BAGHDAD, 13 March 2004 — Iraq’s economy is showing signs of life one year after the US-led invasion began, but still has much to overcome decades of inefficiency under Saddam Hussein and 13 years of international sanctions.
The occupying forces hope money from Iraq’s oil-rich resources and the fruits of reconstruction efforts will boost economic activity and create new jobs.
The International Monetary Fund said last year that the unemployment rate in Iraq was 60 percent, but according to recent studies quoted by the US-led coalition the ratio of people out of work has fallen to 25 percent.
The United States aims to create 50,000 jobs across the war-battered country by July through more than 2,300 projects aimed at rehabilitating Iraq’s electricity, water, oil, health and transport infrastructure.
A number of major contracts have already been awarded to companies from countries that supported the war effort.
On Wednesday, the Pentagon dished out seven contracts worth more than $120 million to support Coalition Provisional Authority (CPA) offices that will manage the reconstruction drive. At the start of the week three Iraqi firms, two Polish companies and one from the United Arab Emirates were also given a piece of the action.
Congress has earmarked $18.4 billion for reconstruction in Iraq, more than a third of the $55 billion the World Bank estimates will be necessary to get the war-torn country back on its feet.
The US money is destined for 2,363 projects and was unveiled with much fanfare by Washington in October, but Iraqis say it has had little real impact as unemployment remains high and living standards low.
But US officials say the cash will boost Iraq’s non-oil related gross domestic product to more than $13 billion compared with an estimated $10 billion after the fall of Saddam Hussein’s regime in April 2003.
The Ministry of Oil has said that it hopes to achieve pre-war oil levels of 2.8 million barrels per day by the end of March, despite persistent acts of sabotage on oil pipelines in the north of the country.
Most of the money flowing back into the Finance Ministry comes from oil sales and is channeled into the Iraqi Development Fund to help rebuild the war-torn country. Despite deep poverty among the people, consumption in Iraq has boomed since Saddam was ousted from power.
Since Iraq’s borders opened to the rest of the world, a flood of consumer electronics goods at an affordable price has hit the market enabling people to buy televisions, satellite dishes, mobile phones and new washing machines.
The streets of Baghdad are lined with advertisement boards — a sign of an emerging wave of capitalism boosted by more liberal supply and demand.
Another indication of fresh economic growth is the rise in activity in the southern port of Oum Qasr, Iraq’s only passage to the sea. Foreign investors appear keen to get a piece of the action despite the obviously risks of violence.
The value of the Iraqi dinar against the dollar, which plummetted during the former dictator’s time, has also started to rebound.
