency in Anbar province by
"activating" the private sector. While the governor told
delegates that the security situation would be helped by
foreign investment and job creation, representatives of
Emirati-based businesses stated they are wary of investing
until there is an improvement in security. END SUMMARY.

ANBARIS LOOK TO PRIVATE SECTOR TO AID PROVINCE
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3. (C) Attending the first formal business exchange
conference between Iraq and the United Arab Emirates (UAE) in
Dubai on January 9-11, Anbar Governor Ma'amoun al-Alwani
stressed that the province's challenges can most effectively
be addressed through private investment and job creation.
The governor attended the conference with a delegation of
about 160 Iraqi businesspeople, mostly from al-Anbar, Babil,
and Salah ad Din provinces. They met with over 400
representatives of UAE-based companies, many of whom stated
they attended the conference out of curiosity about post-war
reconstruction-related business opportunities in Iraq.


4. (C) Addressing a packed audience of Iraqi and
Emirati-based businesspeople on January 10, Ma'amoun declared
that "we will resolve the crisis of al-Anbar province through
the activation of the private sector." Citing Anbar's
"suffering," the governor appealed directly to Emirati
businesses to invest in the province. He described Anbar as
having the natural resources needed for development, saying
"There were many projects during the old regime in al-Anbar,
but these did not lead to prosperity because they did not
rely on private sector investment." Ma'amoun said that he
would work to create a business environment in Anbar
consistent with new Iraqi investment laws, which encourages
provinces to pursue foreign investment at their own
initiative.


5. (C) Anbari businesspeople attending the conference
stressed the importance of foreign investment to defeating
the insurgency in their province and providing jobs for
Anbari young people. "Look, we are not living a normal life
with the terrorism in Anbar," one Fallujah businessman
stated. "We are ready to be distributors, to be local
agents, to help the businesses from Dubai make money."
Another Fallujah businessman echoed this sentiment, observing
that local Anbari distributors for UAE-based businesses
"would provide a lot of jobs" in Anbar.

ANBAR ECONOMY SUFFERING FROM INSURGENCY, SECURITY PROBLEMS
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6. (C) Indeed, the economy of al-Anbar province has been hit
hard by the insurgency and terrorist attacks. Al-Qaeda in
Iraq (AQI) has disrupted the normal patters of economic life,
and is actively involved in perpetrating economic crimes,
such as hijacking, highway extortion, black marketing, and
control of gasoline stations. The east-west highway along
the Euphrates River, which served as a vital trade link
between Iraq and the rest of the world, is not secure in
areas west of Ramadi to the Syrian border. There is no phone
service whatsoever, with insurgents destroying telephone and
communications towers. Unemployment in the province stands
at between 40-60%. Moreover, there has been a flight of the
Anbar middle class, professionals, senior clerics and sheikhs
to areas of Iraq in which they feel more secure or to
neighboring countries. With insurgent violence and terrorist
attacks continuing to disrupt the economy, the Anbar
provincial government has become more focused on securing GOI
resources for post-battle reconstruction and foreign
investment.

GOVERNOR SEEKS TO REASSURE POTENTIAL INVESTORS ON SECURITY...
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7. (C) Cognizant that potential investors are wary of the
security situation in al-Anbar, Ma'amoun sought to reassure
investors on security. He asserted that the foreign
investors could set up projects with local governments and
local sheikhs providing security. The governor criticized
the international media for painting a bleak picture of the

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situation in al-Anbar. "The media has tarnished our image as
a hotspot," he said, "but there are only two factories-
producing glass and ceramics- that are not working at the
current time. All our other factories are working.

...BUT INVESTORS REMAIN WARY OF SECURITY IN ANBAR
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8. (C) Despite attempts by the Anbari governor and
businesspeople to reassure investors about security,
Emirati-based businesses expressed skepticism about investing
in Anbar without further evidence that the security situation
in the province is improving. "They keep saying that
bringing in investment will improve the security situation,
but it doesn't work that way. First you have to guarantee
security, and it is hard for me to believe that Fallujah and
Ramadi are safe given what we see on the television every
day," one Lebanese businessman stated.


9. (C) A representative of al-Ahli Bank in Dubai, citing the
concerns of foreign companies about security in Anbar, raised
the issue of security in the province with the governor
during a question-and-answer session. "All banks are
interested in opening up franchises in Fallujah and other
places in the provinces," he said, "but what about the
security of the road between Fallujah and the central bank?"
Another Dubai-based banker said, "we need to have security
first. When they tell us Fallujah is safe we wonder who is
telling the truth. These people or the people on the
television talking about bombs and killings."

COMMENT
--------------


10. (C) Anbari business leaders made a good first effort in
Dubai in what will likely be a long process of wooing
investors, indicating that they are looking ahead to
post-battle reconstruction. The conference was effective in
helping Anbari businesspeople make initial connections with
Emirati companies. Subsequent conferences should direct
their efforts at ensuring that these connections are
maintained, and databases of conference participants to
facilitate networking.


11. (C) Governor Ma'amoun and Anbari businesspeople
acknowledge they are facing a "Catch-22" in attempting to
lure foreign investment to Anbar province: specifically,
Anbaris are convinced that foreign investment is critical in
defeating the insurgency in the province, while potential
foreign investors want to see evidence that the insurgency is
effectively under control before investing in the province.
International perceptions of Anbar will likely only change
when security becomes an accomplished fact.
KHALILZAD