Peace stand may cost French firms in post-war Iraq

Reuters | 2/25/03 | Rebecca Harrison

[kattracks]

PARIS, Feb 25 (Reuters) - If Saddam Hussein is right and a war in Iraq is all about oil and money, then French firms risk losing out big time on both.

Experts say France's sceptical stance on war in Iraq could cost its firms hundreds of millions of dollars in the short term if a miffed United States squeezes them out of contracts to rebuild a country ravaged by allied troops.

The bombs have not even started, let alone stopped, and western firms are eyeing golden business opportunities in a land that could hold out the promise of petrodollars and juicy construction deals.

But in Paris boardrooms, where CEOs once hatched chunky deals with Iraq, the worry is that the "cheese-eating surrender monkeys", as the French are being called by some U.S. media commentators, might not get their slice of the camembert.

"France has put nearly all its economic interests in jeopardy by refusing to back the U.S.," said Toby Dodge, an expert on Iraq at Warwick University.

"If France is not there at the beginning of the war, then it could find itself isolated, and French companies are very much aware of that. After the war, when the United States is handing out contracts to patch up Iraq, then France could be frozen out."

German firms too might be cut out of contracts after its government riled Washington by shunning war. With fewer historic links in the region, however, they have less to lose than their counterparts in France, traditionally one of Iraq's top trade partners.

Mark Malloch Brown, head of the U.N. Development Programme, said last week rebuilding Iraq could cost up to $30 billion over three years and that figure could eventually rise to $100 billion.

Firms such as France's Lafarge , which has an extensive presence in the Middle East, or Germany's Siemens , which reopened for business in war-wrecked Afghanistan this month, could in theory stand to benefit. But some analysts reckon these firms could be frozen out.

"I would imagine that Germany's stance on the war would be a factor weighing against German companies (getting orders)," one London-based construction analyst said.

REBUILDING IRAQ

But TotalFinaElf's Chief Executive Thierry Desmarest last week, while conceding that the French stance could make the French oil major's position in Iraq "more complicated", said it was confident of winning some deals.

Experts agreed, saying Iraq's crippled industry will need up to $40 billion in investment after years of war and sanctions, meaning there will be only a small pool of firms with resources big enough to take up deals, so ensuring Total will get a share.

"The priority will be to get the existing industry up and running... after that we can start developing new fields, which will probably be done by consortia (of oil majors)," said energy expert George Beranek at Washington-based think tank PCF Energy.

Similarly, while France and Germany may miss out in the immediate aftermath of war, experts say their construction firms could still win contracts later, when the United States quickly hands over the aid effort to international organisations.

"While France might not want to be part of tearing Iraq apart, they will want to be part of rebuilding it," said Dodge.

FRENCH AMBITIONS

France's Ministry of Foreign Trade declined to comment on the country's post-war role, shrugging off questions about dishing out contracts as pointless, "when we're not even at war yet".

A spokesman said French exports to Iraq under the U.N. oil-for-food programme netted a mere 650 million euros in 2001.

Experts say this is a whisker of what France made in exports before sanctions were slapped on Baghdad after the last Gulf war -- a figure the Ministry of Foreign Trade declined to provide.

But it still makes France Baghdad's number one supplier, according to the Centre for French Foreign Trade (CFCE).

Analysts reckon French car-making duo Renault and PSA Peugeot Citroen eventually will aim to get their cars on Iraqi roads or at least to sell trucks, tractors and ambulances for the reconstruction effort.

The firms, which both already export tractors, cars or ambulances under the U.N. oil-for-food programme, were tight-lipped on Iraq's business potential, despite visiting Baghdad's trade fair last November. "I think (their presence at the Baghdad fair) is a sign that they have ambitions there," said Mark Fulthorpe, an auto industry analyst at consulting firm CSM Europe.

But here too, France's opposition to U.S. military intervention could scupper potential deals, said Fulthorpe.

"The problem is who are they seeking to impress? I wouldn't be surprised if some scores are settled when it comes to doing business in post-war Baghdad."

((Reporting by Rebecca Harrison;

[PhiKapMom]

IMO they should completely freeze out the French!

[barker]

"cheese-eating surrender monkeys"

If they get squeezed out all I can say is "Gouda".

[scooby321]

don't forget the OIL!!!!!!!!

[P.O.E.]

One day as the Little Red Hen was scratching in a field, she found a grain of wheat.

"This wheat should be planted," she said. "Who will help me plant this grain of wheat?"

"Not I," said the Duck.
"Not I," said the Cat.
"Not I," said the Dog.

"Then I will," said the Little Red Hen. And she did.

Soon the wheat grew to be tall and yellow.

"The wheat is ripe," said the Little Red Hen. "Who will help me cut the wheat?"

"Not I," said the Duck.
"Not I," said the Cat.
"Not I," said the Dog.

"Then I will," said the Little Red Hen. And she did.

When the wheat was cut, the Little Red Hen said, "Who will help me thresh the wheat?"

"Not I," said the Duck.
"Not I," said the Cat.
"Not I," said the Dog.

"Then I will," said the Little Red Hen. And she did.

When the wheat was threshed, the Little Red Hen said, "Who will help me take this wheat to the mill?"

"Not I," said the Duck.
"Not I," said the Cat.
"Not I," said the Dog.

"Then I will," said the Little Red Hen. And she did.

She took the wheat to the mill and had it ground into flour. Then she said, "Who will help me make this flour into bread?"

"Not I," said the Duck.
"Not I," said the Cat.
"Not I," said the Dog.

"Then I will," said the Little Red Hen. And she did.

She made and baked the bread. Then she said, "Who will help me eat this bread?"

"Oh! I will," said the Duck.
"And I will," said the Cat.
"And I will," said the Dog.

"No, No!" said the Little Red Hen. "I will do that." And she fed her little chicks.

[AmericanBabe]

Why are we going to leave the re-building to a UN coalition? It seems as though we'll do the dirty work, and they will get the oil contracts to rebuild.

NO!

We should squeeze them out, both France and Germany. No French cars on Iraqi roads...

[Snerfling]

Of course the French and Germans are going to be frozen out. In fact, I would surmise that the real Bush economic plan (which is never discussed publicly for obvious reasons), is two-fold: get mortgage rates under 5% as a result of radical disinflation driven from gas priced at less than $1/gallon, and pump up US manufacturing (telecom, heavy equip, etc) and off-shore construction resulting from the rebuilding of Iraq.

Dow 10k by the end of the year.

[Coop]

Now that's just silly! How's a hen supposed to operate an oven, much less knead the dough? Sheesh!