Wednesday, October 15, 2003

More on Shock for Iraq:
Finance minister advocates less-radical reform

I think next week, when I have more time, I'll look into this further, but meanwhile here's another piece from the New York Times about the "shock therapy" new economic plan put in place in Iraq by Paul Bremer on behalf of the Bush administration.

Titled "Iraqi Official Urges Caution on Imposing Free Market," the article appears on the first page of the World Business section and was written by Thomas Crampton from the World Economic Forum's East Asia Economic Summit, taking place this week in Singapore. The online version includes a photo of said Iraqi official; the print version does not.

"We suffered through the economic theories of socialism, Marxism and then cronyism. Now we face the prospect of free-market fundamentalism," Ali Abdul-Amir Allawi, Iraq's interim trade minister, said in an interview with Crampton.

Referring to the economic plan announced in late September by Iraq's finance minister at the annual World Bank/IMF get-together in Dubai, Allawi said it could lead to (quoting Crampton here, not Allawi) "a reaction against foreign companies and persistent political stability."

Allawi notes -- with a diplomatic flourish at the end -- that Iraq's situation is not comparable to that of the East bloc countries emerging from communism: "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."

Essentially, Allawi plumps for a slower, gentler pace of privatization, as well as some protection for at least a few Iraqi industries other than merely oil. "These things are not yet being thrust down our throat," he says, "but I strongly disagree with the call for fast and radical change."

To impose a full-fledged (I'd say "over-fledged," compared to any other similar program of reform in recent years) free market overnight in Iraq, the minister believes, would be to apply a "flawed logic that ignores history."