French Telecom giant Alcatel is to start work on a $75 million telecommunications infrastructure project in Iraq, a project made possible after the US ceased objections to several “dual purpose” telecom projects in Iraq. In a strange twist, the Chinese company that played a key role in reversing the US position has now backed out of a $28 million contract to build a mobile telephone network in Baghdad.
According to the Far East Economic Monitor, China’s Huawei Technologies signed a deal with Baghdad as early as 1999 to provide mobile telecom equipment to the Iraqi capital. On January 9, 2000, the Shenzhen Commercial Daily newspaper described a visit to the company by Iraqi Deputy Prime Minister Tariq Aziz. "Huawei and Iraq have an excellent cooperative relationship," the article quoted Aziz as saying. "We hope that this cooperation will become even better in future."
The Huawei-Iraq relationship was soon rocked, however, by American accusations that Huawei Technologies was helping Iraq to upgrade its military communications system. Specifically, the Pentagon alleged that Huawei was violating the UN sanctions by providing fiber-optic connectivity between Iraqi antiaircraft batteries, improving their ability to hit Western aircraft.
The past year has seen several firing incidents between patrolling US aircraft and such Iraqi anti-aircraft installations. Beijing and Huawei both denied the US accusations, which became a point of contention between the American and Chinese governments. .
The Chinese – American tension on this point changed in June 2001. According to the Washington Post, after Russia blocked the US proposal for “Smart Sanctions” on Iraq, China agreed to back a key element of the “Smart Sanctions” policy – a “Goods Review List”. This is a list of items that, because they have a “dual use” nature that would allow them to serve for both military and civilian use, would require council approval before they could be imported into Iraq.
As China gave the “Goods Review List” it’s backing, the US ceased objections to more than $80 million worth of Chinese telecommunications contracts. In July 2001 the UN announced approval of Huawei Technologies’ telecom project in Iraq.
French officials and Alcatel representatives, encouraged by this change in US policy towards China’s telecom contracts in Iraq, approached the White House for similar treatment. The US subsequently approved some $76 million of telecom infrastructure projects that Alcatel had signed with Iraq. American officials told the Washington Post that the Bush administration released nine Alcatel contracts for microwave and digital radio links and other telecommunications equipment, but continued to block a $333,000 Alcatel contract for fiber-optic equipment.
The story, however, was not over. Just as Alcatel was announcing it would be going into Iraq, Huawei Technologies was pulling out. In a surprising announcement, an Iraqi official spokesman was quoted by AFP on September 6, 2001 as saying that Huawei Technologies “has withdrawn from the contract for unknown reasons”, and that Iraq would be seeking alternative mobile telephone solutions. The reasons for the Chinese pullout are not yet clear, but may have something to do with Huawei Technologies rumored ambitions for an upcoming NASDAQ listing. — (Mena Report)
© 2001 Mena Report (www.menareport.com)
