Japanese businessman: "Don't expect too much from Iraq"

Some companies say they "misunderstood the situation" in Iraq.

For neighboring countries such as Turkey, Iraq is a central market.
For other countries-not so much

Last week, the International Auto Show opened in Erbil. Ninety companies showcased their products, and most of the companies were from Turkey.

Some companies have decided to open offices here, and a number are willing to open factories in Iraq, but several well-known huge companies stated that it wasn't what they expected.

"Iraq is our biggest market because of all these developments. We're trying to enlarge our presence here," said Goktug Eyiip, import and export manager of KARBA, a Turkish company that produces equipment for garbage, firefighting, sewage, and water-tank trucks.

Eyiip is elated to do business in Kurdistan Region and Iraq, and he notes that Iraq saved KARBA during the international economic crisis. "Let me give you an example: Last year [2009], our company budget was 17 million Euros--the source of more than half of the money was from the Iraqi market," he said.

KARBA exports its equipments to all Middle East countries as well as Thailand and North Africa. Now, the company uses Kurdistan Region as the gate for all of Iraq.

"We have a plan to send a number of Kurdish mechanical engineers to Turkey for training, and then we will open a factory--a branch of our company--in Erbil city," he told "The Kurdish Globe."

Eyiip wants Iraqis to trust Turkish companies and products, and he insists the quality of Turkish products is similar to European products and the price is much cheaper.

European, American, and Japanese companies are not as pleased as Turkey regarding the Iraqi market. "Before coming here, we thought Iraq was a huge market, but actually it is not. We misunderstood the situation," said Tsuyoshi Morimoto, general manager of Japan's TAICHI HOLDINGS LIMITED in the Iraqi Kurdistan office.

Morimoto, who exhibited Japanese cars at the Auto Show, pointed out that many big companies from Europe, the U.S. and Asia mistakenly expected too much from Iraq. "To be honest, the Iraqi market is not that great--it is just like any other country in the Middle East," he said.

Morimoto says the problem is that Iraq doesn't have a lot of sources of income besides oil, which is not sufficient to develop the country.

He said that when the economic crisis hit the international market, many big companies turned to Iraq in hopes that it would save them. "Big companies talked a lot about Iraq and paid a huge amount of attention to it. It is just like we suddenly built a Babylon, and now the Babylon is collapsing."

Despite what Morimoto said, some companies want to build factories here, as business ordinarily means risk.

Skoda, a Czech car producer, said it is planning to open a factory Erbil city to fulfill the Iraqi market's demand of vehicles.

Skoda was planning to open the factory after the fall of the former Iraqi regime in 2003; however, the plan failed "due to the low rate of taxes put on the importation of cars, which accounts for only 5 percent of the car's price; moreover, the government encouragement and facilities for the setup of such a factory is missing," said Adil Agid Sadiq, company manager.

Iraq is a big car market, Sadiq said. "We will set up the factory in Erbil if the Iraqi government fulfilled these points." The problem of an organized taxation system and lack of government support and facility hamper the establishment of many other various factories in the country, according to Sadiq.

By Qassim Khidhir