Leaders Have Vision Of Burgeoning Baghdad

Team Infidel

Forum Spin Doctor
USA Today
September 10, 2008
Pg. 5
Major proposals have major hurdles to clear
By Charles Levinson, USA Today
BAGHDAD — From his window in Baghdad's City Hall, Mayor Saber Nabat al-Essawy gazes out on a 41/2-acre parking lot — at least for now.
In two months, he says, a United Arab Emirates-based developer will break ground on a 30-story, $270 million tower. It will house shopping malls, office space and apartments, the first step toward realizing al-Essawy's ambitious vision for Baghdad's future.
Eventually, he hopes to look across the capital and see billions of dollars worth of malls, luxury hotels, outdoor amphitheaters, public swimming pools, apartment towers, gardens, stadiums and more. He hopes it will be funded largely by foreign investors whose interest in Iraq has suddenly perked now that security has improved and sectarian tensions have eased.
Baghdad's leaders are starting to draw up bold plans for the future, envisioning a city they wouldn't have dared to contemplate one year ago, when sectarian militias roamed freely and car bombs were a daily scourge.
"A lot of people are coming here with very ambitious plans," says Todd Schwartz, an economic counselor at the U.S. Embassy in Baghdad. "People are trying to dream big about Iraq."
Al-Essawy has elaborate computer mockups of a Baghdad that bears little resemblance to this war-battered city's sewage-soaked streets, where electricity shortages occur every day.
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington, said the growing interest Iraq is generating among foreign investors is "a very good reflection of what is really happening in the country."
"That really shows that people have a serious interest in doing business in Iraq," Hufbauer said.
There are plenty of skeptics, who haven't forgotten that past promises to deliver even the most basic public services have yet to materialize. Only three of al-Essawy's projects have received the necessary permits and licenses to go ahead, and on those little has been done.
On an empty, trash-strewn lot in the city's moneyed Mansour District there is no sign of the gleaming glass tower promised on paper. A lone trailer and a sign proclaiming "the future site of the Mansour Shopping Center" are the only indications a brighter future may be stirring.
"I want a realistic plan that can be executed on the ground, not impossible projects meant only for newspapers and dreams," says Basim Anton, the vice chairman of the Iraqi Businessman's Union.
Billions of dollars in deals are in limbo because Prime Minister Nouri al-Maliki has yet to pass several regulations that would resolve disputes among government agencies over who has final authority to approve investments.
Al-Essawy admits that the confusing regulatory environment "is causing big problems." However, he says he has plenty of foreign investors eager to get in on the ground floor of an economy that, after years of war, may have nowhere to go but up.
Charles Ries, the U.S. Embassy's outgoing economics attaché, says there has been "a remarkable transformation in Iraq's economic environment." Ries points to International Monetary Fund predictions that Iraq's economy will grow by 7% this year, after a flat 2007.
Inflation, which hit 60% in 2006, is down to 12-15%. Lending by private banks rose 50% from October 2007 to February 2008 as small businesses looked to expand.
The Bloomberg news agency reported last month that Iraq's bonds are delivering the biggest returns in emerging markets worldwide, with risk premiums that suggest Baghdad may be safer for bond investors than Cleveland.
The Baghdad city government's most ambitious project, a $5 billion development including a 4,000-bed hospital, apartment complexes, shopping malls, hotels and sports fields on the 80-acre Rashid military base, drew 16 bids from foreign companies, according to al-Essawy.
A $1 billion project to refurbish Baghdad's water treatment facilities drew 23 foreign bids, while a $61 million sewer system project had nine foreign companies bid, al-Essawy says.
"There is competition now to get into Iraq," al-Essawy says. "We have natural resources, cheap raw materials and cheap labor. Any project in Baghdad will be profitable."
Attila Gencer, a sales representative for the German cement machinery manufacturer the Hess Group, recently visited Iraq as part of a delegation of German businessmen who came to explore investment opportunities.
On the final day of his visit, Gencer said he would make a positive report to his bosses back in Germany.
"I've been pleasantly surprised," Gencer said. "The airport was clean and functional. I saw advertisements in the airport for mobile phones, which is an indication that people are demanding things.
"Just like in Germany, everybody has been on time for meetings, they've been well-organized and prepared," Gencer said. "I've had no bumps so far."
Contributing: Ali A. Nabhan
 
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