[OPE] Political economy in Iraq

A NYT article yesterday points out just how very difficult it is for Iraqis
to rebuild any sort of "market equilibrium" in their country. It turns out
that market trade depends vitally on an accepted, secure and enforcible
legal framework for property rights, and a social/material infrastructure
for trade, to be implemented by the new state apparatus, with which citizens
have to cooperate, whether voluntary because they recognise its merits, or
simply because they have to:

Many Investors Still Avoid Risks of Iraq
By STEVEN LEE MYERS
Published: September 27, 2009

(...) New legislation intended to regulate investments, land rights, taxes,
financial services and consumer protections remains stalled in Parliament.
The mere mention of the sort of privatization that swept Eastern Europe and
the former Soviet Union after the collapse of Communism is anathema to
officials here. "We are not after shock therapy," Sami al-Araji, the
chairman of Iraq's national investment commission, said in an interview. "We
are after a gradual change from a centrally controlled economy to an open
one." (...) "Capital is cowardly," said Mejul Mahdi Ali, the president of
Diyala's newly created investment commission. "It is always looking for a
safe place." As he spoke, an explosion reverberated through Baquba; a
roadside bomb killed three police officers. (...)
http://www.nytimes.com/2009/09/28/world/middleeast/28diyala.html?pagewanted=1&_r=2&hp

USA Today noted at the beginning of this year, in the aftermath of the
destruction of much of the infrastructure in Iraq by foreign military
forces, that:

"The U.S. military has said Iraqi leaders must improve basic services - like
electricity, water and roads - and combat high unemployment in order to
maintain the security gains made over the past year. Lt. Col. William
McDonough, an intelligence officer with the division that oversees central
Iraq, says Iraq's economy and basic services are now the No. 1 threat to the
nation's stability."
http://www.usatoday.com/news/world/iraq/2009-01-28-iraqecon_N.htm

In the attempt to create any sort of viable market economy, the "original
sin" is that the political state somehow has to integrate the workforce into
it. It turns out that "free markets" are predicated on getting the working
population to meet its requirements. On a visit to the US, Rasim Awadi,
President of General Federation of Iraqi Workers commented, that:

"Actually, there's a complete lack of labor law for the Iraqi working class,
and the laws now in effect are the same ones that Saddam set in place in the
past regime. (...) we still suffer from three main points: the lack of a
general labor law, 51 percent of unemployment, a complete lack of a stable
service sector for workers. So, a lack of a retirement plan, social security
and social services for workers are not there. For that reason, workers are
in a very dangerous position since the occupation, but we hope that some of
our union leaders will be able to realize what Iraqi workers hope for. (...)
We first ask that the American people put pressure on their government to
withdraw American forces from Iraq. And second, we ask the American people
to assist us in reinstalling our infrastructure, from education, water,
electricity; all these things that have been abandoned in our society. And
during our trip now, we got a lot of support from the American working class
through their unions, and we thank them for that support."
http://www.democracynow.org/2009/9/21/iraqi_labor_leaders_denounce_us_occupation

"Samir Shaker, 18, says he has paid $700 in bribes so far to get a job with
the police [the Ministry of the Interior has hired hundreds of thousands of
police officers]. Because jobs are so scarce, he says, corrupt officials now
want double the money. Shaker's family has gone into debt to try and secure
a position for him, and they have no more money to give. He says he and his
friends all face the same predicament. "We only sit around and do nothing
for 24 hours a day. We smoke, we talk and hang out in the streets," Shaker
says. In trying to come up with moneymaking schemes, Shaker says, one of his
friends was willing to sell a kidney. If the situation gets any worse,
Shaker says with the kind of gallows humor typical of Iraq, people will
start to eat each other."
http://www.npr.org/templates/story/story.php?storyId=102827342

J.

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Received on Mon Sep 28 18:03:14 2009