Tuesday, December 26, 2006

More on "The Mother of All Surprises"

Great op-ed on Iraq’s booming economy (outside the Baghdad disaster zone) from Amir Taheri in today’s New York Post:

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.

Some noteworthy observations of the "growing dynamism of the Iraqi economy" from Taheri’s article:

- A steady increase in the value of the Iraqi currency;
- Civil-servants salaries have increased almost 30 percent (with another 30 percent due to come into effect early next year);
- An unexpected flow of foreign capital (spurred by the removal of tariffs and trade barriers);
- The number of private companies since Saddam’s fall has increased from 8000 to 35,000;
- A 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;
- One privately owned mobile phone company is expected to report revenues of more than $500 million this year, a sevenfold increase in three years;

The next step is obviously to stabilize the Baghdad area through a troop surge.

This course of action will help secure the democratically elected government and create a more peaceful and prosperous region. General Alexander Haig on Kudlow & Company told us last week that this is a doable proposition.

Year-end question: Is everybody just too pessimistic about Iraq’s future?