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| World Marketplace |
Shifting Economic Sands
By Jean-Francois Seznec
04/01/2004
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One of the lesser-known
tragedies of Iraq’s economy is the decline of a viable food processing industry
that, before the socialist Ba’th party took over, grew up under the command of
local merchant clans with vast agricultural holdings. Although foreign capital
is sorely needed for this and other consumer products sectors, neither the south
nor the north offers much incentive. Iraq will never be able to catch up with
Asia as a globally competitive manufacturing center, so whatever production
occurs will be limited mostly to the domestic market and will probably be of
little interest to anyone but the merchant clans that are now coming out of
hiding.
With the tenuous political balance among Iraq’s factions, the ongoing
attacks on U.S. and British forces and the country’s enormous infrastructure
investment needs, Iraq may not seem to be “open for business” for some time.
When money begins to flow, the north-south divide could further complicate the
country’s fragile political structure. With these factors all up in the air, it
is difficult to determine who will benefit from Iraq’s economic revival.
Jean-Francois Seznec teaches Gulf politics and finance at Columbia
University and Georgetown University and is a managing director of the
Lafayette Group in Annapolis, Md., a privately held investment company.
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