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Flak and false starts in a war zone

Special to The Times

Southern California small-business consultant Phil Borden went to Iraq with high hopes for playing a small part in rebuilding the tattered economy.

The yearlong venture shredded that dream.

Charged with taking over a failed effort by a State Department contractor to create a national model of a profitable small-business development center, Borden expected to use his considerable stateside experience helping entrepreneurs. But the deaths of co-workers, locals and American soldiers -- and the continuing absurdities of trying to do business in a war zone -- took their toll.

“I learned that meaning well and doing well are two different things,” said Borden, a Palos Verdes resident, whose role was confirmed for The Times by colleagues in Iraq and at the State Department.

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The former historian found some relief in the weekly reports he e-mailed to family and friends documenting the ironies, tragedies and frustrations of his daily life in Baghdad’s Red Zone, the area outside the high-security Green Zone.

Those messages were forwarded freely, eventually finding an audience of several hundred, and are now compiled in his new self-published book, “Shaku Maku: On the Ground in Occupied Iraq” (Outskirts Press, Denver).

Shaku maku is Iraqi slang for “How’s it going?” The answer, for Borden, turned out to be “not so well.”

As he recounts in his book: “I began my year in Baghdad’s Red Zone wrapped in a flak jacket, Kevlar under-shorts and hope that I could create a small beachhead for economic sanity in an ocean of madness. . . . Over time, I increasingly came to understand that I had deluded myself.”

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He’s been back for a year. He’s taken up his former work as chief executive of the nonprofit Active Capital and as principal of Essergy, a Long Beach consulting firm. At the insistence of his wife, Leslye, he also spent some time putting together his 292-page book.

What was a nice small-business development guy like you doing in a place like Iraq?

A few years ago I had been on a peace mission in Israel and Palestine and thought that an important thing that could be done to facilitate the peace process there was to see if I could create joint ventures of Palestine and Israel women-owned businesses. . . . Ultimately the person I was working with said, “Look, I hear you bitch and moan about all the bad things we’ve done to Iraq. It’s time to put your money where your mouth is.” That was a powerful argument with me, because complaining was easy. I talked further with my wife and she agreed: You make an existential decision and you follow through. If you care about something, the caring is in the action, not the statement.

What was your first assignment?

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In support of getting small businesses started, it was to survey small businesses, find out what they need and based on that we were supposed to create a business center, sort of like an SBDC [small business development center] to help these businesses in Baghdad, to write the plan, to initiate the center and to create a super organization for all the various small business centers to come and chambers and other associations dedicated to promoting business.

This was at the height of violence, so, of course, it was an absolutely absurd idea.

How crazy did it get?

I can give you a real keen example. One of our jobs was to create this center and a board of directors and train that board. The center had nine directors, most selected before I got there. But one of the nine was kidnapped and murdered. Six of the eight now live in Amman [the capital of Jordan]. Two of the six have declared they will never under any circumstances go back to Iraq. Two had their businesses blown up. . . . The situation was not really conducive.

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Your book talks about the difficulty of setting up a simple business meeting.

We had a joint venture with another company. We were supposed to share space. The head of that company and 10 of his employees were kidnapped, although they were returned. It was just thuggery.

They were, $550,000 later, all alive. Clearly, we weren’t going to put something in that neighborhood. It was just too dangerous. People who were seen with us, seen with Americans at that time, had targets on their backs. We had to have clandestine meetings with our board of directors. When we went out to speak with a businessperson, it had to be done with very high secrecy and security because of dangers, not to me, but to them. So it was a very bad situation. I will say it’s a little better now.

Eventually you had a direct contract with the State Department. Why was it a difficult relationship?

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They got the big stuff but never got the small stuff, and building businesses is about the small stuff.

You write that most of your ideas were rejected, often after you’d been told to go forward.

First I said we should create a virtual center. Something most people don’t know is that Iraqis are very well connected. People have satellite dishes everywhere and do a lot of business out of their homes. The State Department said it was too hard to check up on progress. They rejected that. One plan after another changed and died.

Did you accomplish anything you wanted to?

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Finally we said we are going to create manuals for everybody, first in English and in Arabic, that explain how to form a business center and how to make it sustainable -- training a board of directors, funding. And that was pretty substantial at about 450 pages and tons of examples. So then we did a manual for how to start a business in Iraq.

What shape did you find local small businesses in?

Let’s make a distinction. Mom-and-pops tended to be businesses handed down, very local. A lot had to shut down, but a lot maintained some form of precarious existence.

If you moved up the ladder a bit to larger, faster-growing small businesses, $2 million to $50 million, they were injured very badly, partly by the occupation but even before the occupation, the embargo hurt them.

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How so?

I used to meet with people that called themselves industrialists. One of the companies was a drug manufacturer. Well, you couldn’t get any chemicals into the country because everything was suspect. So he took the labor he had and went into making stainless steel containers. That was a massive reduction in his business but he managed to stay alive. Other businesses were not so fortunate.

Iraq was a furniture-making center for a lot of the Middle East. After the first embargo they lost all of that business to China because they could not export or import. That’s business they’ll never get back. That was a good hunk of both manufacturing and retail.

Any lessons learned about small-business viability in Iraq that you use now?

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I don’t think much translates to what I do now. I learned what is very obvious, which is there are certain kinds of businesses that prosper under wartime circumstances but they are not the ones you want.

It will take restored order for small businesses to build, and that order, whether we leave tomorrow or in 10 years or 100 years, the Iraqis will have to do themselves. And they will do so in an ugly, bloody way, and when that situation resolves, there will be a chance to rebuild business and social life.

Honestly, I was skeptical when I went and cynical when I left. I was hopeful when I went and hopeless when I left.

That’s not such a happy lesson.

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cyndia.zwahlen@latimes.com

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Begin text of infobox

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Mr. Borden goes to Baghdad

The education-by-fire of a Southern California small-business consultant

Who: Phil Borden

What: Chief executive, Active Capital, a San Bernardino nonprofit that matches entrepreneurs with sources of private equity; principal, Essergy Consulting in Long Beach

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Background: Borden, an adjunct professor at University of the West and a former UCLA professor, was executive director of Women’s Enterprise Development Corp. in Long Beach and Asian American Economic Development Enterprises in Monterey Park. Borden also has founded several high-tech ventures.

What’s new? Borden just self-published “Shaku Maku: On the Ground in Occupied Iraq” (Outskirts Press), about his efforts to encourage small-business development in a country torn by war. When he returned to the U.S. in April 2007, Borden left behind a 400-page how-to manual and the dream that he could make a difference.

-- Cyndia Zwahlen


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