More Iraqi privatization plans

From Reuters via Iraq-Today: The US civil administration in Iraq intends early next year to unveil a blueprint for privatizing Iraq’s state-owned businesses in a quest to create a thriving capitalist economy, an official said on Wednesday. Thomas Foley, director of private-sector development for the US-led Coalition Provisional Authority in Iraq, was bullish about getting Iraq’s economy back on its feet, but said it was important that corruption be stamped out in Iraqi business. In a conference call with reporters at the Pentagon, Foley said he hoped to present to the US-appointed Iraqi Governing Council within about five to seven months a proposal on privatizing state-owned businesses. He said he would propose the creation of an Iraqi privatization agency to handle the process of making state-owned companies private. Foley said his plan would involve about 150 of the 200 state-owned enterprises in Iraq and exclude the oil industry, electricity assets and financial institutions such as state-owned banks and insurance companies. Businesses in Foley’s portfolio include cement companies, fertilizer operations, a phosphate mining operation, sulphur mining and extraction businesses, pharmaceutical companies, an airline and automobile tire makers. “Although it is a large task in Iraq, in overall terms it’s not nearly as big a task as it was in most of the eastern bloc countries, both in terms of the number of companies and the percent of the work force that’s affected,” said Foley, a private equity investor. He said the percentage of the Iraqi work force employed in the companies he was seeking to privatize was about 3 to 4 percent. Foley said he was “fully confident” Iraq could become “a thriving capitalist economy.” He said he believed estimates that placed Iraqi unemployment at 50 to 60 percent were too high. Corruption in Iraqi businesses would have to be addressed, he said. “It wouldn’t surprise me if there’s a fair amount of it around because under the regime (of ousted President Saddam Hussein) bribes and kickbacks were a very successful strategy, so that type of activity was rewarded, and the people who didn’t participate in it basically didn’t succeed,” he said. Foley said the key to turning that around was having a good set of commercial laws and a judicial system that enforced the laws.