IT firms may gain Iraq reconstruction

Taiwan's computer and telecommunications industries could be major winners in the post-war reconstruction of Iraq, according to local experts.

"Iraq's post-war reconstruction requirements will include a lot of computer and telecommunications equipment, and as Taiwan is the world's greatest supplier of technology, it is very likely that a lot of orders will come our way," Chen Wen-tang (陳文潭), research director at the government-funded Market Intelligence Center, told the Taipei Times yesterday.

Taiwan supplies over 90 percent of the world's motherboards -- the circuit boards on which a computer system is placed -- and over 60 percent of the world's notebook computers, Chen said, stressing the importance of the nation to the global technology market.

However, Taiwan may not be able to secure orders directly from customers in Iraq. "It will not be so easy for Taiwanese manufacturers to get into the Iraq market as they have very little experience in the region," Chen said. It is more likely that Taiwanese manufacturers of made-to-order systems will get orders from the US and UK-based companies that are awarded contracts to rebuild Iraq's government infrastructure, Chen said.

The lion's share of reconstruction projects for Iraq's shattered infrastructure is expected to go to US and UK companies, but according to a report from the US Agency for International Development, around 50 percent of the contracts will be outsourced to foreigners. In addition to technology products, Taiwanese companies could bid to deliver metals, medical supplies, clothing, and electric fans to Iraq, and even to work on major construction projects like waterways, airports, schools and houses.

A report compiled by Chen for the Ministry of Economic Affairs' Industrial Technology Intelligence Service estimates that Iraq suffered US$237 billion in losses as a result of wars in Iran, Kuwait and an ensuing decade of economic sanctions. The nation requires at least US$350 billion in investment to regain its former economic standing, the report said.

Two areas where the Taiwanese may have opportunities for direct computer sales to Iraq are the corporate and consumer markets. "The corporate and consumer markets in Iraq are not very big -- we estimate around one million units of computers per year after the war -- but Taiwanese could sell on to Iraq through resellers in Dubai, for example," Chen said.

A mistrust of anything American or British may lead Iraqi citizens to shun US and UK products, creating opportunities for cheaper alternatives made by Taiwanese companies, the report said.

From Dubai, Taiwanese exporters can market to other countries in the region.

"Dubai is a logistical center for the whole Middle East, including Iraq, Iran, Saudi Arabia, even Lebanon and it is very easy to ship products from Taiwan to Dubai," said Steve Yang (楊梓挺), director of the Taiwan Trade Center in Dubai. "We can help Taiwanese companies by providing them with contact names and addresses of exporters and importers."

But the market for computers and telecommunications products may still be very limited. Forty percent of Iraqis are illiterate, and currently only 12,000 of them are on-line, according to the report. With an average annual income of less than US$600 -- roughly the cost of a new PC -- it may be some time before local companies cash in on post-war Iraq.