Fundamentally Reoriented

BAGHDAD/BERLIN/WASHINGTON (Own report) - The United States is insisting on stronger German participation in stabilizing the puppet regime in Iraq. As the US ambassador in Baghdad declared, he hopes "very much that Europeans will become more engaged in Iraq." Now the question is to impose "a fundamentally different orientation" on this Gulf state, known for its long standing "animosity toward the West." Above all, German companies should be participating. As a matter of fact, German business activities in Iraq are once again on the rise, since the German government concluded a business agreement with Baghdad last summer, symbolically sending the Minister of the Economy, Michael Glos, into that war-ravaged country. Among the enterprises seeking to do business in Baghdad are numerous companies, that, in the 1970s and 80s, had already close relations with Iraq and are now seeking to refresh their old contacts. Back then, Germany was at times Baghdad's most important business partner - a position that the German businesses would like to re-achieve, even at the expense of their US rival.

Since 1958

As the US ambassador to Baghdad explained, in a long exclusive interview for the German press, Washington would very much like to see an expansion of German activity in Iraq. Recently Washington and the puppet regime in Iraqi reached important accords on US troop withdrawal, but more significantly on a "strategic framework," which according to the ambassador, "defines the broad foundation of the future US-Iraqi relations." Given the geo-strategic contents this accord could "be described as historical." Iraqi policy has "not only under Saddam Hussein, but already since 1958 (...) been characterized as opposing or even openly hostile to the West."[1] "Now there is the opportunity for a fundamental reorientation to develop in Iraq" predicts the US diplomat and points to Baghdad's current efforts "to build ties to Europe and the West."

Time to Act

German businesses have an important role to play in the framework of Iraq's new geo-strategic orientation. In fact the pro-Western reorientation will be organized by an Iraqi regime that is highly dependent on foreign support and on remaining in power. It is "important that the West extends its hand to Iraq" says the ambassador. Which is why, "visits from European and German ministers, parliamentarians and business representatives" is of immense importance. The US diplomat "can offhand think of quite a few German companies" to which the largely destroyed Iraq would "offer attractive prospects."[2] "Now is the time to act. I hope the Europeans will take advantage."

First Initiatives

Since last summer, the first German initiatives in this direction are already discernable. May 30, Berlin and Baghdad signed a bilateral investment protection and promotion accord. A joint protocol of the two ministers of the economy concerning the next steps to be taken toward cooperation followed on June 30. Simultaneously the German Iraqi Economic Commission held its first meeting since 1987.[3] Finally in July, German Economic Minister, Glos personally visited Baghdad - the first West German minister since Hans D. Genscher, Foreign Minister at the time, visited in 1987. Glos arrived in the Iraqi capital in the company of several German entrepreneurs. German Foreign Minister Steinmeier has announced he will be visiting Baghdad in 2009, presumably also accompanied by a business delegation. Berlin's efforts have in effect led to German companies' first initiatives in that country.

Old Contacts

Numerous German firms are refreshing their decades-old contacts to Baghdad. Already in July, for example, the German firm MAN signed a memorandum of understanding for doing business in Iraq - together with the Hamburg commerce and service enterprise Terramar. Terramar has for the past 30 years - without interruption - been active in Iraq. The managing director Peter F. Mayr has been the longtime head of an "Iraq Discussion Group" in the North Africa Middle East Initiative of German Business (NMI). Beginning next year MAN and Terramar hope to open a truck and bus assembly line in Iraq. Their plan is to establish the final assembly for dump and tanker trucks, tractor trailers and bus bodies from Salzgitter in Northern Germany. MAN is not only benefiting from its "very good reputation" in Iraq, but also from the fact that it "can use the long years of Terramar's contacts " declared the marketing presidium of the MAN commercial vehicles department.[4]

Oil and Gas

German energy companies are among those companies pursuing special interests in Iraq. Iraq has the world's third largest oil reserves and considerable reserves of natural gas. It has already reached an accord with the EU for the supply of natural gas. The BASF subsidiary Wintershall is seeking contracts for the development of Iraq's oil and gas reserves. The RWE Corp. in Essen, is negotiating also with Baghdad. RWE is part of a consortium that is planning to build the "Nabucco Pipeline" from eastern Turkey to Austria. They plan to pipe natural gas from the Caspian Basin and the Middle East to Europe and thereby reduce the EU's dependence on Russian natural resources. The significance of a future supply of Middle Eastern natural gas through the "Nabucco" [5] has grown since Moscow enhanced its influence over the southern Caucasus through the secession of Abkhazia and South Ossetia.

Deutsche Bahn

According to reports, the German railway, the Deutsche Bahn, is also seeking an opportunity to get involved in Iraq.[6] It is already engaged in Saudi Arabia and the United Arab Emirates and recently took over the planning for an elaborate project in Qatar. The membership of two of the leading Bahn managers in the Foreign Business Association's German Near and Middle East Association (NUMOV) testifies to the Deutsche Bahn's Middle East interests. The chief executive of the Deutsche Bahn International is the chairman of NUMOV and Hartmut Mehdorn, the Chief Executive of the Deutsche Bahn, is also on the NUMOV board. It could be to the advantage of the company that the enterprise in charge of the restoration of the railway line from Basra in southern Iraq to Baghdad is a German company, from the Dorsch Group (in Offenbach near Frankfurt/Main ), which since 1958 has been active in Iraq, and had planned the expressways, as well as the capital's subway and airport.[7]

Later Independent

While Washington is expecting German enterprises to contribute to strengthening Iraq's western ties, the German businesses are pursuing its own objectives. As the NMI coordinator, Eckart von Unger explained, German enterprises want to "pick up from the good old days, when business with Iraq was at four billion Euros."[8] Back then, at the beginning of the 80s, West Germany had succeeded in becoming this Gulf state's most important business partner, enjoying exceptional political influence - not least of all through arms deliveries.[9] Berlin has the ambition of again attaining a comparable standing - for the moment as a partner of the United States, later possibly autonomous and independent of the USA.

[1], [2] "Jetzt ist die Zeit für Unternehmen aus Europa, sich im Irak zu engagieren"; Frankfurter Allgemeine Zeitung 11.12.2008
[3] see also Contribution to Occupation
[4] MAN: LKW für den Irak; Verkehrsrundschau 23.07.2008
[5] see also Spät, aber nachhaltig, Transitgebiet, Nabucco and Oberstes Prinzip
[6] Deutsche Firmen knüpfen erste Kontakte; Handelsblatt 23.10.2008
[7] Deutsche Wirtschaft sucht Anschluss im Irak; Die Welt 23.07.2008
[8] Deutsche Industrie setzt auf den Irak; 23.07.2008
[9] see also Deutschland: Bedeutendster Waffenlieferant des Irak