By Michael Muth, GlobalBiz columnist
Increasingly, small businesses are targeting a global market. In this GlobalBiz c0lumn, Michael Muth interviewed technology project manager and Wilmette resident Terry Tierney, who spent12 months in Iraq during 2007 and 2008 as part of a Computer Sciences Corp. team charged with evaluating Iraqi factories owned by the central government and determining the best way to restore production. The team had funds authorized by Congress to invest in machinery and improve operations at Iraqi-owned enterprises. The group worked out of the Camp Victory Army Base, traveling to Kurdistan regions and the Green Zone. The transcript of the interview was edited for clarity by Northwestern University journalism student Hallie Busta.
Terry Tierney: It was a great way to do my part to bring a successful conclusion to our involvement there. It would help to build an exit strategy and to serve as a model in other places, economically and militarily. We re often looked upon as the world leading economic power and as a policeman. This kind of initiative can get us out of that role and into a rebuilding role.
Muth: What did you do in Iraq?
Tierney: We had a $50 million spend plan authorized by Congress to invest in Iraqi state-owned enterprises to invest in machinery to enable them to turn the lights on and create jobs….We d visit a factory for two to four hours, observing a typical workday. For security reasons, you couldn t predict when we d be at specific locations. We d put together a two-page write-up on the marketability, employees, how many jobs could be created and religious affiliations. We were often sourcing machines, generators and equipment needed for these factories, so we d spend time researching on the Internet and on the phone.
The biggest grant we had was for a fertilizer factory in northern Iraq. Trucks and buses are big, as are ceramics, plastics and bicycles. Textile companies are common, and jobs in textile factories support many widows. Most were medium-large operations because they were owned by the central government. We were looking to create jobs. Determining how many were on the payroll was difficult. Factories were a form of a social security system. Each worker might support 10 to12 people at home.
We would meet with the Iraqi director generals in charge of various state-owned enterprises. We made major investments ranging from $150,000 to as much as $6 million in two dozen plants. If we bought parts for tractors and other machinery, this was all done according to formal contractual specifications and processes to insure proper disposition.
Muth: Sources say that the Iraqi market has strong, long-term economic potential. How so?
Tierney: I agree with that. It has the third-largest oil reserves in the world. It is Western-oriented. Education and training programs are still functioning. There are Iraqis nearby who are waiting to come back.
Muth: According to U.S. data, the majority of Iraq wealth comes from the production and sale of crude oil, processes that are primarily controlled by the Iraqi government. So oil exports will be the driving engine of government spending and economic development in Iraq. What other sectors are worthwhile to investors?
Tierney: Let me mention six: textiles, construction materials, engineering services, food and drugs, industrial services and chemicals/petrochemicals. For jobs and future investment, a stable monetary system is important with electronic-funds transfers, banking and credit cards. Cell phones and broadband will all be important to the Iraqi citizenry. The Ministry of Industry and Minerals recognizes the Iraqis need to move beyond that, be it construction and cement or waste management to get rid of scrap metals. They re putting in an oxygen plant for hospitals and welding purposes.
Muth: Boeing signed a $6 billion contract with Iraqi Airways, and General Electric signed a $3 billion deal with the Iraqi Ministry of Electricity, both in 2008. Are the opportunities in Iraq for big companies only?
Terry Tierney: There are opportunities for small companies. Some companies are interested in tenders for joint venture and partnership opportunities. You can go to conferences in the region, research the U.S. Department of Commerce knowledge base or contact Iraqi chambers of commerce.
I went to one of the first Baghdad trade shows held at the Al-Rashid Hotel. They had more than 170 exhibitors who were proud to set up booths to sell their products and services. We were setting up electronic-fund transfers. Once we realized that credit checks wouldn t work, we found workarounds for those restrictions.
Listen to the complete interview here.
This column was sponsored by Interpro Translation Solutions, a Lisle provider of software localization and translation services. http://www.interproinc.com