Swiss firms weigh up risk and opportunity in Iraq

Contracts for work restoring Iraq's electricity are among the most lucrative on offer Keystone

Swiss companies have been weighing up the risks of bidding for potentially lucrative contracts in post-war Iraq.

This content was published on April 5, 2004 - 08:30

Representatives from some 50 firms met in Zurich last week to explore business opportunities in a country still wracked by political instability.

The meeting was held amid ongoing fears about the safety of civilians who take up employment in Iraq.

Four United States contractors were killed last week before their bodies were mutilated and dragged through the streets of the city of Fallujah.

The incident - which came days before the US-sponsored Destination Baghdad Expo trade fair was due to open - highlighted the unstable political and security situation in the country.

The murders also served as a warning to foreign companies that setting up in Iraq is a dangerous business.

Security fears

Martin Aeschbacher, who heads up the Swiss Liaison Office in the Iraqi capital, Baghdad, told swissinfo that the security issue was still a serious obstacle.

“We cannot recommend that representatives of Swiss firms come to Iraq because we consider there are still quite a lot of dangers,” he said.

“But having said that, the situation is in some parts of the country much better than it was last May after the war when I arrived in Baghdad.

“Back then it was a kind of anarchy, whereas now there are a lot of police and it seems that normal crime has gone down,” he added.

Aeschbacher points out that politically motivated crime is on the rise and that foreigners engaged in the reconstruction of the country are increasingly becoming targets.

Promoting trade

Last week’s event in Zurich was organised by Osec Business Network Switzerland, which has been promoting trade between Swiss companies and foreign markets for the past 75 years.

Though it is unclear exactly how many Swiss companies are currently doing business with Iraq, official figures show that Swiss exports totalled SFr38.4 million ($30.24 million) in 2003. There were no imports from Iraq.

Three Swiss companies that have permanent representation in the country are the engineering concern, ABB, the world’s largest agrochemicals company, Syngenta, and technology firm Bühler, which is active in food and chemical processing.

Aeschbacher does not have any precise figures about how many other Swiss firms are already in Iraq – but believes the numbers are growing.

“I think there are quite a lot of Swiss firms which do business with Iraq in one way or another,” he said.

“Some companies export, while others might have an agent in Iraq or maybe do business with the country through Kuwait or [the Jordanian capital] Amman,” he added.

Price of neutrality

Neutral Switzerland is not part of the US-led coalition in Iraq and Swiss companies cannot therefore be awarded primary contracts for projects which involve money allocated by the US Congress.

But in a recent interview with swissinfo, the US ambassador to Bern, Pamela Willeford, made it clear that Swiss firms were still welcome in Iraq.

“Obviously there are many other awards and contracts that Switzerland can be involved in,” said Willeford.

“Besides the government contracts we are trying to help companies – private companies from all over the world – find ways to participate in the economic development of Iraq.”

Aeschbacher believes there are several possibilities for Swiss firms looking to participate in the rebuilding of Iraq.

“One [way] is to go to an American, British or other firm with a prime contract and try to get a sub-contract. The Iraqi ministries also have tenders and some Swiss firms are competing for them,” he explained.

Swiss virtues

Switzerland's man in Baghdad added that Swiss businesses have trump cards to play when it comes to the process of bidding for contracts.

“Iraq is surely ready for Swiss companies. Switzerland in general, Swiss products and Swiss firms have a very good reputation in Iraq. It’s a pleasure to be there from that point of view.”

But questions remain over whether Swiss firms are prepared to go to Iraq despite the difficulties and risks associated with doing business in the country.

“I don’t think many companies will come in the near future, but I’m still optimistic,” Aeschbacher said.

“In the medium term, I’m sure that a lot of Swiss companies will come. The potential is there and it’s up to each one to decide [what to do].”

swissinfo, Robert Brookes in Zurich

Key facts

Swiss exports to Iraq reached a peak in 1982 of SFr680.4 million.
The main Swiss exports in 1984 were electrical equipment, optical instruments, metal goods, pharmaceutical products, pesticides and chemicals.
In 1994, the main exported items were pharmaceutical products.
The Swiss State Secretariat for Economic Affairs believes the opportunities in Iraq come from the good reputation of Swiss products and the availability of short-term export credits.

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In brief

At a meeting in Zurich organised by Osec Business Network Switzerland, Swiss companies heard that although there are high risks in doing business with Iraq, there should be no shortage of potential subcontracts.

The head of the Swiss Liaison Office in Baghdad, Martin Aeschbacher, said the security issue was still a serious problem.

But he was optimistic that Swiss firms would go to Iraq to do business in the medium term.

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