RIYADH, 11 April 2004 — A long-awaited US announcement yesterday that the Saudi-Iraqi border at Arar will be reopened on June 1 was overshadowed by concerns over escalating violence in Iraq.
The announcement, by Rich Galen of the Coalition Provisional Authority, came at a Saudi-American seminar to explore business opportunities in the war-torn country.
Uncertainty now hangs over an estimated $100 billion in potential reconstruction projects there.
Before violence flared up all over Iraq last week, Saudi businessmen had been demanding reopening of the Arar border, which had been sealed off during the war.
Businessmen including Dr. Fahd Al-Sultan, secretary-general of the Council of Saudi Chambers of Commerce & Industry, had argued reopening the border would automatically bring down the cost of goods and services and help cut out middlemen.
The seminar brought together a large number of Saudi businessmen at the Council of Saudi Chambers of Commerce & Industry with officials from the US Embassy.
Besides Galen, Deanne de Vries of the US Agency for International Development in Basra also represented US authorities in Iraq.
US representatives went ahead with their call for Saudi investment under a barrage of questions about the security situation and the CPA’s perceived lack of transparency in handing out the contracts.
Galen struggled to put a positive spin on investment opportunities in the war-torn country. “Saudis could help speed an end to the occupation by investing in Iraq and help them to become self-sustaining,” he said.
He asked potential investors to “look over your shoulder and look at the wave of prosperity that is coming in Iraq.”
In the face of media reports to the contrary he said the security situation in Iraq was improving. “Many international banks, including the HSBC and Citibank, are preparing to come to Iraq,” he added.
He also cited an international survey of Iraqi households which showed that the number of unemployed has come down from 40 percent to two percent. “Almost everyone is working,” he said.
Deanne de Vries made a pitch for Saudi professionals to help with training programs in Iraq despite the evident risks.
“There is a risk, absolutely, but not a high security risk,” she said. “But then without taking risks you miss out on opportunities.”
Saudi participants did show lively interest in reconstruction projects despite the security situation but said they wanted major contracts.
The Saudi construction industry was worth $20 billion annually and thus clearly capable of handling major contracts, one participant said.
There was also concern over lack of transparency and perceived favoritism to other countries, in particular Kuwait.
One participant cited the example of a Kuwaiti company winning a water-related contract although the Kuwaiti bid had been 50 percent higher than his own.
