Impoverished Iraq attracts exporters of the region, save for Lebanon

Poverty added to Iraqis’ bitterness of lack of security

IRBIL, Iraq - Naji Issa

December 2003

Opening markets here and flooding it with untaxed merchandise gave a bigger variety and more choice to Iraqi consumers. However, it created a sense of psychological poverty which was added to the lack of security.

People here see a wide choice of dollar-priced products they cannot afford.

Some Iraqi areas even witnessed price inflations caused by foreign NGOs and military bases renting properties at triple the market’s prices, purchasing equipment and paying high wages to their local staff.

The fluctuating exchange rates of the Iraqi Dinar against the US dollar and the printing of big amounts of new dinars added further insult to injury.

Imported goods are being priced in dollars, and the prices sometimes are comparable to the region’s market, with the difference that the purchasing power for the Iraqi citizen is not comparable.

Meanwhile, neighboring countries benefit from exporting somewhat affordable products to Iraq. These include Jordan which sends food products and Dubai which exports to the Iraqi market accessories and electronics.

The cars’ market is also flourishing especially with mid-nineties second-hand cars shipped from Dubai and Jordan, and the huge fleets of Toyota Land Cruiser, Toyota Avalon and Nissan Cedric that were looted from the former regime’s ministries and institutions.

It is worth mentioning, however, that all the talk in Lebanon by Prime Minister Rafik Hariri’s “chorus” about the traditional role of Lebanon as a trade hub, and the Lebanese sense of business and entrepreneurship are obviously seen, here, as void promises.

The only Lebanese products found here is expired cans of Pepsi Cola and books that were published in Beirut in the early 1980s. Other products here are almost purely imported from Jordan and Dubai, and to a lesser extent Iran and Syria. This certainly should make the Lebanese examine the role of their country as a trade hub in the region.

Another factor which increases poverty in Iraq is unemployment.

The public sector, being the safety gauge unemployment in developing countries, used to employ large portions of the Iraqi population. The current de-Baathification plan undertaken by the occupation authorities sent most of the former regime’s employees home. This therefore contributed to increasing the unemployment rate, especially that the majority of the abolished positions in the state bureaucracy have not yet been replaced by new ones, as in the case of the army.

No one here, however, takes the responsibility to be blamed. While the former regime is busy sabotaging oil pipelines, the Interim Governing Council is busy proving its legitimacy and establishing its sovereignty.

Meanwhile, the occupation authorities have their hands occupied with security priorities at the time the United Nations ended its years of sanctions on the country and prepares to leave the nation living in turbulence.

The result is the lack of socio-economic development and a market left open to pure competition for the bits and pieces while contracts with big fat cheques have been already awarded to US companies.