One year later: a rebound in Iraq
Rocket attacks. Political and sectarian strife. Given all the turmoil in Iraq, it's easy to miss what's going right there one year after the war: economic recovery.
Despite high unemployment and power blackouts, Iraqis are seeing a big rebound in business. That turnaround is one key to improving the nation's political stability.
Yet, even with recovery, Iraq will not be able to fully repay its massive debts, so they'll have to be forgiven. And it will need huge sums in aid from the United States and others.
The short-term outlook is encouraging. "Iraq may now be the world's leading country for pent-up demand," notes Iraq Reconstruction Report, a newsletter in Waltham, Mass. "Right now, millions of Iraqis are buying their first cellphone, satellite dish, TV, washing machine, air conditioner, car, and so on. Companies are buying their first computers, earth-moving equipment, satellite Internet connection, and all manner of corporate tools."
There's "significant progress" in reconstruction and political transition, a blue-ribbon task force of the Council on Foreign Relations (CFR) in New York reported this week. Here's a look at the good, the bad, the in-between:
Overall economy: The World Bank Group estimates that Iraq's gross domestic product - its total output of goods and services - will rebound by a huge 33 percent this year after two years of decline. At $17 billion to $22 billion in size, its economy will rival tiny Luxembourg.
Oil: Key to the World Bank outlook is the assumption that Iraq can continue to revive its output of oil - its greatest source of income. By year's end, the bank predicts a recovery to nearly prewar levels: 2.7 million barrels per day, with 2.3 million b.p.d. exported.
Reconstruction: Oil and other exports won't fully provide the massive sums needed for rebuilding. The World Bank figures that oil revenues and other Iraqi assets will only cover "recurrent" expenditures this year of $12.1 billion and $1.4 billion of modest investments.