Iraq Is a Hard Sell

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Sooner or later, the lure of profit will steel the nerves. "If there is business here, if there are contracts to be had, people will come," says Stephen Orr, 41, from Mill Valley, Calif. A former assistant vice president at Merrill Lynch, Orr has spent months in Iraq helping the Iraqi-American Chamber of Commerce organize an international trade fair, Destination Baghdad Expo, which is scheduled to take place in the city next month. Only about 20 U.S. companies, including General Electric and Motorola, have registered. Orr suspects that many companies are discreetly sending Iraqi representatives to seek out contracts, even though "the tall redheaded guys like me might stay away."

Insurgent attacks on Westerners are not the only security risk. Iraqi businesses, which run entirely on cash, face old-fashioned armed robbery. Omar Tabrah, who with his brothers owns Baghdad's busiest money-transfer business, has lost about $850,000 to bandits in multiple holdups during the past six months. "That's a lot of money, but we'll make it up quickly," says Tabrah, 36. "We can close our company, and I can stay home with my wife and kids, but I won't do that."

Coalition officials tout the theory that a thriving middle class will inevitably demand an end to violence and ensure a peaceful democracy. "If you have a job and a home and a cell phone, you'll be a lot less eager to launch attacks," says Tom Foley, an investment banker from Greenwich, Conn., who runs private-sector development for the coalition in Baghdad. His argument may not be proved for years. But the belief that companies can help foster democracy while earning money has been a strong draw for Iraqi emigres. After decades of exile in the U.S., Sabah Khesbak, 50, flew home to Baghdad last October and landed a $500,000 contract for his engineering company in Tustin, Calif., to design four suspension bridges in northern Iraq.

But the land grab that Mulhern describes has in fact barely begun. Sure, Pepsi signed a new deal with its old bottler. Drive around Baghdad, though, and you will see little outward sign of Western business at work yet no McDonald's, Pizza Huts or Ford dealerships. "Who would be willing to come here?" Khesbak asks, laughing. "You have to be a little crazy."

Amid the craziness is hard-nosed business smarts, say those who are here. Of the $18.6 billion in reconstruction money approved by Congress, about $10.2 billion will be contracted out by July in tenders, much of it probably going to companies that are not yet here, according to the American administrator in Iraq, L. Paul Bremer. The entrepreneurs on the ground say the know-how they have developed through these hair-raising months will give them a hugely valuable edge over latecomers. Despite anti-U.S. sentiments among some Iraqis, most are hungry for things American after years of living under the embargo and being barred from traveling to the West. U.S. officials still expect big American companies with the new construction contracts to flood the country with subcontracting deals and other spending. Westmacott and Mulhern will be here, waiting. They are guessing that the latecomers will need everything from high-speed Internet service to luxury housing and security. All of which proves their point: for the stouthearted, this is a great place to make money.