Egyptian companies see major role in Iraq’s reconstruction

Egyptian firms have a solid track record in the regional construction sector.
Sunday 11/02/2018
An Iraqi man works on a damaged house in Mosul’s Old City, on January 8.     (AFP)
Work ahead. An Iraqi man works on a damaged house in Mosul’s Old City, on January 8. (AFP)

CAIRO - Following the declaration of victory over the Islamic State (ISIS), Egypt is eyeing a major role in the reconstruction of Iraqi cities ravaged by years of conflict.

Egyptian construction firms, including state-owned companies, are preparing to begin reconstruction work in Mosul, Tikrit, Falluja and other cities overrun by ISIS in 2014.

“Our work will mainly focus on infrastructure in these cities, which has been tragically affected by the war with ISIS,” said Ibrahim Mahlab, Egypt’s former prime minister and current presidential assistant for national and strategic projects. “Some of the cities were totally destroyed during the war.”

Mahlab visited Iraq in late January to discuss Egyptian participation in the reconstruction of the country. He talked with Iraqi officials, including Prime Minister Haider al-Abadi. Mahlab also toured ravaged cities to see the destruction first-hand.

Water and electricity plants in those cities, he said, were destroyed and sewage systems and communication infrastructure damaged with homes being turned into rubble.

Egyptian companies, including Arab Contractors, one of Africa’s largest contracting groups, will be part of the Iraq reconstruction process. Mahlab headed the firm before he became housing minister in 2013 and then prime minister in 2014. The companies are expected to start work in Iraq soon after signing deals during the Iraq Reconstruction Conference.

Iraq’s reconstruction, Abadi said, would cost $100 billion. The World Bank and donor countries are expected to contribute a major portion of those funds.

The reconstruction of Iraq is seen as an economic opportunity for Egyptian construction companies, which have been seeking to increase their regional presence.

Egyptian firms have a solid track record in the regional construction sector, which qualifies them for specialist reconstruction jobs in war-ravaged countries such as Iraq and Libya.

“Iraq, in particular, will offer a good opportunity for Egyptian companies and workers because the Iraqis are thirsty for Egyptian presence,” said Yumn al-Hamaqi, an economics professor at Cairo University. “Egyptian participation comes at a time the Egyptian economy is expanding and needs outside markets.”

Mahlab was given a warm official welcome in Iraq, which Egyptian analysts took as a positive sign of Iraqi interest in Cairo’s involvement in reconstruction operations. Abadi told Mahlab that Baghdad would give priority to Egyptian companies in reconstruction deals, Egyptian media reported.

Cairo has prioritised an export-oriented strategy, especially in relation to services, agricultural production and construction materials.

Egypt, which is working to bring down an unemployment rate of 11.9%, is also hoping to raise remittances from workers abroad by opening foreign markets to local labour.

Egypt’s labour market has been hard hit by a lack of demand in Arab Gulf countries, with some introducing austerity measures or favouring their own nationals.

Egyptian workers in other countries sent $24.2 billion home in remittances last year, which supported international currency reserves at the central bank. Reserves are at their highest in two decades at $38.4 billion.

Some Egyptian companies worked in Iraq before the emergence of ISIS, including in building the country’s mobile communications network and upgrading oil fields and facilities.

Egypt’s relations with Iraq have been growing steadily since 2014. Apart from signing a contract to import Iraqi oil for domestic use in 2017, Egypt offered military and intelligence support to Baghdad during the anti-ISIS operations.

Abadi has visited Cairo twice since becoming prime minister in 2014. Foreign Minister Ibrahim al-Jaafari has been to Cairo multiple times in recent years.

There are hopes in Cairo that Arab participation at the Iraq reconstruction conference in Kuwait and the subsequent rebuilding in areas ravaged by the war on ISIS will allow for better ties between Baghdad and other Arab capitals.

There have been fears in Arab capitals that the Iraqi government has been increasingly drawn into the orbit of Tehran since the downfall of the Saddam Hussein regime in 2003.

Egyptian and Arab participation in Iraqi reconstruction, analysts said, would open warmer channels of communication, which could reflect positively on relations with Baghdad.

“Nonetheless, it is necessary to remember that Iran is steeped in Iraq and some other Arab capitals,” said Hassan Nafaa, a political science professor at Cairo University. “This is why I think bringing Iraq back into the Arab fold, at best, or containing it, at worst, will take a long time and require a collective Arab strategy. This is something that can be difficult to form while intra-Arab rifts are at their highest.”