Fixing Iraq's Economy
What are Iraq's Trade Minister Ali Abdul-Amir Allawi's views on his country's economic future?
October 22, 2003
Ali Abdul-Amir Allawi holds the challenging position of trade minister in Iraq's interim government. His country must reconstruct its industry, stabilize its economy — and become part of the global marketplace. In our Read My Lips feature, Mr. Allawi lays out his views on how to rejuvenate the Iraqi economy.
What kind of economic challenges does Iraq's interim government face?
“Many economic facilities are no longer serviceable. Nobody invested in them. The government used to run them exclusively. Now, however, the private sector must play its role.”
Were any sectors privatized under Saddam Hussein's regime?
“The milling industry was, to a large extent, handed over to private interests in the 1990s. It’s one of the few areas of economic activity in Iraq that was, to some extent, privatized.”
Should Iraqis expect a privatization spree?
“By no means should we preserve all state-owned enterprises — but there are some sectors that are more natural for government involvement or rehabilitation.”
What countries are serving as examples for Iraq's economy?
“There are many cases where state ownership of companies has worked well. Just look at Malaysia and Singapore, which have been very successful.”
Why are you wary of allowing too much foreign investment?
“We understand the need for foreign investment, but we worry that too many people will be driven out of business before they have a chance to organize.”
Will favorites be given to the countries that aided in Iraq's liberation?
“No preferences will be given to the liberating powers, who will be looked at favorably — but not at the expense of the Iraqi consumer.”
What is your strategy for Iraq's economic integration?
“We believe in economic integration. We are focusing on Kuwait, Iran, Turkey and some other Arab countries. These countries can further link Iraq with numerous other countries. For example, Turkey links us with Europe, Kuwait links us with the Gulf countries — and Iran links us with other Islamic countries that were formerly Soviet republics.”
What is Iraq's plan regarding its massive foreign debt?
“The Iraqi government recognizes problems on the uncollected debts, as they were spent not in producing weapons of mass destruction, but building infrastructure. But the fact that Iraq has just emerged from war and started from a financial ‘ground zero’ should be taken into account.”
Is Iraq's situation comparable to Eastern Europe's economic transformation?
“The economies of Eastern Europe collapsed due to internal problems. Our situation is very different, since the changes came in the form of very welcome help from outside.”
Will a shock to the economy promote long-term economic growth?
“This push to sell everything is the political stance of economic fundamentalism. A plan based on ideology — not economics is — of course, naturally wrong.”
Why do you oppose an instant economic shift to jumpstart the economy?
“There have been enough shocks to the system, so we don’t need this shock therapy in the economy.”
And finally, what obstacles will Iraq face in the future?
“We suffered through the economic theories of socialism, Marxism — and then cronyism. Now we face the prospect of free-market fundamentalism.”