12.18.2006

Iraq's Booming Economy

Newsweek is astounded that Iraq's economy isn't a complete black hole:
It may sound unreal, given the daily images of carnage and chaos. But for a certain plucky breed of businessmen, there's good money to be made in Iraq.

(Yeah, and I suspect that this "plucky breed of businessman" works in the part of town known as the "black market.")

The Iraq economy is growing because the majority of the population is no longer under Saddam's thumb. If they had any money saved, they could buy into the new life that had more or less appeared overnight. The UN's oil-for-food sanctions were lifted instantly, and the country's tribal social network created their own free markets. And just like America's first free markets in the West, there was great money made by certain plucky businessmen. (Nearly three billion dollars worth of crude oil were swiped last year alone.)

Newsweek might be surprised, but the rest of us shouldn't. Iraq is the ideal black market right now. Whatever you can't sell to the locals can be sold to any number of foreign 'visitors'. Everybody wants vehicles, weapons, ammo, food, electronics, broadband, energy, drugs, music, sex. And the security situation only drives the prices up.

Iraq is a long ways off from a normal, stable economic system. The Sunni population want a cut of future oil revenues, and it appears unlikely they will receive it. As a result, they have no incentive to play nice. And this draws the Saudi's and Al Qaeda into the mix. And this forces the Shi'a to put on their poopy pants and the cycle continues.

Ech.

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