by Ferry Biedermann
(IPS) BAGHDAD --
well-dressed engineer smiles as he looks at the share prices at the booming stock exchange in Baghdad.
"If I worked as engineer, I wouldn't make as much money as I can here," he says.
"We have had gains of some 5 percent 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 colors 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 after the ouster of Saddam Hussein.
But most of the listed companies are partly privatized 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 businessman 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 after the Gulf War of 1991. Tightening sanctions are beginning to choke the Iraqi economy once again.
There had been some improvement in the past year. Many neighboring 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 her 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, Harit, 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 pajamas 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 1980s 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 of the city 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 effect on Iraqi civilians.
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 Korean Samsung appliances 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 1990s.
"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.
February 18, 2003 (http://www.albionmonitor.net) All Rights Reserved. Contact email@example.com for permission to use in any format.
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