*3 mins read.
The world’s tallest building is in Dubai – but not for long. Because in Basra, Iraq “The Bride” – a 604 story building – will soon rise, according to Business Insider.
Because I’ve been working in Iraq for a few years, friends and acquaintances always ask me about business opportunities in Iraq. Questions like: what are the best industries? What could I invest in? What does Iraq need?
My answers to these questions is simple, Iraq needs a complete reconstruction starting from underground with sewage systems, to street paving, to building bridges, hospitals, and entire cities.
There is a lot of interest, on the part of many different companies, to explore the new market after the political climate settles down and the war on ISIS ends.
And most importantly, Iraq has the resources to pay for it all. Iraq has the potential be the next Dubai. But what is stopping Iraq from becoming the next Dubai?
The answer to that is simple – the holy trinity!
- Who do you know?
- Who can you influence?
- Who can you bribe*?
Unfortunately, Iraq’s business market is run by powerful groups and elites, political parties who control government institutions. It’s not a monopoly, it is oligopsony.
After the collapse of the Roman Empire, a hierarchical feudal order emerged in Europe with kings, lords, and peasants. Just like that 2000 years later, after the collapse of Saddam’s regime, a hierarchical order emerged in Iraq with a few political parties, bureaucrats, and modern day sherpas.
Those political parties control the government and dedicated to building personal wealth, bureaucrats acting like bandits, and sherpas do the daily work.
I cannot explicitly use names of companies, but I can share the pattern of how doing business in Iraq is done.
For example, XYZ Corporation wants to open a business. XYZ seeks or knows someone in Iraq. This Iraqi person is related to someone who is influential. This influential person can collude/bribe with an official or member of a political party to bless all the paperwork through the bureaucratic channels. These Iraqi bureaucrats would sign, stamp, and shuffle the documents faster than calling back their wives – when, that is, they get a call from a political party member.
This official would bring protection against harassment from different sides too, and would probably offer militia protection at a discount.
Someone might ask: how do these companies bribe these officials? Well, very simple. This eponymous official has a close family member who acts as a consultant. This consultant signs the legal documents to obtain fees for his consulting services, provides account numbers for his off-shore accounts. As contracts get signed, money gets wired to those accounts – the holy trinity at its best!
Here is a video for an Iraqi recognized parliament member Hanan Al Fatlawi confesses on Iraqi National TV (min 1:04+): “Iraqi is a piece of cake. We divided it between us. Everyone took his/her piece, contracts, commissions,…all of us benefited…”
I provided the recipe of why nations like Iraq and others fail. There is no need for economic theories or open-market laws in a country where the laws of AK-47 and militia rules. Only those who Nassim Taleb refers to as “Intellectual Yet Idiots” who he describes as Ivy League educated yet “cannot find a coconut on a coconut island” would infer otherwise.
This oligopsony with its holy trinity is the single obstacle to economic growth. These people stand against the economic progress, which leads to unemployment and makes many people susceptible to be exploited by terrorist’s organizations.
If you are a major business and would like to invest in Iraq, it would be extremely difficult without the blessing of the holy trinity. Without it…I say good luck!
As for Iraq, it shouldn’t require the rise of a benevolent dictator to strike down this holy trinity with sledgehammer on an anvil to forge a brighter future and make Iraq the next Dubai.
*Bribe: It’s an interesting concept. It has a different meaning to different people such as consulting fees. Since the Creation (if you believe in the Bible) where the Serpent bribed Eve with an apple (eating a fruit), to Jared Kusher’s personal touch in weapons sale to Saudis, humankind has been bribing each other. It will not stop. And with $110 Billion, a lot of people believe you can even bribe god this time.
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