Iran-Iraq War: Seizing business opportunities in Kuwait

The Iran-Iraq war, which lasted from September 1980 to August 1988, provided great business opportunities in Kuwait. There was no dearth of items and they had the leeway to even supply 5% to 7% more than the indented quantity. This is the ninth part of the series describing the unknown triumphs and travails of doing international business in Asia in the seventies and eighties

The Dubai business community and people in general, do not take sides on political issues, and I suppose this is due to their exclusive concentration on business. In fact, even before this border skirmish became a full-fledged war the merchants on both sides were ‘sensing’ the trouble ahead and truck loads of goods were already moving towards the Kuwaiti border. As for Iran, the good old dhows operated at great speed and merchants of Iranian origin were mopping up the goods at regular intervals, as and when they had the opportunity. Physical delivery and price were the criterion for sales.

In fact, there was a time, not much earlier, when Iranian importers were allowed to get the goods into the country, as long as foreign exchange for payment was not asked for overseas remittance.  How the system exactly operated, I do not know, but as long as the merchant paid us the cash for each purchase, we could not care less, and we did our best to deliver the goods, even at small margins, and banked on the post-dated cheques that we had issued for supplies, which, anyway, was the practice.

The supplies to Iran, on this basis, much prior to the war scene, was going on for quite some time, and I was too busy with my trips to even know about them. More and more, my time was spent on handling Kajeco products. In fact one evening, I had the urgent request to stop all my work and jump into a van that was going to Al Ain, bordering the Sultanate of Oman. In fact, one has to cross, overland, the Omanese strip of land before reaching Al Ain, which formed part of UAE. I readily agreed, and almost all the staff license holders drove various new vehicles to the jetty, for onward delivery to an Iranian client, for transhipment to Iran.

We had an excellent contact in Kuwait, whose associate company was also the agent for Kajeco products, but who was one of those active merchants supplying various goods to Iraq. We had intimation from a French contractor, if I recall, Dumex by name, who had some trouble with our supplies, and they wanted the manufacturer's representatives to visit them at the site in Kirkuk, some 700 km or so from Basra.

From time to time, we had been receiving various indents for great many of the items, of which we had hardly any knowledge; but all that we did was to locate the item, slapped a 10% profit, and quoted the price for delivery on their truck. The order would be confirmed, practically immediately, and our procurement and collection would follow. There was no dearth of items and we had the leeway to even supply 5% to 7% more than the indented quantity.

This sort of profitable business was fun, as long as it lasted. 

As I sat pondering over the complaint from Dumex, I got the confirmation that Vijay would be joining me on the trip in a day, and asked me to arrange the Kuwaiti visa. Our Kuwait contact, ably handled by Stephen, a Lebanese friend, had already submitted the relevant documents for “land entry permits” for us to travel into Iraq.

In those days, hotel accommodation was almost impossible. So, when we landed in Kuwait, Stephen not only collected us, but took us to his home, where we stayed for a couple of days, before embarking on an arduous journey, overland to Iraq. Kuwait was not as liberal as the UAE in issuing liquor permits, but did not strictly enforce this practice—if anyone had carried a bottle or two, as long as he was not a national or Muslim.  Stephen, being a Christian had his own little stock, and enjoyed Scotch, as much as he did the Lebanese Aarak.

We had to be physically present for getting the permits, but once this formality was over, we relaxed at home, thanks to Mrs Stephen’s hospitality, a Lebanese trait, while Stephen was getting organized for our overland trip, which would last a good 12 days,

The Iran-Iraq war had intensified, and Iranian Air Force had a clear advantage as they bombarded Basra. We were to commence our travel in the afternoon, arrive at Safat border and then proceed to Basra, stay overnight, for which, luckily Stephen had arranged for hotel accommodation, where they normally stayed before their onward journey which they usually started much before day break, every time they went.  

We had a wonderful Lebanese dinner and Vijay the vegetarian had no problem, and we slept comfortably, knowing that, in the next ten days or more, we would have to do away with such luxury.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts. From being the advisor to exporters, he took over the mantle of a trader, travelled far and wide, and switched over to setting up garment factories and then worked in the US. He can be contacted at [email protected].)

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p k
1 decade ago
I worked i are a lot iof 2009-2011..

i must say not a very good experience.

there are a lot of Indian Sindhi companies , who sqezze the Indian labour max..

wheather it is bhatia or any other company, owner is concerned about his margin..he doesn't care what you sell- grocery items for the ship chandy ubn or goats.. very unprofessional.

if they have such management in India today in 2012, they have to close the company within no time!!

it can work in Gulf only, where the passport 9s held by com, is difficult to get to get good quality persons due to India opportinities alkso.

Prof S Ganesan
1 decade ago
The series of articles by A.K. Ramdas is very educative, highly useful and informative. I wish that as many young readers come to know about these valuable articles in Moneylife. The author nicely brings out the challenges and opportunities in the arab world in doing business successfully.
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