Call for new strategy in Iraq
By Kamil Tchorek
Scott Blacklin, Vice President of Jefferson Waterman International (JWI), has warned Polish business representatives that the political promises made by the Bush administration concerning the reconstruction of Iraq "...cannot be implemented." Blacklin made the statement in a presentation to the Iraq Reconstruction Business Forum hosted by Top Consulting and Weil, Gotshal and Manges in Warsaw last week.
JWI is among a number of consultancy groups advising firms bidding for Iraq reconstruction tenders. The company's staff work on the ground in Iraq, as well as in Washington DC. Blacklin's caution came together with an upbeat call for a re-assessment of strategies that may be required if Polish business is to assume a significant role in the reconstruction process.
The forum was attended by key reconstruction candidates such as Bartimpex and PKN Orlen, the latter represented by its president, Zbigniew Wróbel. Blacklin sat for interview with the Business Journal afterwards.
Blacklin's case in point consists of numerous Spanish firms and diplomats that he has spoken to who were allegedly promised a "15 percent cut" of the reconstruction tenders, only to be left waiting - to this day - once the initial conflict was over. Like Poland, Spain has fully supported the Bush administration's foreign policy this year, and Blacklin is concerned that there may be similar expectations of reward in this country.
Though the Iraqi Coalition Provisional Authority (CPA) has the task of awarding reconstruction tenders, and the United States Agency for International Development (USAID) has awarded eleven contracts and five grants since January 2003, there is no mechanism in place for the award of specific proportions to specific coalition partners.
The tender process remains frantic, with "... a three day lead time in many cases," in the words of James MacKenzie of Fouad AlGhanim, also speaking at the conference. According to Blacklin, "...there is a dark perception of this in the United States, where many people feel that the tenders are pre-cooked."
The less-emotional explanation that Blacklin gives is that there are vast sums of money available, huge reconstruction efforts by businesses are required, but too few officials are involved in tender drafting and assessment. "There is more money available than people who know how to administer it properly," he argues, and in this climate "...any way of cutting down the workload will be gratefully received."
And so Blacklin's practical, positive route out of the problem is found: Polish businesses, by whatever means necessary, must lobby the CPA and USAID, prepare their own tender proposals and proactively seek to find and create "...the rewards that the Bush administration officials either implicitly or explicitly promised earlier this year."
In particular, Blacklin calls for the experience of Polish industry in Iraq before 1990 to be pitched to tender, funding and grant providers, well before they identify and quantify the operations. Examples cited are the 200-kilometre stretch of motorway between Baghdad and An-Nasiriyah, an irrigation works at Falluja and a housing complex in Mosul.
The positive message from this Washington insider to Polish business is that the real benefit of investing in Iraq will not be the commercial opportunities in Iraq itself, but the "...bonds that can be built there" with American companies that are commercial world powers.
Blacklin argues that Polish companies' experience of transition from a command to a market economy is an asset that can be offered to larger American partners in developing markets around the globe. Speculating about the future, Blacklin conjectures that one arena that Polish firms can go into, after successful co-operation in reconstruction, might be West African offshore fuel exploration and production, and the associated refining and transporting industries stemming from it. "The Iraq experience can put Polish business on the world scene," says Blacklin.
Another 'side door' to American business associated with Iraqi reconstruction are individual states in the U.S. According to Blacklin, states such as Maryland and Illinois with traditional ties to Poland will "...bend over backwards" for participation in contracts associated with the reconstruction effort, and may offer greater opportunities than the often-closed doors of Washington. "Poland, or Polish business to be precise, is not giving itself the high international profile it deserves," Blacklin points out.
Another major opportunity for Polish businesses are the so-called 'Definitional Mission Studies' (DMS) by the U.S. Trade and Development Agency (TDA) that are required by the authorities in Iraq to assess the sectoral needs of the economy, how they can be met, and who can deliver them. "Any Polish company with project management experience would be suitable for undertaking a DMS," says Blacklin, "...the study by a Polish firm could be funded by the authorities, and result in the recommendation of a Polish firm for a tender which would see them fulfill a service to Iraq." Clearly, an early presence on the ground in Iraq is vital to this, especially because as JWI has identified, Iraqi ministries are increasingly requesting bids for their own projects.
At the Iraq Business Forum, speakers with experience of the region and the reconstruction process unanimously concurred that personal contact - access - will be the key to success in Iraq. Blacklin points to the examples of Kuwait and Jordan, as Middle Eastern 'friends of America' who are simultaneously gaining and contributing to the reconstruction effort. "When you get outside of your native culture you are working on trust," says Blacklin. "If you can arrange business partnerships here in Poland with Kuwaitis or Jordanians, you are likely to get a head-start in Iraq."
This week marks the start of the former finance minister Marek Belka's role as the new Financial Co-ordinator for the CPA. The general opinion at the conference in Warsaw was that this is a major new opportunity for Poles to network the tender process.
The access work has already started," says Blacklin, "Poland has earned itself outstanding access in the persons of Belka and Poland's ambassador to the U.S. Though these people are remarkable, dynamic individuals, they can only offer an excellent platform for those Poles who recognize them as routes to the normally inaccessible administrators in Baghdad and Washington."
Blacklin agrees that Iraq is an unforeseen environment that has as many pleasant surprises as unpleasant ones. As the United Nations has started to withdraw personnel from Baghdad and latest figures show a dramatic recovery in the American economy, so the rules of the game for Polish business in Iraq have changed and Polish business strategy, in Blacklin's words, must change with it.
