The US is mulling a trade finance facility for Iraq to help import goods such as freezers and chickens, and several banks are interested in participating.
Speaking to reporters after returning from a trip to the Middle East, Treasury Undersecretary for International Affairs John Taylor said US banks might also be able to help set up a working payments system in the country.
“We would like to facilitate trade by setting up some kind of a credit facility and there’s a number of financial institutions that have expressed interest to us about this,” Taylor said.
He said Brazilian companies are selling frozen chickens in Iraq with people paying in cash for them at the border.
“That’s a very arcane way to finance trade,” he said.
But before foreign investment can take place in Iraq , there must be a law describing how transactions take place.
“The law that pertains to foreign investment is being developed,” he said.
Speaking earlier on CNBC, Taylor said while local banks are starting to open branches there is still major credit facility for foreign purchase.
That situation provides “an important opportunity for US banks” and for other foreign banks to do business in Iraq , Taylor said.
Earlier, Taylor was in New York on to participate in an organisational meeting of donors for Iraqi reconstruction in preparation for a full donor meeting expected to be held at the end of September or early October. Taylor said the location of that meeting has not yet been decided.
He said by then, the World Bank will have finished its assessment of how much it will cost to rebuild Iraq’s economy.
Some 30 to 40 countries are involved in discussions about being potential donors, he said but did not say how much donor nations might provide.
Asked about Iraq ‘s debt, he said the total amount has yet to be determined.
“It’s a terrific debt,” he said. “It’s large … We don’t know exactly how much, so we are getting data on exactly what it is.”