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12.03.03, 19:22
The Dow Jones tumbled 170 points yesterday, and the Federal Reserve looked
set to cut interest rates to below when Eisenhower was President in an
attempt to buttress a shaky American economy. But in Baghdad it was a very
different picture as shares continued to soar.
Facing an impending war and an industrial infrastructure fractured by years
of sanctions, the financial heart of the Iraqi capital should have long
stopped. But the Stock Index had risen by 58 per cent, to 2,117, in the past
six months, while the Dow Jones in New York fell by 10 per cent, and the FTSE
in London by 16 per cent.
And it is not just stocks and shares that are rocketing. Baghdad, Basra and
Mosul have become some of the prime spots in the region for real estate. The
price of land in Baghdad has risen by 20 per cent in the past four months, to
the equivalent of £170 a square metre, and those of more upmarket properties
by 30 per cent. One of the large and garish villas in the Mansour or Arasat
districts would cost around £140,000, although the trend is towards buying
land rather than property.
It is not despite, but because of the crisis that the boom is taking place.
Investors believe that after this things will change. None will say publicly
that "regime change"will lead to the American-inspired economic blockade
being lifted and Iraq again being able to enjoy its oil wealth, and the
inflow of foreign investment. Instead they intone that things are bound to
get better after the United Nations inspections and "the problem" has
finished. International aid agencies and businesses will come back in and
they will need places to stay, play and work.
The trading floor of the stock exchange, started 10 years ago, has no
computers, and the grey walls are peeling. But traders in electric blue
jackets scurry around to take advantage of the bull market. The director,
Abbas Fadhil, says: "Business people in Iraq have always traditionally been
investors and that is what this is all about."
Some of the money being spent has come from expatriates who had started to
invest back home in the past few years. Others have done well out of the
black economy and the kleptocracy created by the sanctions and Iraq's
stultifying bureaucracy.
But the feelgood factor is far from universal. Khalid Ali Qutub, who is about
to shut down his small household ware shop, has not even heard of the stock
exchange. "That is a world I know nothing about," he said. "All I know is
that I am about to lose everything thanks to this war."
