Iran Business Sees Money In Rebuilding Iraq

by Ramin Mostaghim

Arjemandi has been doing business in Arbil, Sulimani and Dahoc in northern Iraq for the past three years, and he knows what the north needs after the U.S. bombing.

"There are thousands of broken window panes in Iraqi towns and villages, waiting to be replaced with sheets of glass made in Iran," he told IPS. "We are businessmen, not politicians," he adds.

Arjemandi has a way of doing business in war-ravaged societies. Before looking at glass in Iraq, he has been selling pasta, detergents, cheese and machine-woven carpets in Kabul in Afghanistan.

Arjemandi is not alone in seeing destruction as an opportunity. Several new businesses are trying to build themselves on the back of broken Iraqi infrastructure.

Granite stones from Iran are being taken across the border for reconstruction projects in the Kurdish north of Iraq. The construction business is on a new high.

Bijan Darougar who has a business in wall and floor tiles, is optimistic for his business as the news comes in from Iraq. "Italian and Spanish tiles smuggled into Iran are very popular here," he says. "We have been trying to sell tiles made in Iran to African countries. Now we can forget Africa and look at Iraq."

Iranian tiles have been selling in the northern areas of Iraq for some time. "Now we are looking at the whole of Iraq," Darougar says.

A manager at the Damavand mineral water plant is particularly hopeful. Water for Iraqis is money for Damavand.

"The Iranian government has become friendly to investors and entrepreneurs," the manager says. "Iranian educated youth can now find opportunities to rebuild Iraq, just as Turkey once made money out of rebuilding Iraqi infrastructure after the Iraq-Iran war in the eighties."

But the war has also shattered some businesses around the Iran-Iraq border areas. Othman Ahmadi, who trades in home appliances from Marivan on the Iranian side is beginning to lose business to his rival in Panjvin on the Iraqi side because the border has been closed at the Bashmaq post to stop Iraqi refugees.

For years Othman and his four younger brothers have smuggled electrical goods and electronic home and office appliances made in Taiwan, China and Europe from the Iraq side, taken them by road to Bandarabbas port and shipped them on to Egypt.

"Now only some smugglers bring appliances in at great risk, and there is no more legal trading," says Othman. The brothers have been legally importing lentils and peas grown in Iraq and shipping them abroad.

Some economists have their doubts about how big a boom Iran can look at from the rebuilding of Iraq. "Those analysts forecasting an economic boom in the aftermath of the war are wishful thinkers and not realists," says Dr. Faribourz Reisdana, economist and head of the largely socialist Iranian Writers Association.

"The oil price in the international market is falling, and Iran's revenues will drop," he says. "And post-Saddam, Iran is not going to be the blue-eyed boy of the American administration. In any case, the capacity of Iran's small and medium-sized enterprises cannot be stretched far beyond existing levels."

Dr. Ghanin Ejad, considered a liberal economist, says Iran has managed to draw only about $300 million investment in the non-oil sector over the past ten years. "Given the anti-American rhetoric of Iran's religious leadership, there is not much room for confidence-building with the West," he says.

Ayatollah Ali Khamanei, the supreme leader of Iran, has delivered strong sermons against the U.S. and Britain that have worried the urban middle classes.

Dr. Nasser Fakouhi, assistant professor in the department of anthropology at Teheran University, says Iran must get its own house in order before it can hope to do business abroad. "Job-creating investment will need political change," he says.