Iraqi entrepreneurs optimistic about business prospects
Iraq, Economics, 12/23/2004

In what is billed as the first scientific poll of Iraq's business community, an international polling organization reports broad optimism about the economic prospects for Iraq among small and medium-size business owners and managers.

A survey of 454 owners and managers was commissioned by the Center for International Private Enterprise (CIPE), a branch of the U.S. Chamber of Commerce, and conducted by Zogby International from October 17 to December 3. The owners and managers surveyed ran businesses that employed 100 people or fewer. In Baghdad, 264 interviews were conducted; 90 in the northern, predominantly Kurdish city of Irbil; and 100 in the mostly Shi'a city of Hilla, south of Baghdad.

The survey's findings report "seven in ten (69 percent) of Iraqi business leaders hold an optimistic outlook toward their country's future post-Saddam, while just one in ten (10 percent) is pessimistic. These percentages hold up across the nation, though optimism jumps to eight in ten (81 percent) in Hilla."

Hala Kotb, director of International Marketing and Communications of Zogby International, said the level of confidence is remarkable, considering that the poll was conducted during the battle for Fallujah, where coalition and Interim Iraqi Government forces engaged insurgents in heavy combat.

"It's just so incredible with all that's happened. This survey was done from October 17 to December 3, through Fallujah, through all the bombings, and to see this level of optimism is actually very good," she said.

By more than a two to one margin, Iraqi businesspeople anticipate employment will increase nationally in the next six months, according to the survey: 32 percent said they have hired new employees since the removal of the Ba'athist regime; 24 percent said they are planning on hiring in the next six months.

John Zogby, president of Zogby International, said, "this is extremely encouraging. This is a call to not only the United States but a call to the world that says, 'hey, look, Iraq traditionally has had a very successful business climate. Historically, it has had the most developed middle class and business class of anywhere in the Arab world, and here is one area where the United States and the rest of the world can play an extremely positive role in facilitating development."

While four out of 10 small businesses employ women, the survey found that women do not have the same opportunities as men to start or run businesses or find professional jobs. It found few women occupying managerial positions.

"Another area that we're working on, which obviously is going to be a major thrust for several years, is improving the role of women in business. There are severe barriers to women entering into firms. The security situation of course makes it more difficult for women in particular but the access to credit, access to business opportunities and access to jobs that lead you into a business career were among the constraints that were listed," CIPE President John Sullivan said.

No political party has won strong support in the business community, the survey said. It said that more than seven out of 10 businesspeople surveyed indicated they had not decided for which party they would vote in the January 30, 2005, parliamentary elections. The al Dawa party drew the most support, 10 percent, with its popularity spread evenly over the country. The Supreme Council for Islamic Revolution in Iraq was the party of choice for 7 percent of the respondents, but its support was unevenly distributed over the country. The Kurdish parties, the Patriotic Union of Kurdistan and the Kurdish Democratic Party, dominated in northern Iraq but have little support in other areas of the country.

"The political parties have not had the chance or haven't taken the chance yet to reach and cultivate a constituency in the private entrepreneurial sector. If I were an Iraqi political leader, and I saw those numbers, I would say that there is a big constituency that has not lined up behind somebody yet," Sullivan said.

More than two-thirds of the respondents have a positive view of the interim government, saying that its new laws will help their businesses. But most of the businesspeople said that information on commercial laws is not clear or widely available and that the government contracting process is not transparent.

"Obviously, the creation of a parliament, whenever that happens, will be a major step forward for the business community to have a partner to dialogue with. The program that we're doing in Iraq is designed to try to meet some of these needs, to strengthen the network of associations to act as a voice for the business community," Sullivan said.

The respondents said that their greatest business needs, after security, were for English language training and computers. They said that they saw their greatest opportunities for foreign business with the United Arab Emirates (30 percent), European companies (17 percent), and Lebanon (11 percent), followed by the United States, Jordan and Egypt. Among the respondents, 86 percent said that foreign investment in Iraq would improve business, while 3 percent said it would have the opposite effect.

"What we're seeing is the rebirth of an Iraqi business community that is seeing opportunity. They're seeing the numbers change, and their expectations are that the interim government and the government that will be elected soon will put into place the kind of commercial law and regulatory environment and banking system" that will help business, Sullivan said.

Previous Stories:
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