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GREAT, OT WON - BUT IS THAT ALL
THERE IS?
Tthe nation’s business community
heaved an almost audible sigh of relief upon Orascom Telecom’s
winning of the GSM license for Iraq’s central zone in early
October. But in all the post-award euphoria, the observer is still
tempted to ask, “Is that all there is?”
A foreign trade ministry report, released shortly before OT’s
triumph, pointed out that Egypt-registered companies had, so far,
won nary a reconstruction subcontract, except for an unidentified
firm expected to supply vehicles. And another recent report, presented
to the government by foreign minister Ahmed Maher, went so far as
to state that Egypt had been excluded from getting contracts altogether
– largely, according to the minister, because Egyptian companies
had asked for longer time periods in which to ship exported commodities
to Iraq.
Not that the OT award isn’t a formidable prize. The license
covers all of central Iraq, including the capital, which is home
to roughly 40 percent of the population and most of the country’s
wealth and trade. Not unrealistically, the company is expecting
to draw one million subscribers in the first two years of operations.
And OT certainly enjoyed the stock-market fruits of being the only
big-name Egyptian company to have been awarded anything by the US-led
Coalition Provisional Authority. The mobile giant’s stock price
rallied enormously following the October 6 announcement, hitting
£E 60.65 by October 15. (On the same day last year, the same
stock was trading at a paltry £E 7.24).
Nevertheless, Egypt’s net haul of operating licenses and subcontracts
looks quite niggardly, especially in light of earlier promises of
unimagined post-war bounty that had emanated from US officialdom
in the months leading up to the conflict. “The participation
of Egyptian companies in the reconstruction... is a welcome thing,”
US ambassador to Cairo David Welch had stated in June. “Egypt,
of course, is a friend of the United States, but more importantly,
Egypt is a friend of the Iraqi people, and has valuable expertise
to offer.”
In the wake of such encouraging words, more than 60 local firms
registered to bid on subcontracts, according to the Egyptian Federation
of Building & Construction Contractors – but all seem to
have walked away empty-handed (with the current exception of OT
and the mysterious vehicle supplier).
As it became clear that reconstruction would hardly amount to the
cash cow Egypt had envisioned, the embassy gradually changed its
tune, announcing in July that previous statements regarding Egypt’s
chances for subcontracts hadn’t necessarily meant that US companies
could be forced to award subcontracts to particular regional favorites.
“The best thing we can do is send a letter of recommendation,”
said US embassy commercial officer James Joy in July.
So for now, all the earlier talk about “getting Arabs in there”
seems to have dried up, with the notable exception of the telecom
sector. In addition to OT, Asia Cell and its partners – which
includes Kuwait’s Wataniya Telecom – will serve northern
Iraq, while a Kuwaiti-Iraqi consortium – led by Atheer Telecom
Iraq – will service the southern zone.
But what about the other many building subcontracts that had been
on offer? Where did they go?
Not surprisingly, the local press has recently been claiming that
Israel – in a reflection of the Jewish state’s coziness
with Washington – had picked up several. Whether this is the
case or not is uncertain (for all its talk about transparency, the
US government hasn’t been very forthcoming about the winners
and losers of reconstruction), but, regardless, local players are
feeling slighted. According to Ibrahim Al Jaafari, president of
the US-appointed Iraqi Governing Council, who met with Maher in
Cairo recently, the council realizes that the awarding of reconstruction
subcontracts to various rivals in the region is a very sensitive
issue that “has to be avoided completely.”
If they choose to avoid the subject completely, they have only themselves
to blame when the average Egyptian observer assumes the worst, given
the paranoid nature of the local press – not to mention Washington’s
thus far ill-defined, paranoia-inducing plans for the region.
Adam Morrow
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