Iraq's economy is growing strong, even booming in places

[CatWoman]

Blood and Money
In what might be called the mother of all surprises, Iraq's economy is growing strong, even booming in places.

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.


http://www.msnbc.msn.com/id/16241340/site/newsweek/

[Ezlivin]

1. I'm damned sure that it's "booming" all right

But not quite in the way that the author intended.

[bluerum]

2. I'll buy that. Hey - BTW where is that bridge you sold me? nt

[aquart]

3. Celebrating the glories of war profiteering.

How nice.

[leftofthedial]

4. and our economy is booming too!

those bushies and repukes are just miracle workers!

I wish I had a job so I could afford pen and paper and a stamp to write them a letter.

[The Deacon]

5. Sounds Like A Tulip Market To Me

The second the money stops flowing in from outside sources (which amounts to charity) the whole thing will go tits-up. There is only one thing which can sustain economic growth - jobs. As long as unemployment runs between 30 and 50 percent there is no economy - simply money changing hands.

[shain from kane]

6. Iraqi merchant: "Coffinmaking has been very, very good to me."

[OwnedByFerrets]

7. Maybe Amerika needs to be occupied by

a conquering country (china) so we can be deluged with billions to prop up OUR economy.

[mattclearing]

8. Funny, I thought hospitals, highways, and power plants were first on the agenda.

I guess that was before we invaded.