Sun, Jul 06, 2003 - Page 11 News List

Baghdad's traders sample free market

GOLDEN OPPORTUNITY Iraqi merchants are cashing in on the removal of trade barriers by the interim US-led administration, but long-term economic questions remain

BLOOMBERG

In the nearby "Manama" appliance store opened last month, owner Nabil Abu Rivan keeps his Kalashnikov stowed away behind a large fan, and reachable from his desk. He keeps another seven weapons in the shop, nervously interrupting conversations to oversee staff unpacking boxes. A day earlier, his store was attacked by robbers who ran off empty-handed after Abu Rivan shot at them.

Partially stocked with refrigerators, television sets, and electric ovens, the store did brisk business when it first opened, selling 300 satellite phones a week, 500 TV sets, and 200 refrigerators. The buyers? "Ali Baba," says Abu Rivan with a smile, referring to wartime looters who were spending their newly found cash.

While few import barriers mean "we sell and we put the money in our pocket," says Abu Rivan, "I'd prefer laws. At the moment, anybody can sell, import or buy."

Competition has led him to lower the price of a 20cm Samsung TV to US$180 from US$260 initially.

Lawlessness also hits traders at home. Sherko Abdelrahman, a 32-year-old importer of electrical parts, woke up one night to find his wife in tears as vandals threw stones at his door. No harm was done, but Abdelrahman keeps a gun at home.

Power shortages compound the trouble. While Abdelrahman has sold 350 generators in just 20 days because of the heat -- 45 degrees Celsius at midday, on average -- and boosted their price to US$130 from US$85 amid growing demand, he says he longs for the day when he can go back to selling large electric circuits to factories.

"God willing, electricity will come," Abdelrahman says as he stuffs licenses for the Syrian and Lebanese borders in his pocket.

Some wonder how long it will be before the US administration reimposes tariffs. Iraq's economic welfare will depend on it, they say. US officials say they will hand economic decision-making over to the new Iraqi governing council to be appointed in mid-July and it will decide future trade regulation.

"We know nothing about the future," says the Chamber of Commerce's Hussein. "What kind of rules will we have? What's the next step? They won't leave things as they are."

To interim Central Bank Governor Faleh Daoud Salman, getting the import business going is "not the aim of the Iraqi economy."

"Some people want to make a quick profit," he said in an interview. "We must give priority to what the economy needs: foodstuffs, raw materials and new machines to rehabilitate industry, and utilities and services to all citizens. For 13 years we were under a blockade and sanctions. Trade, agriculture and industry have deteriorated."

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