Economy still stalled across Iraq

Two years after the U.S.-led invasion of Iraq, much of Iraq’s infrastructure remains impaired and insurgents are working to wreck the economy as fast as the U.S. and Iraqi governments can restore it.

The tattered and struggling country has become one of the world’s poorest — ranking at the level of Haiti and Senegal — and economists see little hope for major improvements this year.

Overall, Iraq has less electricity each day than a year ago. Oil production so far this year has slipped even below 2004’s disappointing levels, and 60 percent of the people depend on food handouts.

Yet some Iraqis say parts of their lives are improving. The country now boasts a freewheeling consumer economy flush with cell phones, Internet cafes and independent newspapers, along with plenty of high-paying government jobs.

Retail sales on mend

“I think things will get 100 times better,” said Abdul Radha al-Quraishi, 65, who owns a Baghdad bookstore where Saddam Hussein-era stamps and bank notes are sold as souvenirs. “Merchant trade has increased unimaginably.”

His counter clerk, Nassim Mahr Rashid, 28, agreed but said, “The problem is, we don’t know whether we are going to live or die.”

Mr. Rashid’s point is critical. The economy has emerged as one of the country’s chief battlegrounds.

Iraq’s 12,000 to 20,000 guerrillas stage nearly 40 attacks a day, according to Pentagon figures, and do their best to tear down an economy that the U.S. and Iraqi governments are struggling to rebuild with $18.4 billion in U.S. taxpayer money.

Safety an issue

Security has become a key economic variable. Improve it, and Iraq can fight its way to recovery. Let it slip, and Iraq wallows in violence and poverty.

“What’s likely for the coming year is increased attacks,” said Tamara Makarenko , a senior analyst with Global Risk Strategies, a London firm handling security at Baghdad’s airport and other sites in the capital. “It’s becoming quite indiscriminate. You don’t know where they’re going to go.”

Iraq’s chief income source, exported oil, has been a primary casualty.

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