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April 15, 2011

Boom Town

By Spear's

Amid the violence and unrest, everyday commerce in Baghdad goes on. It’s also playing an essential part in the rebuilding of a shattered society, says Ben Lando
 
 
THE PURPLE NEON
lights on the new Ferris wheel at Zaura Park usher in dusk on a Thursday, the start of the weekend, and families take advantage of a relative increase in security and the lull between the brief wet winter and seven months of scorching summer. There’s no night life to speak of in Baghdad, the amusement rides a respite from life. The increasing numbers of restaurants offer normal meals, friends and families gather around tables still mostly reserved for special occasions, if only to be out in public.

My destination this evening is across from the park, past the street vendors hawking a dozen brands of cigarettes for the local currency equivalent of dollar a pack, to the fine arts centre, where I’m meeting Karim Wasfi, the maestro of the Iraqi National Symphony Orchestra and de facto ambassador of Iraq’s stubborn history of ‘culture and civility’. I’ve come to realise this is Wasfi’s mantra for his country. During a recent conversation with representatives from the World Bank and the Turkish Embassy in Baghdad after a local business association meeting, he was touting his latest achievement: multi-billion Iraqi dinar approval (he won’t say exactly how much) from the Ministry of Culture to build an opera house and performance hall on the banks of the Tigris.

Always sporting a blazer or suit, a tie, and the upright appeal of the proud Iraqi intelligentsia, he is part cultural entrepreneur, part businessman. His current mission has him twisting funds from the grasp of the Iraqi government, luring Iraqi businesspeople to invest in society beyond simply imports and manufacturing and committing international donors and corporations to sponsor symphony performances in Baghdad and tours around the country.

We had planned to catch up over a drink at the Alwiya Club, a private former British officers’ club in central Baghdad, which survived many wars and governments, bringing into the unchartered territory of perpetual transition and sectarian infusion of today’s Iraq a fighting sense of historical purpose to Wasfi’s civility. Patrons still point out the chair that Gertrude Bell preferred. Alcohol is still served (except during the government’s random, temporary crackdowns) along with traditional fish, meat and salad dishes that standardise Baghdad cuisine. There is occasional live music and regular wedding receptions. It’s one of two private clubs in Baghdad. But Wasfi, in his rushed schedule, was waylaid by a bout of the flu, instead fitting in an interview during the break of a symphony rehearsal.

As I walk past the plain-clothes guards and into the reception room of the fine arts centre, I can barely hear violin strings, brass section and timpani. Flyers are being glued and collated for promoting an upcoming performance. A step into the theatre is a step out of today’s Iraq and into one of yesterday and tomorrow. Wasfi took the helm of the 60-year-old INSO as bombings in Iraq escalated to unimaginable rates.

Once I asked him when he realised the irony of making music in a war zone, and he said playing Bach with a pistol tucked in his waist. ‘We are witnessing people, the new middle class, following up and attending concerts. Some of them are the intellectuals of Iraq, those who are still around,’ Wasfi says, in his office in the basement. He runs a tuition-funded music school and is trying to pair relatively successful government support — he’s secured $1.5 million for orchestra members’ stipends and other salaries — with funds from the business community to expand the local arts scene, once vibrant.

‘It’s patriotic… I’m not trying to find bourgeois support,’ he said, and I asked him how he pitches this to business leaders. ‘The private sector should be partially considered part of the equation to stabilise the social life of Iraqis. If you support cultural activities — or orphanages, etc — it will benefit your business.’
 
 
BAGHDAD TODAY IS a city so dichotomous it resembles a dream world (the optimist’s way to spell nightmare, born of invisible red tape and ever-changing bureaucracy amid still daily post-conflict violence). New construction, mostly government projects, is still dwarfed by aged buildings and those blighted by bombs. Despite an orgy of oil money — averaging $5.7 billion a month so far this year — services remain dismal, giving slogans to the public protests over the past months.

The enigma is the reality which is the only explanation for how life somehow manifests itself each day. There are no official data on the richest of Iraq, no high-net-worth index or any official or unofficial means to put a dollar value on an individual or company. Average government workers earn between $600 and $1,000 per month, and the private sector is estimated by the World Bank at 40 per cent of GDP, compared to the regional average of 60–70 per cent.

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The Central Bank of Iraq says per capita income is rising, but because of natural secrecy or plain paranoia no one discloses their cash assets. Most are shuffled among family members anyway, and bank accounts outside the country are preferred. The seriously wealthy, it would seem, came to it the easy way: contractors boomed off US and Iraqi government contracts, and elected officials earn pay cheques for the rest of their life, even after, for example, serving as Member of Parliament, for which the lowest-level politico takes in about $30,000 a month in salary and stipends for security and housing. The prime minister’s full salary isn’t revealed, but is estimated at well over $250,000 a year.

Traffic jams last all day, and it takes hours to travel half a dozen kilometres during rush hour. The dirty main streets are becoming a bit cleaner with the outsourcing of municipal services to a Turkish company, but they are still choked by the post-2003 influx of auto imports and the concrete maze of blast walls. Low-end Korean and Iranian imports tangle with bygone-era jalopies, held up in traffic by any number of impediments, including the ire-inspiring convoys of political officials and other VIPs in loaded, tinted-window, armed and aggressive sports utility vehicles that claim de facto ownership of the public roads.

Land Cruisers and Range Rovers are the SUVs of choice. ‘It’s true that expensive cars are bought by the Iraqi government, but mostly they get them directly from Germany,’ says Basheer al-Obaidi, the showroom manager of the only authorised Mercedes-Benz dealership in Baghdad. The showroom has a handful of cars and a single desk with leather chairs for visitors, from which Obaidi explains the ebbs and flows of the business. I point to one sleek car and ask the floor price: $78,000.

Without making eye contact with it I point to the car behind me in the showroom. ‘That one is $120,000,’ Obaidi says, and as if on cue at my unfiltered gasp at the wondrous paradox that is Baghdad, two tattered girls rush into the showroom but an attendee whisks them out before they can ask for a few dinars. The most popular vehicle they sell is the $40,000 E-Class, Obaidi says, ‘but members of the Iraqi Parliament and government buy G-Class and S-Class.’ He says he’s happy in his job (even a bad job is hard to come by in Iraq) but pessimistic about the future, and simultaneously understanding and dismissive of Iraqis who, he says, purchase the Benz in Baghdad and take them to their homes in neighbouring Jordan, where luxury items are more expensive but security is better.

He’s worked at the Iraq Automotive Group for two years. I ask him for any business benchmarks, trying to get a sense of their profit margin, and he says: ‘You mean key performance indicators? These standards are applicable in other countries, not here.’ Still, business is doing well, he says, offering at least that 2010 revenues were about 500 million Iraqi dinars (about $417,000). The money is mostly made from servicing these and the much bigger commercial Benz fleets, like trucking. ‘When it comes to commercial vehicles, business is very good. But when it comes to passenger cars, business is weak.’

Why open a high-end auto dealership in Baghdad, then? ‘It’s a matter of competing between the rich of Iraq. Everyone is trying to get a dealership.’
 
 

Illustration by Femke de Jong

THE ENTREPRENEURIAL HUSTLE that defines Baghdad today, foreshadowing one potential possibility for Iraq’s future, is best embossed in the high-class Jadriya neighbourhood, along the banks of the murky Tigris, overlooking the belching refinery in the city’s still restive Dora neighbourhood. Ten months ago a glass and marble oddity arose from what was once a small shack on a big garden plot. The Lebanese Club is not private, but the prices ensure that only a certain crowd venture past the security pat-down for a meal in its split-level dining and VIP rooms.

Perhaps, if the weather is cool enough, Iraqis and foreigners, eating meals and carrying on business meetings, might have chosen a table on the patio overlooking the river. Two dirtied fishermen in a canoe try to sell fish to the manager.

The courses are mostly Middle Eastern fare, usually followed by traditional tea and flavoured tobacco shisha pipes. As the employees of a local pharmaceutical company enter the outdoor dining room, ‘Tony’ sits down. Antoine el-Hage, a Lebanese man referred to as ‘the foreign relations manager’, says he handles bookings and he basically schmoozes patrons. He points to a nearby table of secretive bankers and insurance brokers. ‘He’s got his own private plane,’ he says, pointing to one.

A young Iraqi from the table walks over to us, his suit coat off, some of lunch still on his blue button-down shirt, and he and Tony walk and talk quickly by the river. Tony runs an insurance company on the side, focusing on Iraqis travelling to Muslim shrines in Saudi Arabia; the young man, an Iraqi named Akeel, runs a transportation company that arranges logistics for the pilgrims. They needed to coordinate ahead of an important meeting the next day.

The co-owner, an Iraqi called Raheem al-Zaidi, and I sip fresh squeezed lemon and mint juice, as he explains his global travels as a businessman — among other projects, a 22-year-old cement mixing and sales factory, the family trade — made him realise what opportunity he had. ‘I don’t think there’s any other place like this in Baghdad.’

He and his partner considered making it private but didn’t think the customers would come. They wanted to sell alcohol, but opted for the family crowd (and didn’t want the troubles that alcohol sellers face: ‘Sometimes the Islamists close it, and then the secularists open it and then they close it again; we’re just confused here’).

He tells me the Lebanese Club is successful both because it’s good business and Iraqis have few options for entertainment on this scale. ‘I stayed here and I put my money in this because I like Baghdad,’ he says. ‘I don’t want to leave it.’

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