Industry being revitalised in Iraq: US official

Industry is being revitalised in Iraq, despite the raging violence, and creating lucrative openings for entrepreneurs brave enough to do business here, a top US official insists.

Paul Brinkley, the Pentagon's deputy under secretary for business, has been touring Iraq for the past week with some 45 US business executives.

He told AFP in Baghdad that many dormant state-owned factories would start firing up again "within months."

Already a plant producing vehicles has reopened in Iskandiriyah, about 40 kilometres (25 miles) south of Baghdad, providing valuable job opportunities for locals. "Others will soon follow," he promised.

Brinkley told journalists, who donned helmets and bullet-proof vests to make the trip out of Baghdad to the US military's Camp Victory on Saturday, that economic growth could help quell the city's chronic sectarian violence.

"There is a recognition that security and economic prosperity go hand in hand, and that unemployment in Iraq is contributing to the frustrations of people and creating sympathy for insurgents," Brinkley said.

Since a US-led coalition invaded Iraq in 2003 to topple the regime of Saddam Hussein, most factories have been lying idle or operating at very low rates of production, he said.

Many of these possess modern equipment, while others have machinery at least as good as many enterprises operating efficiently in India and China.

"They can quickly be revitalised," Brinkley said. "The factories served as the engine for the Iraqi economy and must be restarted."

The US government, he added, is working with the ministries of finance and industry as well as with Deputy Prime Minister Barham Saleh "to get this economic engine running again so that thousands ... can regain employment."

Enterprises that could be restarted fairly easily, he said, included upstream and downstream oil activities, textiles, heavy machinery, chemicals, minerals and electronics, among others.

At the same time, he added, his department is involved in efforts to connect international entrepreneurs with Iraqi business leaders so private concerns and factories can also be jolted back to life.

He and his group had travelled around Baghdad and the provinces or districts of Anbar, Iskandiriyah, Arbil and Diyala, meeting business leaders, farmers and others from across the social and economic spectrum.

Those travelling with Brinkley said they had been surprised at the potential that exists in the embattled country but also at just how far Iraq's dormant industrial capacity has decayed or fallen into disuse.

"The industry ministry controls 200 factory sites, but these factories are running on average at only 10 percent of capacity," said Fred Cook, a US government specialist in labour affairs.

"The ministry has 196,000 workers on its payroll but only a small fraction of these are actively employed in factories. Most are under-employed and paid only a small fraction of what they were previously paid," he explained.

"Our goal is to restart industry and to put people back to work."

Mahdi Sajjad, of British-based Gulfsands Petroleum, said the potential for upstream and downstream activities linked to Iraq's lucrative oil industry -- the country's dominant foreign exchange earner -- is enormous.

His company has already made an offer to deal with Iraq's flared gas -- the burn-off which most other oil producers in the developed world have long been converting to dry and liquid gas.

"We have proposed that we do the processing for free. We will deliver the dry gas to the Iraqi government and then sell the liquefied gas on the open market," Sajjad said. "We are just waiting for the go-ahead."

Julian Burns, vice president of BAE Systems North America, which makes trucks as well as defence and aerospace systems, said he had found in the Iraqis a "resourceful and proud people who are ready to do business."

He was not concerned, he said, about talk of Iraq sliding relentlessly towards civil war.

"I'm a retired army general and I'm here to do business in Iraq," he told AFP. "That in itself is a message."

US official Brinkley, too, shrugged off talk of civil war.

"It's been good to have come here and to have spoken to the people. All say they just want to live in peace.

"In any case, many multinationals do business in other dangerous places in the world. There is no reason they should not do so in Iraq as well."