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Nemir Kirdar, President and CEO of Investcorp Addresses the Future of Iraq

By most account this last week U.S. and UK armed forces made significant headway in the war in Iraq, moving closer towards removing Saddam Hussein’s regime from power and subsequently launching Iraq towards a new, albeit uncertain future. For those of us less familiar with the history and background of the Middle East, understanding where Iraq came from and where it might be headed, can often be a confusing task.

Fortunately, the HBS community was visited last week by Nemir Kirdar who was born and raised in Iraq and remains an active advisor to many governments and heads of state in the Gulf region, to help provide context to Iraq’s past and possible future.

In addition to his diplomatic efforts, Kirdar is the CEO and President of Investcorp, one of the world’s leading private equity firms and the first that is Arab-owned. He himself is from a prominent Iraqi family that fled the country once Saddam took power and have been in exile ever since.

Kirdar, who on that fateful summer day when Saddam took control of Iraq was in his junior year at university in Istanbul, vividly remembers receiving a message from his father instructing him to flee to the United States. Kirdar subsequently landed penniless in the U.S. and began searching for a university that would accept his three years of college credit towards graduation. He eventually completed his degree in California and recounts washing dishes and sweeping floors to make ends meet. He reserves a great love and respect for the U.S., he says, because “The U.S. gave me the opportunity to re-start my life.”

The Iraq from Kirdar’s childhood however is far different from the one we see today broadcasted across our television sets. Kirdar recalls growing up in a country with a constitutional monarchy and an elected parliament where all ministers were responsible and accountable. He also remembers a diverse Iraqi populous – Sunni, Shiite, Christian, Jew, and Kurds – living in harmony and where everyone had an equal chance.

The parliament itself reflected the diversity of the populous and the Minister of Finance was Jewish.

The Iraq Kirdar describes had evolved from a heterogeneous population that had grown and prospered under Ottoman rule for the 600 years prior to 1921. Until that time, the area today known as Iraq consisted of three separate states that all reported to Istanbul. When the Ottoman empire fell, the British arrived in Iraq to help the country reestablish itself and quickly helped the Iraqi’s enact a new constitution and parliament. The country Kirdar grew up in also enjoyed significantly improved economic conditions as 30% of the country’s oil income was designated to fund the government wile the other 70% was reserved for development projects aimed at investing in the future of Iraq.

As a child, Kirdar held every expectation that the pro-Western, free-enterprise, parliamentary Iraq he knew, would be the one in which he would eventually serve in public office and grow old in. His path and that of every Iraqi however was suddenly changed in what amounts to a two hour time frame that changed the destiny of Iraqis forever.

Iraq, who at the time was considered by many to be a very pro-Western country, explained Kirdar, was caught in the conflicting forces of the Cold War. On July 14, 1958, apparently influenced by Egypt and other communist forces, a small number of armed Iraqi army officers suddenly and swiftly killed all the ruling members of the country, dissolved the parliment and took over the country. This coup lasted four years, only to be replaced by the next coup. This pattern continued until 1969 when Saddam Hussein came to power.

As has been widely documented, Hussein quickly worked to consolidate his power and terrorize the country. Hussein succeeded in creating a culture of fear in Iraq in which anyone suspected of being “against the regime” would be immediately killed as would be their family and friends.

Thousands of Iraqis are suspected of having met an untimely death as a result of Hussein’s long reign of terror.

Kirdar maintains that this sort of culture cannot be changed from the inside and instead required an international force such as that of the current U.S. and UK initiative to make the necessary changes in Iraq.

Hussein’s culture of fear, coupled with his suspected creation of weapons of mass destruction and the harboring of international terrorists, not to mention the tragedy of 9/11, was enough to establish the presence of a very dangerous situation that needed international intervention.

Today Kirdar proudly points to the joy visible on the faces of Iraqis in Baghdad many of whom in the last few days have emerged to celebrate the end of Saddam Hussein’s reign. Kirdar considers their joy to be a testament to the need and will of the Iraqi people to be liberated from the Saddam’s rule. To make this mission a total success however, Kirdar maintains that the following three steps must be taken:
Step 1: A policy decision had to be made to get rid of Sadam Hussein and his government.
Step 2: A committed military force was necessary to implement Step 1.
Step 3: A comprehensive reconstruction plan for Iraq that involves, among other things home-grown Iraqi leadership and democratic elections.

Kirdar point out that reconstructing Iraq, while clearly a monumental task, can have extraordinary success if managed correctly. He acknowledgeds however that there still exists a great amount of fear among the Iraqi people and it will take a long time for Iraqis to regain their self-confidence and build their country again. The Iraqis, Kirdar believes, were not loyal to Sadam – rather they were living and operating out of fear of a terrorizing regime. Upon liberation, Kirdar suggests the world will discover an entirely new Iraq.

Kirdar also points out that Iraq will greatly benefit and ultimately prosper from an abundance of natural and human resources. Unlike other developing nations, Iraq is blessed by two major rivers flowing through its country, fertile agricultural land in the mountainous areas, not to mention the world’s second largest supply of oil. Furthermore, Kirdar maintained that the people of Iraq have enormous potential and with the right direction can re-build a great country. Kirdar however felt very strongly that future Iraqi leadership should come from within and be elected by the Iraqi people and not appointed by an outside government or world agency. Doing otherwise, Kirdar maintains, would constitute an artificial democracy and would undermine the efforts to rebuild the country.

Kirdar also feels strongly that the country should be divided geographically and not by ethnicity. He points back to when the British first assisted Iraq in establishing their constitution and parliamentary government in 1921, they divided the country into fourteen states and appointed a governor for each state. This time Kirdar suggests, the country should again be divided into fourteen states but each governor should be elected by the local people within that state.

While Kirdar would welcome the involvement of the United Nations in the reconstruction of Iraq as a global sign of support and approval, the presence of the U.S. and UK armed forces he believes are also necessary to preserve the security and stability of the country. Kirdar also maintains that those Iraqis living in exile who choose to return and seek leadership roles in the new Iraq, should do so only by the election and support of the actual Iraqi people. When asked by a member of the audience if he was looking himself for a political role in the reconstruction of Iraq, Kirdar laughed and said at his age he is not looking for a new job but expects other exiled Iraqis seeking political roles to do so only by election of the Iraqi people.

Finally, Kirdar is very hopeful that a stable and prosperous Iraq could become a beacon of hope for the entire region, similar to how he believ
es the leadership of Japan and Germany have had significant impact on the Asian and European regions, respectively. While the Middle East continues to experience significant challenges, particularly in the areas of population growth, under-developed education systems, limited freedoms for women, and general economic frustration – Kirdar is convinced that a successful Iraq would pave the road to success for the entire region. In response to a question from the audience regarding the effect of fundamentalism and a potential back-lash against the U.S., Kirdar responded by stating that when an individual is treated well and can enjoy such simple economic privileges as having a job, sending one’s children to school and going on vacation, fundamentalism has a tendency to disappear. Extreme nationalism he believes is the result of diminished economic opportunity and personal liberty. If Iraq can participate in the global economy and society, Kirdar suggested fundamentalism will subside and the Iraqi people will have the opportunity to build a sustainable future for their country and live lives of peace and prosperity.

The months and years ahead will tell the final story, but for the sake of global peace and stability, I certainly hope that Kirdar’s dreams for Iraq, the Middle East and the world are realized.

April 14, 2003
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