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U.S. retailers get chance to help Iraq's economy
Monday, August 13, 2007 

BAGHDAD: Iraqi and U.S. officials think Iraq's ailing economy could get a lift from U.S. consumers interested in giving Iraqi-made clothes as gifts for the holidays.

"We are hoping if everything goes well, by Thanksgiving and Christmas we will have from the Mosul factory teenage clothing, and from the Najaf factory ready-made suits, and from the leather industries here, leather jackets, and so on," Sami al-Araji, the deputy industry minister, said Sunday during the announcement of a plan to put state industries back to work.

Araji said a U.S. team led by Paul Brinkley, the deputy under secretary of defense for business transformation in Iraq, was in discussions with major U.S. retailers like Sears, Wal-Mart and J. C. Penney to have the clothing on sale in some major cities by the holiday season.

The move into U.S. markets would be mainly symbolic, he said, involving 10,000 to 12,000 leather jackets, 20,000 to 25,000 suits priced around $80 to $90, and a similar number of garments for teenagers.

Brinkley is a proponent of the theory that getting state-owned Iraqi industries back to work will revitalize the economy and lure unemployed Iraqis away from the insurgency.

Restarting Iraq's state-owned companies, regarded by some critics as an inefficient throwback to the Saddam Hussein era, would be a reversal of the privatization model championed by L. Paul Bremer, the U.S. proconsul who governed Iraq from May 2003 to June 2004.

Speaking Sunday in the fortified Green Zone alongside Araji and Bayan Jabr, the finance minister, Brinkley said privatization remained the goal but that revitalization of the economy was crucial to the counterinsurgency plan of General David Petraeus, the commander of U.S. forces in Iraq.

"Economic development," Brinkley said, "is at the core of his vision of how we bring political, economic and security restoration as a three-pronged effort here to create stability and enable the eventual drawdown of our presence here and the establishment of a stable government."

Some American officials urged caution. A senior U.S. Embassy official said last week: "You have to look on a case-by-case basis. One of the interesting trade-offs that we face in looking at these enterprises is that they all tended to be very large consumers of electricity, and this is one of the real tensions.

"I don't think anybody has a problem in principle with the idea that if you can put people back to work, that is a good thing. That is not, in this situation, an idea that people would argue with, but the question is, at what cost are you going to be doing that? And if the cost is taking a lot of electricity from the grid, maybe you want to look at what the alternative uses of that might be."

The effort to restart factories is not the first indication that the government of Prime Minister Nuri Kamal al-Maliki aims to pump cash into the economy. There are also plans for $30 million in micro-loans to small businesses, agriculture and government welfare programs.

Last month, at the start of an initiative to subsidize farmers, Talib Aziz, a U.S.-educated economic adviser to Maliki, said: "The idea in the beginning was that unless security is provided in the country, the economy won't move. The prime minister thinks the reverse, that the economy needs to improve in order to improve security."

"The economy now is stalled, so he is doing just what FDR did in the Great Depression," he added, referring to Franklin D. Roosevelt, who fostered the New Deal to help the U.S. economy.

U.S. retailers get chance to help Iraq's economy -  Source

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