DAMMAM: Eastern Province businesses await normalization of relations between Saudi Arabia and Iraq and expect it will be a boon for commerce, construction, the energy industry and investment between the two countries. Iraqi Ambassador Ghanim Al-Jumayli recently met Asharqia Chamber officials in Dammam to discuss trade and commerce.
Eastern Province Deputy Gov. Prince Jalawi ibn Abdul Aziz ibn Musaed welcomed Al-Jumayli to what proved to be a comprehensive look at both the opportunities and impediments for business. Although the two countries enjoy good relations at present with the border open to traffic, commercial relationships remain cumbersome.
“One of the major points we made with the Iraqi ambassador to Saudi Arabia was to impress upon him the need to iron out all our differences,” said Adnan Al-Nueim, secretary-general of Asharqia Chamber. “If political ties get better, then business ties will improve.”
Trade relations are improving. Al-Nueim noted Saudi exports to Iraq rose to SR1.469 billion in 2007, up from SR498 million in 2006 and SR253 million in 2005. Most trade at present, however, goes through Jordan and Kuwait, which complicates shipping and adds a layer of middlemen that increases prices and reduces profits. The ambassador said the situation was making Saudi goods less competitive in Iraq.
“What this means is simple — we are being forced to share our profits,” said a Saudi business leader with interests in Iraq. “Naturally, when we have to use a third country, then it is a bad proposition. However, in the absence of any option, we have nowhere else to go but through these third countries.”
Al-Jumayli said that his government was working with Saudi authorities to accelerate the reopening of the Arar border crossing to give a boost to trade exchanges between the two countries. He also said that talks were ongoing about opening another point at Al-Jumaima in the Eastern Province.
Arar is a Saudi town on the border with Iraq. This border town has seen a huge increase in traffic during the Haj and Umrah seasons as Iraqis cross into the Kingdom. The nearest town to Arar on the Iraqi side of the border is Al-Nukhaib.
Significant opportunities could also open up both in construction and the oilfield services industry. Saudi engineering and construction contracting firms bring much experience and many resources with them, which could be important for Iraq which is trying to redevelop its infrastructure after years of conflict. Saudi oilfield service providers can also provide significant expertise for Iraqi oil fields, many of which have been awaiting upgrades for more than a decade. Saudi contractors are experienced with the latest technologies employed in the Kingdom’s best-in-class fields.
In addition to questions about trade regulations, many Saudi businessmen also say visa issues at present are perplexing.
“There are no clear-cut guidelines on visas for the two countries,” Al-Nueim said. “Some Saudi businesspeople have traveled to Iraq at the invitation of Iraqi businessmen, and there were no problems with visas. But if Saudis themselves want to visit Iraq for business purposes, we have no idea whether we need visas to enter Iraq. That is one of the issues we discussed with the Iraqi ambassador, and he promised to look into the issue. Clarity on the visa issue is vital.”
The consensus of both Saudi business representatives and the Iraqi ambassador’s delegation was that improved relations between the two nations would benefit all concerned. “As Iraq’s immediate neighbor we should be given an opportunity to invest there, and there should be an opportunity for Iraqi businesses to enter our market,” Al-Nueim said. “This will be a win-win situation for both countries.”
