DUBAI, Oct. 21 (Xinhua) -- Nearly a decade after the fall of former dictator Saddam Hussein, Iraq attracts United Arab Emirates ' companies from almost all sectors, who aim to secure their market share in the booming re-construction of the country.
Gulf Arab companies expanding to Iraq are usually from the oil and gas sector. The Baghdad government's National Development Plan worth 186 billion U.S. dollars mainly focuses on reviving exploration carbon-energies, as the country with 143 billion barrels of oil reserves is regionally placed second behind Saudi Arabia.
But also retailers, construction firms and UAE airliners trade big bets on Baghdad's comeback.
Earlier Sunday, Dubai-based luxury and perfume retailer Paris Gallery said it will expand to Iraq. The group, which generated 1 billion dollars turnover last year and announced in September that it plans to go public, noted it will open five franchise stores in the northern Gulf state by 2015.
After a U.S.-led coalition ousted Saddam in 2003 with military force, the U.S. President Barack Obama decided to pull out most of the troops and finish the occupation in Nov. 2011 to leave the country's future to Iraq's own hands.
In April, the International Monetary Fund (IMF) said the Iraqi economy would grow by 11.1 percent in 2012 and that annual growth would accelerate to 13.5 percent in 2013.
With 31 million people, Iraq has the largest population among all Arab Gulf states. Consequently, increased, albeit volatile stability, attracts retail firms that want to grab their market share of a growing middle class.
GROWING INTEREST, VOLATILE SECURITY
"We see immense interest from UAE businesses in Iraq, as the country is regarded as the next economic hype in the region," said Ziad El Akabi, director of Almco Group in Baghdad.
Almco organizes so-called safe trips to Iraq for businessmen who prefer to move around the war-shattered country with domestic bodyguards. Sniper attacks and roadside bombs are still a common appearance in Iraq.
"Security is still an issue, but top executives trust us as our family has been long established in the Iraqi construction industry. We are not foreigners, but insiders who can guard visitors from outside safely through our home country," El Akabi added.
Reconstructing the infrastructure, which was severely damaged during the war, "is key for a sustainable rebound of Iraq as a regional economic player," said Masood Ahmed, IMF's director for the Middle East and Central Asia.
RE-CONSTRUCTION BONANZA
Construction projects planned or underway in Iraq stand today at 283 billion dollars, according to the U.S. bank Citigroup.
Real estate and maintenance firm Drake and Scull International (DSI) from Dubai won various projects in the field of waste water- management, power supply and real estate maintenance in Iraq.
On Sept. 30, DSI was selected by the Iraqi Ministry of Municipalities as the turnkey contractor for a waste water treatment plant located in the city of Kerbala. The project has a value of 23.5 million dollars.
Ten days ago, DSI was awarded in collaboration with Italian Sicim spa a 358.3 million dollars contract for pipeline installation at the Zubair Oil Field in southeastern Iraq. DSI's share of the overall contract value is 50 percent.
As a UN embargo crippled Saddam's oil and gas industry, UAE entities in that sector are pushing hard for more investments.
Dana Gas from Sharjah, the eastern neighbor emirate of Dubai, said one week ago in a joint statement with Crescent Petroleum that in their capacity as joint operator of the Khor Mor field, total production in their gas operations in Iraq's Kurdistan region has reached 80,000 barrels of oil equivalent per day at the 4th anniversary of production.
As more business triggers more businessmen to travel, the two largest UAE carriers Emirates Airline from Dubai and Abu Dhabi's Etihad Airways have established direct flight connections between their airports and Iraqi cities in recent years.
When flights launched between Abu Dhabi and Kurdistan's city Erbil, Etihad Airways CEO James Hogan said "Iraq is a key market for Etihad and will be an important focus for the airline."
Hogan was right. In February, Iraq's southern port city Basra became this year Etihad's 84th destination.
UAE low-cost carriers FlyDubai and Air Arabia from Sharjah also increased frequency in their flights to Iraq.
NO ONE-WAY STREET TO GROWTH
Since the UAE became an independent state in 1971, relations between Abu Dhabi and Baghdad have been on a roller coaster journey.
Nevertheless, Iraq is not immune against the downturns of economic cycles.
"The year to end September spending in Iraq construction is down 14 percent over the same period last year. We believe this reflects the 30 percent in the first half-year fall in the oil price. Iraqi spending very much depends on oil production and associated revenues," Citigroup analyst Heidy Rehman said in a study on Middle Eastern construction published on Sunday.
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