Tuesday, March 28, 2006

Economics, Liberty, & Iraq

Nima Sanandaji:
"Can Middle Eastern states put oil resources to better use? Is it possible for free enterprise to thrive in the Arab world? The experience in Iraq suggests that the answer to these questions might be yes. The democratization of Iraq has meant that both foreign and domestic businesses can operate in a freer economic environment. Although media seldom report about this, the Iraqi economy is rapidly growing. According to the report 'Measuring Stability and Security in Iraq October 2005,' GDP per capita has more than doubled between 2003 and 2005. Compared to pre-war levels the increase was 31 percent. And the future looks bright. According to the Brookings Institution Iraq Index the Iraqi economy is expected to have a real GDP growth of 49 percent in the period 2006-2008. The oil sector has still not recovered to pre-war levels, partially due to the terrorist menace. Still, if Iraq continues on a path to democracy and economic progress, it is a fair assumption that its natural resources will be put to better use. Foreign investors and consumers would most likely appreciate the possibility to buy oil from a country that does not support terrorists or fundamentalist schools abroad.

Of course, Iraq still has a long way to go in order to recover from the war and the many years under Saddam's tyranny. But if the Iraqi economy can grow despite the ongoing attempts by radicals to undermine it, the same should be possible for the rest of the Arab world. Iraq could serve as a positive example in a region where policy makers have little knowledge about the benefits of free market reforms."
The entire piece is worth reading.

No comments: