Is Iraq's Economy Taking Off?
Dave Price
Gatewaypundit has the Haider Ajina translation of PM Maliki's statements as reported in an Iraqi newspaper:
On the economic front we have much to be proud of, unemployment has declined from 50% to 20% and inflation has gone down from 60% to 16%, these are tremendous achievements.Great news, if true, though we don't know the source or reliability of these numbers. It seems fairly safe to assume the economic picture is, at least, getting better rather than worse, which may help explain why the violence is falling. Those two trends are synergistic, creating a positive feedback loop: more available work means fewer young men joining militias or taking $100 to plant IEDs, falling violence (via Glenn, Dean Barnett notes both Iraqi civilian casualties and coalition deaths continued to decline in October following September's precipitous drop) means more markets and businesses can open.
Time, meanwhile, takes the Decapigate Part Deux false report of 20 headless bodies and runs with it, making that tidbit of faux news the centerpiece of a story on why the surge has "reached its limits" and is going to fail. Watch closely, folks, this is how memes are born and demonstrates why media bias and laziness matter.
The horrible discovery in Diyala province Monday was disturbing even by the standards of Iraq's running sectarian violence. Iraqi police said they found 20 decapitated bodies dumped near a police station west of Baquba, the capital of Diyala province.Oops! Never mind. It's just another Emily Litella moment for the MSM.
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The prognosis for Iraq, barring a dynamic transformation on the part of the Iraqi government very soon, is grimly apparent. As U.S. forces lessen their presence in the coming months, killings of the kind seen Monday in Diyala will persist there and most likely spread to areas calmed by the increase of U.S. forces.
UPDATE: It's probably also worth noting Iraq's electricity production and oil revenue are, according to the Iraq Index, at all-time highs.
Ryan
Running with the loveable-loser come-from-behind storyline we talked about earlier, the bosox's winning strategy was "one out at a time, one inning at a time, one game at a time," and I think you could definitely come up with a worse view for progress in Iraq.
Ryan
there's an article I remember reading arguing that too much economic protection, job protection, welfare, etc. can produce such a risk-averse marketplace that economies stagnate (viz. france).
Ryan
Shorter even than you think -- America has only been a liberal democracy since around the turn of the century (universal suffrage is a requirement) and has been over $9,000 GDP per capita even less time.
Still, between them the liberal democracies have something like 9,000 combined years of continuity (I could be off on the #, citing from memory).
It seems pretty unlikely. I mean, the U.S. could easily invade Canada or Mexico. We don't, because they have nothing we want that badly, given how rich we all are.
One thing I've learned reading Hayek is that Hitler's rule was largely the result of a society that had already abandoned liberalism for the promise of socialist planning, and was suffering the consequences. They put him into power because they thought he was someone who could get things done.
Well, oil, but who cares about that?
Can you really conceive of a situation where we would invade Canada for oil, short of economic collapse?
But all in the same 100 year space. They've all existed under nearly the same geopolitical conditions. What we haven't seen is what happens when the world is all democratic. It's the cynic in me that expects things to fall apart.
A fair question.
I'm not so sure it is a fair question. Regardless of where the money is coming from it is a real investment in a real economy that is reaping real dividends.
The best numbers I could find were from the CIA factbook which claimed 33 billion pledged 2004-2007 in economic aid, with the 2006 estimated GDP as 40.6 billion. Which would put foreign aid at somewhere around 10-20% of the economy (which is ~70% oil-based according to the brookings institution pdf).
But those numbers don't really mean much. Iraq is not a functioning state and we shouldn't expect its market to perform like one. The goal is baby steps here. Get the market rolling, get the economic infrastructure in place so that the economic and political situations can improve synergistically rather than spiral downwards synergistically.
The answer is in the Iraq Index. They list how much was disbursed in 2007; it appears to be a few billion, or about what Iraq sells in oil every month.
The real question is how big Iraq's non-oil GDP is, and no one really knows for sure, but it's probably somewhere between half and a tenth of total GDP (lots of uncertainty there).
So, overall, U.S. aid is probably less than 10% but more than 2%. My guess would be around 5%.
Zach, I agree with you.
I am certain everything will work well.
I didn't mean to imply that I think it's a bad investment, however, the corruption that is a part of Arab (and Chinese, and Mexican, etc etc) culture is something that really bothers me. If we're spending our children's future money on these people, it better not be going into the Swiss bank accounts of corrupt individuals.
As I understand, the democrats pulled the plug on south vietnam partly because they wanted money more than they wanted freedom/democracy. If Iraqis are the same way, and I'm not saying they are, then we should pull the plug on them too.
It's sad when I consider how corruption is the norm in most of the world. It reminds me of a line from the movie Syriana (an unrealistic movie): "Corruption? CORRUPTION? Corruption is the reason WE win!"
Of course we all lose our tempers now and then. Dean freely admits to being imperfect in this regard, which is why regulars to this establishment will generally be cut more slack than people who we don't know very well.
Still: behave like an adult, or go find somewhere else to play. Thanks.