July 1, 2012 in Daily Bulletin
Tim Arango writes that underneath the veneer created by Iraq’s shiny new malls, there lies a rotting economic foundation that could lead to crisis in the future. Highlights include:
- Iraqis are awaking to a new era of consumerism and prosperity. American-style malls are opening up around the country. They have products from all over the world, floors where only women are allowed, and play areas for kids. The biggest will even include a five-star hotel, and a hospital.
- Yet the majority of the Iraqi government’s revenue is derived from oil. This has led to public sector workers receiving large salaries.
- Many Iraqis now strive to get a government job.
- This money and these jobs have now become a way of funding party loyalty.
- This hurts the private sector because the generous public sector wages means that they can’t hire top quality talent and compete at the highest levels.
- Just before the rise of Saddam Hussein Iraq was also a country with accelerating oil revenues and networks of corrupt patronage. History may be repeating itself.
To read more including some of the amazing things contained within these malls, the demand for McDonald’s, how Iraq relates to Saudi Arabia, what economic experts have to say about the economy, the growing powers of the Prime Minister, and Iraqi aspirations click here.
Source: The New York Times