U.S. Signs Pact to Help Revamp Iraqi Economy

Times Staff Writer

The U.S. Commerce secretary and his Iraqi counterpart signed a business cooperation deal Monday that commits Washington to helping the war-torn country reform its state-dominated economy, attract foreign investment and jump-start its moribund private sector.

Commerce Secretary Carlos M. Gutierrez, on a brief visit to Baghdad, and Iraqi Trade Minister Abed Falah Sudani signed a deal that commits Washington to undefined economic cooperation with Iraq, including technology sharing.

The U.S. also plans to establish a program to help Iraq develop laws to create "a business-friendly legal and tax environment that will be conducive to investment," said Gutierrez, a former Kellogg Co. chief executive named to his post last year.

The signing was followed by a trade exhibition and luncheon sponsored by U.S.-based technology giant Motorola Inc. and Iraq's three main cellular phone companies, which are operated by Kuwaiti telecommunications firms MTC and Wataniya as well as Orascom, an Egyptian consortium.

In prepared remarks, Gutierrez pointed to Iraq's quick adoption of cellphones, which were banned before former President Saddam Hussein was toppled by U.S. forces in 2003, as an example of the country's economic progress. About 7 million Iraqis now own cellphones, a 25% penetration rate that is about average in the Arab world.

"Iraq is not a poor country. It was made poor by tyranny," Gutierrez said. He was speaking to assembled U.S. Embassy staff, Iraqi trade officials and local and foreign businesspeople gathered in a banquet hall of the Rashid Hotel, inside Baghdad's fortified Green Zone.

Responding to a reporter's question, Gutierrez pledged that Washington would help Iraq fight the corruption that has sapped the oil-rich country of revenue and frightened off potential investors.

Sudani, the Iraqi trade minister, acknowledged that a legal framework to safeguard and regulate foreign investments "is not completely implemented." But he promised that there would be a law put in place soon by the new national assembly, which plans to adjourn for the month of August.

In a brief interview, the Commerce secretary said he was optimistic about Iraq's private sector despite the daily violence and rampant corruption that has caused Iraqi and foreign investors to place their money elsewhere.

"There is a government now here in Iraq," Gutierrez said. "This is not a transition government. At some point when the security improves, and it will improve, the growth of the country will rely on private capital. We need to get that started now, and we're very excited."

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