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Swiss traders take long road to Baghdad

Matthias Dölitzsch's pumps will be welcomed by residents in Baghdad, where sewage trickles along the pavement Keystone Archive

Switzerland is doing more business than ever with Iraq under the United Nations "oil for food" programme - but the process is anything but easy.

This content was published on January 25, 2002 - 07:33

It can involve an immense journey - including a desert crossing -- and a sweltering wait outside the offices of Saddam Hussein's ministers. Sometimes, the Iraqis demand bribes, businessmen say. Then, there is a long period as a contract wends its way through the UN bureaucracy for final approval.

Official figures from Swiss authorities give the impression that economic relations between Switzerland and Iraq are booming: Last year, Swiss exports to Iraq tripled, reaching SFr563 million ($337.33 million).

But behind the scenes, for the Swiss businessman, those figures can represent a great deal of individual effort, as the export manager of Biral, a company that makes pumps in Münsingen near Bern, can attest.

Telling the tale

Matthias Dölitzsch found that winning a contract to supply Saddam's hospitals with sewage pumps is an adventure far removed from the norms of the Western world.

He succeeded in winning a contract worth SFr1.5 million to supply pumps for the Iraqi health ministry. And a second contract is in the works.

"Let's say you have a meeting at the health ministry at 0930. They make you stay in the waiting room despite no air conditioning and 50 degrees Celsius in the shade," he told swissinfo.

"Some time in the morning or in the afternoon, they will take the time to come and see you for two minutes and let you know that you have to fill out another form because they require further information...and this goes on for a week or two," he added.

Once the contract is signed, it has to be approved by the UN. For that, the whole procedure has to go via the Swiss State Secretariat for Economic Affairs in Bern (Seco), which submits it to New York.

"Of course at the UN they want to make sure that any equipment could not be used in making chemical weapons," Dölitzsch said.

A stop in Jordan

Reaching Baghdad is a story in itself.

Because of the UN sanctions, a Swiss must travel to the Jordanian capital, Amman, then hire a taxi for some SFr300 for the 1,000 kilometres (much of it desert land) to Baghdad.

"Crossing the border is quite an adventure because it usually takes several hours. You need to pay "baksheesh" or bribes several times to speed up the process to get past the customs," Dölitzsch told swissinfo.

If one has a mobile phone, it is confiscated. A laptop is inspected for several hours before being returned.

"You have to sign several papers and then they will let you enter the country," he added.

Once across the border, there is a big petrol station that is another eye-opener. "It's amazing. You pay for 100 litres of petrol about $1, the same price as for a bottle of water in Iraq," Dölitzsch said.

And then there is the hotel accommodation in the Hotel Rasheed, made famous by CNN reporters at the time of the Gulf War. Once a five-star establishment, it has now fallen into disrepair.

"It's very interesting because outside there is a mosaic of George Bush senior and there's no way you can enter the hotel without walking on his face," he said.

"I consider it a two or three star hotel now because you sleep in it like in a youth hostel or lodge," Dölitzsch told swissinfo. Because of the embargo, nothing has been replaced -- including beds, sheets and towels.

It took Dölitzsch two futile two-week trips, then another week before the contract was signed. The door, however, is now open for new deals.

Building trust

"Despite the difficult conditions...if you give them little gifts like Swiss chocolate or pocket knives or take them out to dinner and you try to build up trust with the people in charge, they get to know you personally, they accept you and the ice is broken," he said.

"And then you can sell them anything," he added.

To prove the point, Dölitzsch is travelling to Baghdad in February to sign a contract worth about double the amount of the first accord.

"You can see that when they get to know you and when they're satisfied with the quality in what you supply, they will give you bigger orders," he added.

Dölitzsch encourages other Swiss companies to follow his example in doing business with Iraq.

Lucrative business

Despite the UN sanctions imposed on Baghdad after the Gulf War - which are also supported by Switzerland, a non-UN member - business such as Biral's, goes on.

Under the UN programme "oil for food", Iraq has traded with many countries over the last five years to the tune of $18.3 billion for imports of humanitarian goods and equipment.

Although the Swiss-Iraq trade figures have tripled, Switzerland trades at a modest level.

The official figures show that Swiss firms as agents carried out some SFr288 million of trade with Iraq last year. Products actually supplied from Switzerland include medicaments (SFr28 million) and food (SFr40 million).

Products under the "humanitarian" category imported from Switzerland include everything from equipment for schools and hospitals to machines that help with the supply of electricity.

In general, the rules governing imports to Iraq are fairly easy to understand. The UN says they cannot be used to build the country's military strength and that, of course, includes production of chemical weapons.

Under the "oil for food" programme, a UN sanctions committee must approve imports. That is an attempt to ensure that Iraq does not try to produce weapons that can be used against others.

Huge contracts

"I would really like other Swiss companies to go to Iraq and do what I have done, because there are huge contracts there, particularly in the Ministry of Health and the medical sector," he said.

We have good Swiss companies that are manufacturing products in that field. I'm sure that they could be as successful as companies in Austria or Germany which are very involved there...why not the Swiss?"

If Switzerland were a member of the UN, Dölitzsch believes life could be a lot easier.

"For our second contract, I received a fax from the UN stating they need more time for a technical review, even though it's basically the same pumps as in the first contract which they already approved," he said.

"This shows they just want to gain time and give us a harder time than UN members," he added.


by Robert Brookes

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