Tuesday, December 26, 2006

And The Bad News Is?

If someone listens to the MSM as the sole source for all information on the middle east, there is but one one viewpoint given: Iraq is an unholy mess, get out, run away. But there are other measures of change, some of them fairly promising. This is one of them from Amir Taheiri of the NY Post:
WHILE the American political elite is using Iraq as an excuse for fighting internal political wars, a different reality is taking shape in parts of this war-torn nation. Wherever some measure of security is assured - that is to say in more than 80 percent of Iraq - towns and villages long left to die a slow death are creeping back to life.
Some are doing more than creeping. Things are booming in much of Iraq and it's not from IED's.
Nowhere is this slow but steady return to life more startling than in Um Qasr, in the southeast extremity of Iraq on the Persian Gulf. Four years ago, this was a jumble of rusting quays, abandoned houses and gutted buildings. By the spring of 2003, its population had dwindled to a few dozen, along with hundreds of stray dogs. There was even talk of abandoning it altogether.
This is the same talk in Democratic circles. The Iraqi's aren't buying it though, and perhaps we should be listening to them rather than the likes of Pelosi.

Today, however, Um Qasr is back in business as a port with commercial and military functions. Hundreds of families that had left after the first Gulf War in 1991 have returned - joining many more who have come from all over Iraq.

The boom in Um Qasr is part of a broader picture that also includes Basra (the sprawling metropolis of southern Iraq), the Shi'ite "holy" cities of Najaf and karbala, Mandali on the Iranian border and much of Baghdad.

You didn't see many new hotels springing up in Berlin in March of 1945. Investors are not idiots. They are not going to invest a lot of money in ventures that are bound to fail in a war zone, so why is this economic activity occuring at all?
Newsweek has just hailed the emergence of a booming market economy in Iraq as "the mother of all surprises," noting that "Iraqis are more optimistic about the future than most Americans are." The reason, of course, is that Iraqis know what is going on in their country while Americans are fed a diet of exclusively negative
reporting from Iraq.
Just how much growth is being experienced in Iraqi market segments?
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.
That is a 407% increase in just two years. Of course everything is not coming up roses in Iraq. Unemployment is about 30% in a country that is in the midst of an alleged civil war. But 30% is the average unemployment rate for the 3 billion workers for the entire planet!

What are the comparative unemployment rates in other countries, many of which are not plagued by daily bombings, kidnapping and murders? Take a look here.

Zimbabwe (unrest) - 85%
Liberia (unrest) - 85%
Zambia (no war) - 50%
East Timor (unrest) - 50%
Djibouti (no war) - 50%
Lesotho (recent unrest) - 45%
Turkmenistan (no war) - 45%
Bosnia/Herzegovina (recent war) - 45%
Nepal (no war) - 42%
Swaziland (no war) - 40%
Afghanistan (unrest) - 40%
Libya (no war)- 40%
Kenya (no war) - 40%
Macedonia (no war)- 37%
Yemen (no war) - 35%
Armenia (no war) - 32%
Gaza Strip (crazy idiots) - 31%
Serbia (recent war)- 31%
American Samoa (Hey, it belongs to us!) -30%
Cameroon (no war) - 30%
(I left out many small island nations such as Nauru with less than 20,000 pop. and an unemployment rate of 90%).

And these countries are just those with an unemployment rate of 30% and higher. Sometimes all you need are corrupt government officials to mess things up. And on top of everything else, that is exactly what Iraq is also recovering from - 30 years of Saddam's corrupt choke hold on the Iraqi economy.

But a good part of the boom is due to an unexpected flow of foreign
capital. This has been facilitated by the prospect of a liberal law on direct foreign investments, which exists only in such free-trade parts of the region as Dubai and Bahrain. None of Iraq's six neighbors offers such guarantee for the free flow of capital to and from the country.

Since the fall of Saddam Hussein in 2003, the number of private companies in Iraq has increased from a mere 8,000 to more than 35,000 this year. Each week an average of 60 new companies spring up in Iraq's booming areas. A good part of the investment in southern Iraq, including in Um Qasr, comes from Kuwait and the
United Arab Emirates.

Iraq's neighbors are pouring investment capital into this country. What does that tell us? It appears that these countries do not read the Times or listen to the democrats.

"Whatever happens, Iraq is Iraq," says a Kuwaiti businessman, building hotels in the south. "Iraq will always remain the country with the world's largest oil reserves and the Middle East's biggest resources of water."

One hears similar comments from local and foreign businessmen investing in real estate in Najaf and Karbala. Over 200 million Shiite Muslims regard the cities as holy. Najaf and Karbala have always been dream destinations for pilgrims. Under Saddam Hussein, however, few foreign pilgrims were allowed. With the despot gone, pilgrims are pouring in - and with them the fresh money.

That good business is possible in Iraq is reflected in the performance of new companies, most of which did not exist three years ago. One privately owned mobile phone company is expected to report revenues of more than $500 million this year, a sevenfold increase in three years. Another private firm marketing soft drinks has seen profits double since the end of 2003. The number of luxury cars imported has risen from a few hundred in 2002 to more than 20,000 this year.

Conditions certainly are harsh in Iraq, but that is true of many other places in the world. With a stable, secular government and the end of bloody interference by other nations, Iraq could become the economic powerhouse of the Middle East. And perhaps this is what the White House was trying to accomplish. With everyone in DC appearing to go all wobbly I somehow doubt this will come to pass.

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