Friday, October 10, 2003

Follow-up on Iraq Shock

I realize that you have to subscribe to the Economist to access its Web site, but I still thought it worth pointing out its recent article on the new economic plan for Iraq.

The headline alone speaks legions: "Let's all go to the yard sale." Not to mention the subhed: "If it all works out, Iraq will be a capitalist's dream."

Though of course the Economist takes a far more sanguine view of Iraq's "shock programme of economic reforms," the article makes clear how extreme a plan it is. To wit:

"If carried through, the measures will represent the kind of wish-list that foreign investors and donor agencies dream of for developing markets. Investors in any field, except for all-important oil production and refining, would be allowed 100% ownership of Iraqi assets, full repatriation of profits, and equal legal standing with local firms. Foreign banks would be welcome to set up shop immediately, or buy into Iraqi ventures. Income and corporate taxes would be capped at 15%. Tariffs would be slashed to a universal 5% rate, with none imposed on food, drugs, books and other 'humanitarian' imports."

As for the authorship of the plan, which I questioned in my previous posting below, the weekly writes:

"The regulations were announced by Iraq's nominal finance minister, Kamel al-Gailani, but they bear the signature of Paul Bremer, who heads the American-run Coalition Provisional Authority, and the imprimatur of the American consultants it has hired to frame economic policies."

As for the article's concluding sentence -- "The unspoken wish is that this will create a poster-child for the recalcitrant economies surrounding it." -- I can only agree if this is intended to mean a poster child of the sort used to raise funds for Easter Seals: in other words, a cripple.