"Tim Crowley" <timmyturmoil@gmail.com> wrote in message
news:1166887007.997949.197090@73g2000cwn.googlegroups.com...
no_surrender@never.net wrote:
SUGGESTED READING FOR CONSERVATIVES, REQUIRED FOR WEE, TWEE, QUAINT, AND
FEY
LIBS (NO BETTER ADJECTIVES...EVER)
COMMENTARY FROM WORLD NET DAILY
snicker. hint: World Net is a propaganda arm and you have been used,
again.
Try Newsweek Online, Timmy:
Blood and Money
In what might be called the mother of all surprises, Iraq's economy is
growing strong, even booming in places.
By Silvia Spring
Newsweek International
Dec. 25, 2006 - Jan. 1, 2007 issue - It may sound unreal, given the daily
images of carnage and chaos. But for a certain plucky breed of businessmen,
there's good money to be made in Iraq. Consider Iraqna, the leading
mobile-phone company. For sure, its quarterly reports seldom make for dull
reading. Despite employees kidnapped, cell-phone towers bombed, storefronts
shot up and a huge security budget-up to four guards for each employee-the
company posted revenues of $333 million in 2005. This year, it's on track to
take in $520 million. The U.S. State Department reports that there are now
7.1 million mobile-phone subscribers in Iraq, up from just 1.4 million two
years ago. Says Wael Ziada, an analyst in Cairo who tracks Iraqna: "There
will always be pockets of money and wealth, no matter how bad the situation
gets."
Civil war or not, Iraq has an economy, and-mother of all surprises-it's
doing remarkably well. Real estate is booming. Construction, retail and
wholesale trade sectors are healthy, too, according to a report by Global
Insight in London. The U.S. Chamber of Commerce reports 34,000 registered
companies in Iraq, up from 8,000 three years ago. Sales of secondhand cars,
televisions and mobile phones have all risen sharply. Estimates vary, but
one from Global Insight puts GDP growth at 17 percent last year and projects
13 percent for 2006. The World Bank has it lower: at 4 percent this year.
But, given all the attention paid to deteriorating security, the startling
fact is that Iraq is growing at all.
How? Iraq is a crippled nation growing on the financial equivalent of
steroids, with money pouring in from abroad. National oil revenues and
foreign grants look set to total $41 billion this year, according to the
IMF. With security improving in one key spot-the southern oilfields-that
figure could go up.
Not too shabby, all things considered. Yes, Iraq's problems are daunting, to
say the least. Unemployment runs between 30 and 50 percent. Many former
state industries have all but ceased to function. As for all that money
flowing in, much of it has gone to things that do little to advance the
country's future. Security, for instance, gobbles up as much as a third of
most companies' operating budgets, whereas what Iraq really needs are
hospitals, highways and power-generating plants.
Even so, there's a vibrancy at the grass roots that is invisible in most
international coverage of Iraq. Partly it's the trickle-down effect. However
it's spent, whether on security or something else, money circulates. Nor are
ordinary Iraqis themselves short on cash. After so many years of living
under sanctions, with little to consume, many built up considerable nest
eggs-which they are now spending. That's boosted economic activity,
particularly in retail. Imported goods have grown increasingly affordable,
thanks to the elimination of tariffs and trade barriers. Salaries have gone
up more than 100 percent since the fall of Saddam, and income-tax cuts (from
45 percent to just 15 percent) have put more cash in Iraqi pockets. "The
U.S. wanted to create the conditions in which small-scale private enterprise
could blossom," says Jan Randolph, head of sovereign risk at Global Insight.
"In a sense, they've succeeded."
Consider some less formal indicators. Perhaps the most pervasive is the
horrendous Iraqi traffic jams. Roadside bombs account for fewer backups than
the sheer number of secondhand cars that have crowded onto the nation's
roads-five times as many in Baghdad as before the war. Cheap Chinese goods
overflow from shop shelves, and store owners report quick turnover.
Real-estate prices have risen several hundred percent, suggesting that
Iraqis are more optimistic about the future than most Americans are.
There's even a positive spin to be put on corruption. Money stolen from
government coffers or siphoned from U.S. aid projects does not just
disappear. Again, says Farid Abolfathi, a Global Insight analyst, it's the
"trickledown" effect. Such "underground activity" is the most dynamic part
of Iraq's economy, he says. "It might not be viewed as respectable. But in
reality, that's what puts money in the hands of the little people."
Meanwhile, Iraq's official economic institutions are making progress,
improbable as that might sound in the context of savage sectarian violence
and a seemingly complete breakdown of leadership and law. Yet it's a fact. A
government often accused of being no government at all has somehow managed
to take its first steps to liberalize the highly centralized economy of the
Saddam era. Iraq has a debt-relief deal with the IMF that requires Baghdad
to end subsidies and open up its gas-import market. Earlier this year the
government made the first hesitant steps, axing fuel subsidies-and sending
prices from a few cents a liter to around 14. "This has become one important
way of institutionally engaging with Iraq," says economist Colin Rowat at
the University of Birmingham. "If you lose that engagement, then that means
a lot more people have given up on Iraq."
It goes without saying: real progress won't be seen until the security
situation clears up. Iraq still lacks a functioning banking system. Though
there's an increasing awareness of Iraq as a potential emerging market,
foreign investors won't make serious commitments until they are assured a
measure of stability. Local moneymen are scarcely more bullish on the long
term. In Iraq's nascent bond market, buyers have so far been willing to
invest in local-currency Treasury bills with terms up to six months, max.
Iraqna isn't the only success story. There is also Nipal, a money-transfer
service that is the backbone of Iraq's cash economy, as well as a slew of
successful construction firms in Kurdistan. Such companies are not waiting
for Iraq's political crisis to resolve itself. Yet imagine how they would
prosper if it did, and how quickly they would be joined by others. As things
stand, Iraqna faces extraordinary difficulties. It builds towers but lives
in constant fear that they will be blown up. It has to be careful about whom
it hires, or where it assigns people to work. Whether Sunni or Shia, it
doesn't matter; criminal gangs and militias regularly try to kidnap
employees to hold them hostage for ransom, regardless of ethnicity. As for
long-range planning? Forget it, says Ziada, the Cairo analyst. "It's a
terrible situation for any company."
But again, that's the remarkable thing. In a business climate that is
inhospitable, to say the least, companies like Iraqna are thriving. The
withdrawal of a certain great power could drastically reduce the foreign
money flow, and knock the crippled economy flat.
With Michael Hastings in Baghdad
http://www.msnbc.msn.com/id/16241340/site/newsweek/
Now, Timmy, I know this didn't appear in the Daily Worker or the Gay Blade
Personals, and you're clearly no expert on what's going on in Iraq - but DO
try to keep up with the grownups if you insist on participating around here,
OK? :O|
.
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