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Mideast firms seek Iraq contracts

By CNN's Caroline Faraj

Companies in Dubai and other Arab cities hope to benefit from the rebuilding of Iraq.
Companies in Dubai and other Arab cities hope to benefit from the rebuilding of Iraq.

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DUBAI, United Arab Emirates (CNN) -- Middle Eastern companies are joining the rush to Iraq in the hope of securing multi-million-dollar deals to help rebuild the country.

Unlike France, Russia and Germany -- who voiced opposition to the US-led war and are now trying to mend fences to gain access to lucrative contracts -- most Arab countries backed military action against Saddam Hussein's regime, at least privately. (Full story)

As a result, Arab companies are expected to be considered for some of the reconstruction work, which analysts estimate will cost anywhere between $84 billion and $500 billion.

"While the mood may in general be indignant at the U.S., the Arab public in the so-called moderate countries expect the same U.S. to allow some trickling down to take place to those countries from the big loot in Iraq," Jawad Anani, chief executive of Dubai-based Baseera Consultancy, told CNN.

Saleh Hussein, general director of Bahrain National Commercial Bank, told the London-based newspaper Al Sharq Al Awsat that the International Monetary Fund and the World Bank will provide much of the cash needed for rebuilding.

However, about $30 billion to $40 billion is likely to come from other financial institutions -- either by direct funding or the arranging of loans.

"Several questions still need to be answered. The situation needs international resolutions as the situation in Iraq is blurry under the absence of financial and monetary authorities in Iraq," Ghazi Abdul Jawad, executive manager of the Bahrain-based Arab Financial Institution, told Al Sharq Al Awsat.

He added: "Banks in the region will play a significant role as soon as the war cloud disappears."

Earlier this month, a group of companies from Saudi Arabia, Egypt, Jordan, the United Arab Emirates and the United States joined efforts to win some of the bids for rebuilding Iraq.

The consortium -- which consists of 12 companies -- is looking to win contracts for hospital construction, the maintenance and operation of ports and airports, and the development of electricity and water facilities.

In the United Arab Emirates, building contractors and companies providing computer and tourism related services are hoping to cash in on the expected Iraqi boom. In January, the UAE set up a private investment company, PORTFOLIO, with a $50 million pool of capital.

Jordan is also looking for some form of reward for its support of the United States in the region.

"They want more access to cheap oil sources from the Gulf or Iraq, and they expect a pipeline project to be extended to Aqaba (in the southwest corner of the country), as well as easy access to the Iraqi market," Baseera Consultancy's Anani said.

"They also view the potential movement on the Palestinian- Israeli track to afford them a bigger entry into the Palestinian as well as the Israeli markets."

The revival of tourism could also provide Jordan with more opportunities to boost its ailing economy should a peace movement in the region gain momentum and credibility.

Still, despite signs of optimism for Arab companies in postwar Iraq, not everyone expects this to translate into more business opportunities.

"All reports indicate Asia and the US mainly have the contracts already, so there is no room for major Arab gains," Sameer Ghawi, business editor at English daily The Jordan Times, told CNN.

"As a result of situation in region, and mainly the security concerns, there is probably the biggest capital outflow in decades, and low investments which leads to a feeling of instability for everyone concerned."

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