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In-depth Business Intelligence
Books on Iraq
REPUBLICAN REFERENCE
Area (sq.km)
437,072
Population
24,001,816 (July 2002 est.)
Capital
Baghdad
Currency
Iraqi dinar (IQD)
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Update No: 020 - (01/01/05)
The rocky road to elections
While there is no doubt that the Bush Administration is genuinely convinced
that holding elections in Iraq in January must be a key part of any pacification
strategy, delivering elections which could be widely recognised as fair and
legitimising is no small task. The increased pace of US military operations in
the Sunni heartland of Iraq has so far failed to deliver greater security and
its only short term achievement has been the even greater alienation of the
Sunni Arab minority. It is now clear that even some parties which used to
support the interim government, like the Islamic Party, are going to boycott the
elections. Moreover, the orderly running of the elections in the Shia provinces
of the centre and south cannot be taken for granted, since Muqtada Al-Sadr
continued to maintain an ambiguous attitude and as late as December was railing
against parliamentary democracy. Although his movement will field a number of
candidates in the elections, its commitment to parliamentary democracy is
clearly less than full.
Some 217 political groups and parties have so far registered for the elections,
but the formation of coalitions and alliances has proceeded rapidly and it now
appears that there will be three or four main contenders in the elections. The
main Kurdish parties have formed their own block, which is likely to attract a
number of Arab or all-Iraqi secular parties, among which the most prominent is
the Communist party. The Shia religious parties, on the other hand, have formed
their own alliance, which is widely tipped to win a majority. However, although
this alliance seems to include even supporters of Al-Sadr, who would run as
independents as his movement has not been registered, and some non-religious
groups, 38 other smaller Shia parties refused to join it and will presumably
form a separate list. They accused the dominant groups in the Shia alliance of
having offered them too few candidate slots, possibly because these 38 parties
are mostly secular ones. While these smaller parties have little support in
Iraq, if they launch their own alliance or join other lists they could still
weaken the chances of the grand Shia alliance to win an outright majority. The
list currently being promoted by interim President al-Yawer, also a Shiite, is
the one most likely to attract the dissident shiites. The list is expected to
draw support mainly among al-Yawar own tribe, the Shamar, even if he is trying
to enlist support nationwide. Finally, Prime Minister Allawi is also trying to
put together his own list.
Final deal on debt
Russia's objections to the proposal to slash Iraqi debt by 80% were finally
removed in December and a final agreement was reached. Iraq's debt towards the
Paris Club will be cancelled in three stages between now and 2008 and will fall
from the current US$38.9 billion to US$7.8 billion. It is believed that Russia
finally agreed to the deal having received assurances concerning its Iraqi oil
contracts.
Talk of recovery
The World Bank now recognises that this year the Iraqi economy has just
reached the prewar output levels and that per capita income is still under
US$800, but it also believes that in 2005 the economy will finally start growing
quickly. Recovery will of course mostly depend on the oil industry. The Iraqi
government now plans to invest more than US$1 billion in the industry next year,
aiming to increase output by 15% to 3.25 million bpd. Its current capacity of
2.8 million bpd is 0.2 million bpd short of the original target for 2004. Actual
production, of course, was significantly lower than that, due to widespread
sabotage. Not only the pipelines are constantly attacked, but many oil wells are
being set on fire too. So far the government has been trying to enlist the help
of local tribes to protect the oil infrastructure, but this proved ineffective.
Tribal rivalries led to even more attacks and now the already thinly spread
National Guard is being deployed to improve the security of pipelines and wells.
Whether the economy will grow next year and by how much, remains to be seen, but
for the moment, what is growing is the cost of living for ordinary Iraqis. The
benefit of increasing salaries months ago is being eroded by spiraling prices of
commodities and most importantly rent, especially in the capital Baghdad, where
the population is rapidly growing. It is estimated that rental prices increased
by at least 300% compared to the early months of the occupation and many
families have been priced out of the market.
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FOREIGN ECONOMIC RELATIONS
Iraqi PM encourages Russian firms to take part in reconstruction
Iraq is prepared to cooperate with Russia and to sign any contracts, Iraqi Prime
Minister, Iyad Allawi, said in an exclusive interview with ITAR-TASS News
Agency.
Allawi said that on 7 December he had meetings with Russian businessmen who
represent various sectors of industry, and the oil sector, in particular.
"In the course of these meetings I spoke about the need for Russian
companies to take part in the reconstruction of Iraq," Allawi said.
He said that his visit to Moscow "presents a wonderful opportunity to meet
the Russian people who have a friendship with Iraq that goes back over a long
time." Allawi said that he had had very productive meetings and stressed
the importance of his meeting with Russian President, Vladimir Putin, at which
prospects for developing bilateral relations were discussed.
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