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ECONOMY-IRAQ: At Least Some Will Welcome War
By Ferry Biedermann
BAGHDAD, Feb 18 (IPS) - An engineer in suit and tie smiles as he looks at the
share prices at the booming stock exchange in Baghdad.
"If I went to work as engineer I wouldn't make as much money as I can
here," he says.
"We have had gains of some 5 per cent across the board," says stockbroker
Hekmat Al-Tamimi. He has been with the Baghdad bourse since it opened in
1992. And these are good days at the exchange.
Share prices jotted down in different colours on white boards at the
somewhat improvised exchange have risen as war seems to draw near. Players on
the stock market are reckoning on war, and on an improved economy afterwards.
But most of the listed companies are partly privatised government
conglomerates. Their real value is uncertain at the best of times.
Economist Hummam Al-Shamaa at Baghdad University says the rising
investment has more to do with the mind than the market. He thinks it would
be foolish to bet on a war and what it might bring. "Nobody can predict the
scenarios in a war, if there is going to be one," he says. Unlike the
optimistic investors he sees little chance of rapid economic development
after a war.
Iraqi business may not think war is great, but some are beginning to look
on it as one way of release from sanctions imposed by the UN (United Nations)
after the Gulf War. Tightening sanctions are beginning to choke Iraqi economy
once again.
There had been some improvement in the past year. Many neighbouring
countries had begun at least partly to ignore the UN. Western companies began
to ship their goods to these countries for repackaging before they found
their way to Iraq.
That has stopped since the UN Security Council passed resolution 1441. The
last couple of months have again been hard on the Iraqi economy.
One businessman says plainly that it may take war to end the sanctions. "A
war will not last more than a couple of months, then we can start
rebuilding," he says.
The businessman, who has large financial interests in the country, is not
alone in wanting the sanctions lifted somehow. By now almost anything seems
better than more of the same.
Al-Shamaa warns of "catastrophe for the whole of humanity" if sanctions
continue. They will turn Iraq into a "ticking bomb" that could scatter
violence around the world because of its growing social ills, he says.
The strain is showing among ordinary families. Essar Ibrahim, 25, who
works with an "import-export" company says she has lost an important part of
life. Essar had wanted to study English abroad and become a teacher. "But I
have only known sanctions," she says.
The Ibrahim family live in a block of concrete flats near government
ministry offices. Her father Harith has a low-paid job at the Ministry of
Trade. Government salaries were decent until 1991, and the area is still
considered 'upper-middle class'. But the flats now look dilapidated, and the
effects of sanctions can be seen within as well.
The living room is bare. Harith, 55, sits in his pyjamas on a couch and
talks of life after 1991. "We had to sell the car, the jewels, even some
furniture and works of art," he says. "I sold so much, and we used up
everything. Now if there is a war we have nothing left to help us survive."
Harith last travelled abroad in 1975. By the early eighties the economy
was already beginning to collapse. "The Iran-Iraq war swallowed everything
from 1980," he says. "It was eight long years, with a lot of blood and
destruction."
Still, the Ibrahims are relatively well off. In some areas sewage is
backing up into the streets. Some schools have no windows, no textbooks, not
even chairs for children to sit on.
The worst of the humanitarian crisis was supposed to be alleviated by the
UN oil for food programme introduced in 1995. Iraq was allowed under tight
control to export oil and buy humanitarian items in return.
The programme really got going only by March 1997, but it did not erase
the effect of sanctions. Two executives who administered the programme
resigned in protest against the fallout on Iraqi civilians.
By now the government's food distribution system is seen as something of a
triumph. But it has become an instrument of government control over the
people, and it allows the Iraqi government to spend money that it earns
outside the programme more freely.
The new liquidity last year had just begun to get business moving, says
Iraqi industrialist Faris Al-Hadi in his modest office downtown. El-Hadi
hands a small bag of 'Sindbad' roasted peanuts across his desk. "These are
from the first batch, we started again last month," he says. Many industries
resumed production after a decade of stillness.
The government had more cash to help industrialists because it had to
spend less on basic needs, El-Hadi says. That was largely due to the oil for
food programme.
But there could be other reasons for the increased liquidity. The
government raised more revenue through taxation because sanctions began to
crumble, says Ghanem Saleh, political scientist at Baghdad University. "If
it were not for this crisis they would have continued crumbling, and after it
they will crumble again," he says.
There is more liquidity apparent in government spending than among people.
El-Hadi has a permit to import the Korean Samsung brand into the country.
"But people are not buying home appliances," he says. "They prefer to stick
to essentials and to keep their money in dollars."
The Iraqi currency has lost ground again after being decimated in the
early nineties. "I certainly don't want to keep my money in Iraqi Dinars,"
says an elderly investor. Iraqis are looking at dollars - or shares. And they
are looking at what war might bring. (END/2003)
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