Remember all those stories about how American companies would cash in on the rebuilding of Kuwait? Hold the checkbook. So far, many company officials who rushed to Kuwait-lured by giddy visions of a $100 billion honey pot-are spending more time pounding the pavement than landing big contracts. Their frustration has deepened as they’ve listened to Kuwaiti officials mouth words of gratitude and promises of big contracts for U.S. firms. “It’s been a very vexing situation for American companies,” says David Gump, executive editor of the Gulf Reconstruction Report, an Arlington, Va., newsletter.
What happened to the Kuwaiti gold rush? For starters, the original estimate of $100 billion in contracts was clearly an exaggeration. In recent weeks the projection has been slashed to about $15 billion. Then there’s the labor shortage in Kuwait. Many of the government employees who evaluate and process potential contracts have not returned to their jobs, and some never will.
Many companies, even those with Middle East experience, are bedeviled by Kuwaiti way of doing business. Officials keep a tight hold on decisions, and, says Gump, “they can’t seem to shake their tradition of driving the hardest bargain possible.” Even after Americans think they have a done deal, officials sometimes reopen negotiations. Slade’s Maritime Offshore Employment, based in New Orleans, has been trying for weeks to get Kuwait to sign a contract for a ship-based communication and power center. Says owner Jerome Slade, “You’re told one thing, someone else is telling you another, they’re so conflicting that you don’t know where to go.”
The U.S. Commerce Department says that shellshocked Kuwait is doing all it can. And some U.S. companies have done quite well, notably big construction and engineering outfits with gulf know-how, like Brown & Root, Inc., of Houston, and firms that specialize in capping burning oil wells. The less fortunate companies might borrow a page from Waste Management, Inc., of Oak Brook, Ill. It simply sailed into Kuwait with a fleet of garbage trucks and started picking up the trash. The firm decided it would negotiate a deal later-and was rewarded with a month-to-month contract, worth about $12 million.
Perils or not, many companies think the golden goose remains alive and well in Kuwait. In Louisiana last week, several hundred business owners met under the Cajundome in Lafayette to figure out how to make the most of opportunities in Kuwait. Their solution: they formed an organization, called the Louisiana-Kuwait Coalition, and hired a well-connected lobbyist, Hamed Al Naqeeb, who comes from an old Kuwaiti merchant family. For helping steer companies through the Kuwaiti labyrinth, Al Naqeeb will get up to 10 percent of any contracts signed. What’s more American-or Middle Eastern-than that?
