South Koreans chase profits in northern Iraq

19 Aug, 2004

South Korean businessman Kim Jeong-Hee experiences close Kurd-Korean co-operation daily: everywhere he goes he is accompanied by a Kurdish peshmerga soldier armed with a Kalashnikov rifle.
Jeong-Hee arrived in Iraq's Kurdish zone last month as part of a 3,600-strong South Korean military deployment to the city of Arbil which Kurds hope could yield business opportunities with Korean companies.
Kurdish leader Nechirvan Barzani is visiting South Korea to promote friendly relations and his delegation, which includes Kurdish business representatives, will meet Korean industry chiefs to explore corporate co-operation.
In Arbil, a close relationship is already developing between Korean business and the Kurds.
While most foreign companies in the Kurdish zone use western security experts to protect their employees, Jeong-Hee and around 40 other Korean civilians are guarded by members of the peshmerga militia, the Kurdish standing army.
"The peshmerga's strongpoint is that their mentality is very good ... and it certainly makes things easier when we pass through checkpoints," said Jeong-Hee, a-35-year-old contractor.
Jeong-Hee points to South Korea's use of Kurdish firms to help construct a multi-million dollar base for Korean troops on the edge of Arbil to illustrate budding business ties.
His company is overseeing the creation of the facility on behalf of the Korean military, which recently awarded contracts worth $2.3 million for Arbil businesses to provide construction materials and other equipment.
"This is a good opportunity to increase the co-operation and relationship between our countries," Jeong-Hee said.
"It wasn't easy since we need trustworthy merchants and we're not familiar with the environment ... but we think this (project) will have an impact on Arbil's economy."
Many foreign firms have long operated in Iraq's Kurdish zone, which gained autonomy from Baghdad after the 1991 Gulf War and preserves a much greater degree of stability than much of the south and central parts of the country.
South Korea began deploying in July, hoping to minimise the risk to troops it agreed to contribute to the US-led forces in Iraq by basing its forces to the Kurdish area.
Kurdish companies already have a history of ties with South Korea - their zone has been a transit point for millions of dollars worth of Korean electronics products each month.
Kurdish businessmen are particularly keen on the prospect of future Korean private investment in the Kurdish area, rather than short-term gain from military contracts.
Ibrahim al-Sofy is head of al-Sofy company - one of four successful bidders for the military contracts and now the sole Kurdish supplier of electronic goods and office furniture to the Korean military.
"A million-dollar contract is nothing particularly huge for us," said Sofy, who employs more than 50 permanent staff. "The exciting thing is that the Koreans are indicating there could be more opportunities to come."
Sofy started trading with South Korean companies in the 1980s, importing textile and fabric products totalling more than $12 million since his company's inception in 1982.
He said he was trying to persuade his Korean partners to establish a factory in Arbil to make textiles from the large amounts of raw fabric produced in the Kurdish area.
"Millions of metres of fabric are produced here daily - a textile factory here could be a massive business," he said.
Arbil's business community is still waiting for the Koreans to announce reconstruction projects in the Kurdish zone but trade opportunities are already being explored, officials say.
Latif Aref, general director of the Kurdistan Regional Government's office for registering companies, said there had been a 25 percent rise in new registrations of Kurdish companies since Arbil was formally selected as the location for the Korean deployment.
"We are going to see much wider export and import trade with the Korean market," said Aref, adding that a long-awaited foreign investment law would soon be put into action.
Sitting outside Arbil's unfinished airport terminal with his Kurdish mobile phone glued to his ear, Jeong-Hee agreed that the Kurdish zone could be ripe for foreign investment - provided the investment laws provided guarantees for foreign firms.
"The region does have good advantages - like easy access to Turkey, Syria and Iran. The Kurds could make this area into prosperous free-trade zone," he said.
As he headed off to a meeting with his peshmerga bodyguard in tow, Jeong-Hee offered a brief assessment of the main issue overshadowing the Korean deployment.
"Security? Well, it's better than Baghdad - but nobody can guarantee perfect security in Iraq."

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