Army Assists in Reinvigorating Iraq's Economy
August 15, 2007
BAGHDAD (American Forces Press Service, Aug. 15, 2007) - Fagah Al Dhahab needs money -- about $4 million, to hear him tell it.
Mr. Dhahab is the director general of the Hillah textiles company. His cluster of factories in the capital of Iraq's Babil province represents one piece of a network of state-run industries that dotted Iraq under Saddam Hussein, providing jobs and consumer goods, but also impeding competitive growth as lynchpins of Iraq's controlled economy.
Mr. Dhahab's operations are ongoing but suffering, victims of inadequate funding, supply shortages, understaffing and a paucity of electricity. In July, the factory's output was 450,000 meters of fabric. Before that, Mr. Dhahab said, he was forced to halt production for prolonged stretches.
Now, a Defense Department task force working to reinvigorate Iraq's economic landscape sees potential in the deteriorated plant. Paul A. Brinkley, deputy undersecretary of defense for business transformation, recently visited the site to award funding for improvements.
"We gave a grant in the amount of $2 million to support the purchase of machinery, maintenance and equipment, to help facilitate getting this factory restored to full production, so that its products can begin to be shipped, and they can begin to compete in the market," Sec. Brinkley said.
His organization, the Task Force to Improve Business and Stability Operations in Iraq, is investing millions in restoring and reequipping factories throughout Iraq, with a heavy concentration in Baghdad.
A daytrip to the Hillah factory, nestled off a major street in the town, highlighted both the progress and challenges of Sec. Brinkley's team's efforts.
Hillah is about 60 miles due south of Baghdad, not far from the ancient city of Babylon. During a short helicopter ride in from the Iraqi capital, the heavily agricultural region emerges in a quick transition from the urban sprawl to the north.
Babil's patchwork of fields is broken only by a network of canals and a main highway running north to south. The province lies in the traditional breadbasket of Iraq. The U.S. Regional Embassy Office at Hillah is situated alongside the Euphrates River, the source of irrigation water for much of the region.
It's from here that U.S. rebuilding efforts for the area are directed. State Department-led provincial reconstruction teams -- joint civilian-military units tasked with strengthening local governments, addressing basic infrastructure needs, and encouraging small-business development -- work with regional leaders to drive progress through Iraq's web of relationships.
If the PRTs work at the micro-level, Sec. Brinkley's team operates in the macro world, building regional economic hubs from its revitalized factories to support the re-opening of smaller businesses nearby.
On the drive to the factory, it's clear that small business is already thriving in Hillah. Goats, donkeys and tractors compete with more traditional vehicles in streets lined by home furnishing shops, butchers, and even a plant nursery. One sidewalk is lined with tricycles for sale. Children wave from the medians, while overhead a billboard shows a 1985-era Arnold Schwarzenegger smiling down on the scene.
But the city is rich with contrast. Down the street from a new construction site, the remnants of a small amusement park sit overgrown with weeds; the rusting Ferris wheel standing sentinel over the park's locked gate. Outside and throughout the town, piles of cement and rubbish line the roads.
Still, Hillah has benefited from a relatively stable security situation. Its majority Shiia population allows residents to enjoy an uninhibited relationship with the Iraqi police force. Patrol officers are a frequent sight on the city's street corners.
A U.S. military officer with oversight of Babil province explained that Hillah is poised to benefit from its stability.
"Everything here in Iraq is local," said Army Brig. Gen. Ed Cardon, deputy commander of Task Force Marne. "Here in Babil, as you can see, it's pretty secure, and there's a lot of business down here that you saw just as you drive down."
Brig. Gen. Cardon oversees the political and economic support elements of a tripartite strategy to stabilize Task Force Marne's area of responsibility: Najaf, Karbala, Babil and Wasit provinces. His team's efforts complement ongoing security operations in the region.
Babil, and Hillah in particular, have been spared much of the fighting that has plagued other parts of Iraq. As a result, Brig. Gen. Cardon, Sec. Brinkley and the PRT leaders are able to move forward on their plans without some of the security concerns they might otherwise face.
"This is all about generating economic capacity," Brig. Gen. Cardon said.
However, security is far from the only obstacle facing these projects. During a conversation with Sec. Brinkley, Mr. Dhahab said he needs money for new equipment, repairs, and supplies. Most importantly, he said, he needs power.
The lights in the factory's conference room gave out twice during two hours of talks. Mr. Dhahab was midway through explaining how even a five-second blackout sets his production back by an hour.
According to a letter Sec. Brinkley presented to Mr. Dhahab, the $2 million the task force awarded Hillah Textiles is for purchasing new weaving, winding and dyeing machines; restoring the factory's existing jacquard machines; and purchasing raw materials.
The government of Iraq already has provided the textile factory at least $1.8 million in loans through the Ministry of Industry. Sec. Brinkley's money comes as a grant, part of DoD funds set aside for the stabilization effort.
During the meeting, Mr. Dhahab said he needs more money to purchase generators and fuel. Sec. Brinkley countered that if the director was a "good steward" of the current allotment, additional sources of funding would be opened to him. "There are no strings attached other than a process and paperwork" to ensure financial transparency, Sec. Brinkley explained.
The biggest concerns are employment and output, U.S. officials say. They made it clear there are large stakes for Hillah. "The long-term function is to make sure it's economically viable," Brig. Gen. Cardon said.
Success in the case of the textile factory would equate to a two thirds boost in its workforce, from 2,400 employees up to 4,000, the general explained.
A tour of the facilities showed plenty of spare capacity. Despite the power outage, it was clear some machines have sat idle for a long time, with threads tangled across the looms. But back in the conference room, the factory's output was on display. Richly colored striped and floral prints clashed against swathes of heavily patterned fabrics hanging in bundles from the ceiling. A children's print of bears and tigers broke up the room's round walls.
The relaxed atmosphere of the meeting was momentarily interrupted by the arrival of the Babil provincial governor, Salem Salah. With an entourage of staff, guards and reporters in tow, Gov. Salah greeted the American party, thanking them for their interest in the factory and explaining that regular employment is a critical factor for preventing violence.
Before leaving, he took the time to address members of the Iraqi press. As a member of the task force staff noted, just as in the United States, it's important for Iraqi officials to demonstrate action on behalf of their constituents.
Meanwhile, as Mr. Dhahab and his staff work to improve and grow operations at the textile factory, Sec. Brinkley, Brig. Gen. Cardon and their teams are working to line up buyers for the finished products.
"These were state-owned enterprises, so they did not have to compete on the open market," Brig. Gen. Cardon said. "Unless you can generate markets, you really don't have a factory."
The same process is taking place further north in Babil province, where Sec. Brinkley team members recently brought U.S. and foreign executives on a tour of automotive and heavy machinery factories in the town of Iskandariyah. U.S. officials presented the Iraqi leadership there with a $1.5 million grant to improve their operations.
All around Iraq, the focus is on "putting that skilled workforce back to work and creating economic opportunity and prosperity," Sec. Brinkley said.
The immediate and second-tier effects of these factories serve to improve security in the regions in which they're located by increasing prosperity and returning Iraqis to work, Brig. Gen. Cardon said.
"This is about getting these factories up and working, which gives you employment, which helps you with security," the general said.
<b>Iraqi Clothing Factories Eyeing U.S. Holiday Market</b>
Santa might be visiting Iraq this year to fill his holiday wish list, as Iraq's once-sagging textile industry gears up to export Iraqi-made clothing to the United States, a senior Iraqi government official said yesterday in Baghdad.
Deputy Industry Minister Sami al-Araji joined Sec. Brinkley and Iraqi Minister of Finance Bayan Jabr at a joint news conference to discuss plans to get Iraq's factories up and running. Many of the 200-plus state-run factories have been idle more than four years, resulting in mass unemployment that officials say creates a breeding ground for insurgents.
Sec. Brinkley reported "significant progress" in getting Iraq's industrial base back on track. Initially, that's been accomplished through small, incremental capital investments in equipment, maintenance, raw materials and training to reopen factories. The goal, he said, is to restore "sustained employment to the most skilled workforce in the Middle East," he said.
Congress authorized $50 million through the fiscal 2007 budget supplemental to accelerate this effort, he said.
One of the biggest success stories to date is the Iraqi textile industry, which hopes to export Iraqi-made clothing to the U.S. market in time for the holidays, Minister Araji reported. The Task Force to Improve Business and Stability Operations (in) Iraq, which Sec. Brinkley heads, is negotiating with several U.S. retailers to work out arrangements.
If all goes as hoped, a factory in Mosul could be exporting teenage clothing, a factory in Najaf, ready-made suits, and other factories, leather jackets.
Minister Araji said they'll likely be sold in small numbers and in limited markets, possibly Washington, New York, Chicago and Detroit. "It is a modest beginning of capturing of a market," he said.
But Sec. Brinkley said these sales will send "a powerful symbolism" that goes beyond sales figures. In addition to educating the U.S. and global market about Iraq's capabilities, he said they'll help restore the Iraqi people's faith in their own products.
Before 2003, most Iraqis had little choice but to buy from Iraqi factories, because U.N. sanctions limited Iraq's ability to import goods, Sec. Brinkley said. When those sanctions were lifted in 2003, imports began flooding the Iraqi market, filling the void left as its own factories went dormant.
Sec. Brinkley called getting those factories humming once again and Iraqis back to work keys to Iraq's future as a stable, secure and prosperous country. He expressed hope that success being seen in Iraq's textile sector soon will be duplicated in scores of other industries throughout the country.
Revitalizing Iraq's economy is a critical part of Multinational Force Iraq Commander Gen. David H. Petraeus' counterinsurgency plan in Iraq. "Economic development is at the core of his vision of how we bring political, economic and security restoration as a three-pronged effort here," Sec. Brinkley said.
This, in turn, will "create stability and enable the eventual drawdown of our presence here and the establishment of a stable government," he said.
(Tim Kilbride is assigned to Task Force Marne Public Affairs and Donna Miles is with American Forces Press Service)