Transitional government seeks WTO observer status

Representatives from the Iraqi trade ministry hope to receive observer status at the World Trade Organisation (WTO) after visiting Geneva this week. Such status, and future accession to the world economic group will open up Iraq to the world, according to Fakhr al-Din Rashan, the deputy trade minister. The country has been largely cut off from regular trade by 12 years of international sanctions. Instead, it has received food and other humanitarian assistance through the United Nations-administered Oil-For-Food Programme. Hundreds of renegotiated Oil-For-Food contracts were handed over on 21 November to the US-led Coalition Provisional Authority, which will henceforth administer the programme in place of the UN. "We are acquainting the world community with developments in Iraq," Rashan told IRIN in the capital, Baghdad. "This will consolidate our move to a free market economy." Most importantly, Rashan and Trade Minister Ali Abd al-Amir Alawi want to show foreign investors that the country is open for business. Meanwhile, many potential investors have adopted a wait-and-see approach, deterred by the escalating violence targeting foreigners in Iraq over recent weeks. "This will be a very clear-cut indicator of our new economic policies to develop the Iraqi economy," Rashan said. "We want to start discussing this, because we think there will be a great deal of support," he added. Iraq wanted to court investors on the Middle East, Alawi said recently. Companies in the region were being told that if they were willing to put up with a little instability at the moment, they would easily be able to obtain substantial shares in Iraq's economy as it moved to a free-market system, he pointed out. The trade minister is currently having talks with trade officials and companies in Iran as part of a tour of the region to persuade foreign investors to come to Iraq. Rashan recently met the president of Turkey and an economic group affiliated with Islamic countries with the same objective. The security situation was, of course, a problem, Rashan said, noting, however, that new investment would contribute towards a return to stability. Following the end of hostilities in May, the economy has stagnated, with virtually all companies country-wide looted down to the building bricks. While industries do not appear to be working, business owners have imported thousands of television sets, refrigerators and cars, which are being snapped up by a population long denied the chance of owning even the most basic consumer goods. Public sector employees have been paid lump sums by the US-led Coalition forces, but often do not go to work for more than a few hours. Some US $2.1 billion in Oil-For-Food escrow accounts formerly administered by the UN is expected to keep the economy going in some sort of fashion over the next several months. Meanwhile, residents will continue to receive monthly basic food rations until late 2004.