SKOPJE, Macedonia, Aug. 15 (UPI) -- Iraq is preparing for yet another war and yet another seemingly mortal blow to its eerily resilient economy. According to Fred Horan of Cornell University, Iraq's gross national product per capita contracted by one-third in the aftermath of its protracted war with Iran.
Similar drops in gross national consumption and government spending were recorded by Kamil Mahdi of the Center for Arab Gulf Studies in Exeter University. The CIA pegs the cost of the Iran-Iraq conflict at $100 billion. This was three years before the Gulf War and the decade of debilitating sanctions that followed it.
Mahdi provides an overview of the devastation: "A decade of war followed by a major air campaign against Iraq's infrastructure and eight years of severe and comprehensive sanctions have devastated the country's economy. Lost production and diversion of resources to military activities are far from being the only economic costs. Accumulated effects on society include the loss of life, physical impairment, breakdown of societal institutions, declining morale, emigration, and all the associated hemorrhage of skills and intellectual capabilities. The effects of induced technological backwardness, of destruction and accelerated degradation of the infrastructure, and of the increased environmental damage of short-term palliative solutions need also be mentioned."
Still, The Wall Street Journal, Time magazine, and the BBC have all reported recently that the streets of Baghdad are teeming with new cars and Chinese double-decker buses, its bustling markets replete with luxury products, restaurants are making a brisk business, and dozens of art galleries are prospering where two languished only 4 years ago.
The razed bridges and airport have been rebuilt. Electricity has been mostly restored. Sumptuous mosques have sprouted everywhere. Almost $2 billion were devoted to new palatial mansions for Saddam and his family, The Washington Post said on Feb. 27, 2001. Kurdish media related how 250 kilograms of gold were applied by imported Indian and Moroccan craftsmen in two of the palaces. Iraqi state television reported in June that Saddam exhorted his ministers to avoid corruption and nepotism.
Reconstruction reached the much-neglected Kurdish north as well. The year 2001 report of the "Ministry of Reconstruction and Development" (MORAD) in Irbil lists thousands of housing units, dormitories, schools, and guest houses built this year with an investment of $70 million hitherto.
The "Kurdistan Regional Government" announced proudly the $6 million completed restoration of the landmark Sheraton. It joins half a dozen other luxury hotels constructed with allocations from the oil-for-food program administered by the UN on behalf of the Iraqi government and money from Turkish investors.
But not all is rosy in the "safe zones." Irrigation projects, electricity, the telephone system, schools, teacher training, health provision, hospitals, clinics, roads, and public transport -- are all in dire need of cash infusions. UPI reported that Arab employees of the United Nations are pressured by Saddam Hussein "to do his bidding" in the north. Iraq refuses to collaborate with U.N. authorities to release from its warehouses heavy equipment destined for the Kurdish parts, reports Radio Free Europe.
Iraq also continues to pursue its program of weapons of mass destruction. It is in the market for components and materials for nuclear bombs, warned The Washington Time. Iraqi defectors confirmed the information and delineated a blood-curdling -- and expensive -- effort to reinstate the country's capacity to produce nuclear, chemical, and biological armaments.
According to Stratfor, "Iraq is procuring weapons systems -- such as advanced conventional weapons rather than nuclear capabilities -- that would more immediately affect the outcome of a war with the United States. It is specifically seeking to enhance its air-defense capabilities, improve its ground-to-ground missiles and upgrade major battlefield weapons systems for ground forces."
Iraq felt sufficiently affluent to declare a one month oil embargo in April at a cost of $1.2 billion, to protest US partiality towards Israel. It also generously supports the families of Palestinian "martyr" suicide bombers with grants of $25,000 plus another $25,000 per each house demolished in the Jenin refugee camp by the Israelis. Smaller amounts are distributed as disability and recuperation benefits, mostly through the "Arab Liberation Front," reported the Daily Telegraph.
Family members of the "heroes" get free enrollment in Iraqi institutions of higher education. Iraq recently donated 10 million euros ($10 million) to the intifada. Radio Free Europe/Radio Liberty estimates that this display of Arab solidarity has cost Iraq $1 billion.
This hoary bravado masks a dilapidated infrastructure, decrepit hospitals and schools, spiraling prices, malnourished and diseased children, and a middle class reduced to penury. According to the World Bank, Iraq's population grows by 2.9 percent annually, from a base of 23 million citizens.
Infant mortality is 61-93 per thousand live births, depending on the source of the estimate. Of those who survive, another 121 children perish by the age of 5. UNICEF estimates that at least 500,000 children died that shouldn't have under normal circumstances. The Iraqi Mission to the United Nations put the number at 713,000 plus a million adults. CNN describes an ominous shortage of clean water. Inflation hovers around 100 percent.
But none of these data is reliable. Estimates vary widely. The CIA says that the trade deficit in 2000 was $1 billion and the external debt amounted to a whopping $139 billion. Not so, countered the Economist Intelligence Unit (EIU) -- external debt was a mere $53 billion last year. The EIU also forecasts a 2 percent drop in Gross Domestic Product this year -- but a growth of 6 percent next year, commensurate with a recovery in oil production.
Still, things are not as bad as relentless Iraqi propaganda makes them out to be. Infant mortality figures are suspect as are most other Iraqi statistics. The BBC interviewed an Iraqi defector whose two year old daughter was maimed by interrogators. He claimed to have participated in fake "baby funerals". There is no telling if this is true or a part of the propaganda war waged by the would-be combatants.
According to the BBC, Iraqi life expectancy for men is 66 years. Women outlive them by 2 years on average. Annual income per capita is about $600. GDP per capita is $715, down from $3,000 only a decade ago -- or maybe double that according to the Economist Intelligence Unit.
But these figures are misleading. According to the CIA 2001 World Factbook, Iraq's GDP per capita in terms of purchasing power is a more respectable $2,500. GDP grew by 15 percent in 2000 -- or 4 percent according to The Economist Intelligence Unit -- though admittedly from a dismally low base.
Part 2 of this analysis will appear Friday.
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