Plans to tackle Iraq’s long-term problems after the fall of Saddam Hussein face many serious obstacles — but few are as troubling as a lack of basic economic and social data about the country, experts and officials say.
As the US and Britain begin the mammoth task of reconstruction amid squabbling about how post-Baathist Iraq will be governed, concern is mounting over incomplete information about some fundamental questions.
With fighting entering its final stages and the focus shifting to restoring law and order, the military and intelligence services are patting themselves on the back for knowing enough to fight a successful war. But in other areas, Iraq remains a mystery.
“Iraq is a black box because of the secretive nature of the regime,” says the Israeli scholar Amatzia Baram. An American official calls the country’s vital oil revenues a “black hole”, and a British government economist complains of a “huge quantitative vacuum”. Institutions that normally pride themselves on supplying precise answers admit they are stumped, and at odds with each other. James Wolfensohn, president of the World Bank, was asked this week how much cash would be needed to rebuild Iraq. “I don’t have the slightest idea,” he answered bluntly. “It’s pretty hard to come to an assessment as to what is needed.”
The economy section of the CIA’s factbook on Iraq contains more “not available” entries than any other country, with the possible exception of North Korea. “Per capita output and living standards are still well below the prewar level,” it notes, “but any estimates have a wide range of error.” No figures are available for mobile phone usage, except in Kurdistan in the north of the country.
It gets worse. The IMF has not set foot in Baghdad since 1983. Without international loans, the government has not had to submit any reports on its finances. Less may be known about employment, industrial output, inflation, budgetary policy and wages and prices than about the Republican Guard or chemical weapons.
In the 70s boom years the Baathist government enjoyed a solid reputation. It ruled a developing country, but one with huge oil wealth and a workforce who benefited from steady investment in health and education. Baghdad hotels that played host to businessmen from around the world.
The clock stopped in 1980 when Saddam launched his disastrous eight-year war against Ayatollah Khomeini’s Iran. An already secretive regime closed in on itself as more and more resources were pumped into defense and security.
The UN sanctions imposed after the invasion of Kuwait in 1990 blurred the picture further by encouraging a shadowy parallel economy in which a cosseted elite enjoyed dollar incomes from smuggled oil while the middle classes, especially in the large state sector, were crushed by shrinking salaries and dinar inflation.
Investment in public services dried up, with what little there was going to Baghdad, deepening the impoverishment and resentment of the Shiite majority.
The rationing system put in place under the UN’s oil for food program has played havoc with basic statistics figures, since deaths often go unreported. “You were allowed to do a sample survey in one place but never more broadly,” says a Western sociologist. No traditional household health surveys were carried out between 1991 and 1998 except by the government, and few trust its findings. Poverty and health issues became part of the propaganda battleground over sanctions. “Data on Iraq is not usually very good and very difficult to get hold of,” says Colin Rowat, a Birmingham University economist. “It’s a direct function of dictatorship and being on a war footing for 23 years.”
Another crucial unanswered question is the size of the country’s external debt, which will have to be dealt with once sanctions are lifted. Protecting the records was one reason the US Treasury lobbied the Pentagon to exclude the Bank of Iraq from its target lists. Estimates of the debt range from $60 billion-$200 billion. With the subject already on the agenda for a G-7 finance ministers’ meeting in Washington this weekend, this is no mere detail.
Accurate figures will depend on whether the total includes loans to Saddam made by the Gulf countries he intimidated during the war against Iran, or subsequent reparations claims from Tehran. But once the size is agreed, the real issue will be how it is going to be managed.
Oil — source of 95 percent of Iraq’s foreign currency earnings — is a far better known subject, but there, too, different US government agencies use different figures for the reserves.
The question is crucial since oil income will determine the extent to which the international community will have to finance reconstruction and how much Iraq will need to rely on investment from foreign oil companies.
Efforts are already being made by the US and Britain to persuade civil servants to return to work, and Iraqi exiles with government experience are being asked to help fill information gaps.
Yet worries about data may be exaggerated. “We’re not talking about fine-tuning an economy but saving it from collapse,” Dr. Rowat says.
“It would be nice to have some baseline figures so we can say in a year’s time how far we have come,” argues an official working on postwar planning, “but it won’t necessarily hamper the process.”
Uncertainty about facts and figures is matched by blinding clarity about the daunting scale of the challenge ahead, compared by some to the transformation of the Russian economy after the collapse of communism.
“Iraq is rich in oil and human resources and talent, so there is an upside if you can hang in there,” says an economist. “But the first 12-24 months are going to be very tough.”
Arab News Opinion 13 April 2003
