CAIRO, 17 April 2005 — While more local companies are eager to get into the Iraqi market, both Egyptian workers and Egyptian export companies that once did business with the former regime are hoping to get their pre-war money.
A report issued jointly by the Ministry of Foreign Trade and the Central Bank of Egypt (CBE) indicated that the former Iraqi regime owes an estimated $131.9 million to Egyptian firms. The figure covers the original debt plus interest, as well as an unspecified sum held in Iraqi bank accounts as security deposits. The former regime required that exporters deposit 10 percent of the contract’s value in an Iraqi bank as a security on shipment.
Contractual agreements between Egyptian companies and the Iraqi government reached $2 billion in 2002, primarily exporting foodstuffs, pharmaceuticals and industrial materials, within the framework of the 10th stage of the oil-for-food program.
Iraq was the second-largest importer of Egyptian goods, after Saudi Arabia. The government, however, said it would not ask for compensation for the Egyptian exporters or try to activate their frozen money in Iraqi banks until Iraq elects a new government.
Official at the Federation of Egyptian Industries (FEI) said they had already sent the Egyptian government a comprehensive list which includes the names of 39 companies and losses incurred by them, estimated at 900 million euros.
Alaa Ezz, official adviser of the Federation of Egyptian Industries, said that since the list was sent the government has not officially moved to ask for the Egyptian companies’ financial rights. “I’m afraid that the Egyptian companies would not be able to obtain the millions of pounds they spent in the Iraqi market,” said Ezz. “It happened before at the first Gulf war and could happen again. “Previously, Egyptian businessmen presented the UN with many documents to prove their financial rights and never received any compensation for their losses and have not received anything since then. The Cairo office for Al Ahlia for Spinning and Weaving company, that is still waiting for $650, 000 from the Iraqi government, said they had no hope of getting any compensation. “If the hundreds of companies that had many losses during the first Gulf war got something, we would have had hope for getting back some of our money,” said a Cairo spokesman for the company. “We are talking about a country that is now occupied.”
Meanwhile, official figures estimate that some 65,000 Egyptians worked in Iraq before the war are still trying to activate $4 billion that were frozen in Iraqi banks and have been transferred to Egypt. However, some experts believe that the real number was much higher, because the official figure didn’t take into consideration family members of workers and workers who switched to Iraqi citizenship.
Iraqi officials, however, insist that all legitimate business deals will be honored. Hussein Al-Uzri, president and chairman of the Trade Bank of Iraq (TBI), says that despite the corruption scandals emerging with regard to the former UN oil-for-food program, contractors who worked through official channels ought to be able to recover any outstanding payments without too much difficulty.