With Promise of Airport, Investment in Najaf Takes Off
Saturday, January 7, 2006
NAJAF, Iraq -- Just beyond the verdant scrub where women in colorful robes crouch to pick cucumbers, on a flat expanse bounded by a few miles of chain-link fence, is a smooth stretch of asphalt long enough to land a jumbo jet.
If all goes according to plan, the tract on the east side of this Shiite holy city will be reborn in less than a year as the $73.8 million Imam Ali International Airport, its soaring control tower shaped like a mosque's minaret. The privately funded facility could begin handling flights on a trial basis as soon as next month, with a blue tent serving as a terminal until construction is complete.
In a country starved for investment, the promise of Najaf's new airport, and a second one planned by the Iraqi government to the north, has helped spawn a wave of privately funded projects in various stages of development. Worth hundreds of millions of dollars and thousands of jobs if they reach fruition, they are establishing Najaf as southern Iraq's first boomtown, U.S. and local officials say.
"We have broken the barrier, and now the companies and their money are coming," said Munther Ajina, an Iraqi American who lives in San Francisco but returned to the city of his birth part time to serve as the provincial investment director in the office of Najaf's governor, Assad Abu Kalal. "This is a town that for 35 years Saddam Hussein fought to break down. Now we are on the rise."
The gold-domed Imam Ali shrine, sacred to the world's 120 million Shiites and also to Sunni Muslims, is believed to be the third-most-popular destination for Islamic pilgrimages after the Saudi Arabian cities of Mecca and Medina. It contains the tomb of Ali, the son-in-law of the prophet Muhammad. Shiites believe Ali to have been the prophet's heir.
With most of what remains of the $18 billion in U.S. reconstruction funds for Iraq to be spent this year, development experts and government officials say private-sector investment must now drive the rebuilding of the country, whose infrastructure has been devastated by decades of war and neglect.
Najaf's near-limitless economic potential was recognized long before the fall of Hussein's government, which brutally persecuted Shiites here. Three million Shiite pilgrims flock here annually, most of them from Iran, other Persian Gulf states, India and Pakistan. But since the U.S.-led invasion nearly three years ago, Najaf, 90 miles south of Baghdad, has remained poor, with most residents lacking the provisions of a modern city, including reliable electricity, potable water and a sewage system. The city's population is about 500,000.
Tourism bloomed briefly when Shiite pilgrims flocked to Najaf immediately after the invasion. But an uprising by a Shiite militia, which clashed twice with U.S. forces in 2004, kept visitors away until a truce improved the security climate dramatically. Real estate prices have jumped tenfold in the Furat district, two miles from the new airport, to about $100,000 for a three-quarter-acre plot, according to Hazim Hussein, a local broker. Much of the land is being bought by Iraqi investors and Iranian Shiites intent on owning property near the city's shrines. Iraqis from areas where violence is more prevalent are also coming here.
U.S. and Iraqi officials say there are no reliable figures on how much private money is being invested in Iraq. But they acknowledge that outside of the semiautonomous Kurdish region that has flourished in the north for a decade with the help of American money and military protection, Najaf has the greatest potential for prosperity.
"Obviously, Najaf wasn't secure for a while there, and now it has turned the corner, which encourages a different level of investment and type of investment," said June Reed, senior consultant for private-sector development at the U.S. Embassy's Iraq Reconstruction Management Office in Baghdad. "It has the makings of a nexus of economic development that can have spillover effects throughout its region."
But even here, severe challenges to private investment remain. Firms have struggled to raise investment capital to fund the projects they commit to building. And Western companies have been slow to join with local partners. Ajina said he had tried unsuccessfully to persuade Global Strategies Group, a London-based corporation that provides security for the Baghdad airport, to join the airport project here as a joint venture with an Iraqi contractor.
"Would we like to do it? Yes," Phil Jackson, development manager for Global's aviation business, said in December. "It has the opportunity to be the hub for the country."