What Could Iraq Become?


By Stanley Reed During the 1990s, Iraqi TV viewers were mesmerized by the fictional adventures of a brooding, bubblegum-blowing mobster, Abu Alich, and his gang of Baghdadi heavies. With its mob violence, culminating in a final episode in which the thugs are gunned down by police, The Wolves of the Night apparently struck a deep chord with the Iraqi public.

According to author Joseph Braude in The New Iraq: Rebuilding the Country for Its People, the Middle East, and the World (Basic Books, 211 pp, $26), this was because it depicted "ordinary people responding to extraordinary hardship by doing what they must to get by."

The show certainly wasn't a critique of Saddam Hussein's rule. But it reflected how the Iraqi business world had turned into a gangster culture during the last years of the brutal dictator's reign. The so-called Qitat al-Hisar, or "cats of the embargo," made big profits smuggling goods in from Jordan, Turkey, and Syria, and became the backbone of the business community.

"NO RULES." Nicely spiced with allusions to Iraqi popular culture, Braude's new book offers an entertaining introduction to Iraq, pre-"shock and awe." Braude's goal is to scope out what sort of country Iraq, now flat on its back, could become. The Middle East scholar and consultant for business consultancy Pyramid Research in Cambridge, Mass., demonstrates a vivid knowledge of Iraqi history and folklore, partly gained from his mother's family, who were once prominent members of the Iraqi Jewish community. He also appears to have traveled quite a bit to Iraq on business trips.

So, even though this book feels a bit like it was rushed to press -- or at least recast when it became obvious that Saddam's ouster was inevitable -- it'll prove useful to a range of readers, including those interested in pitching business projects to a new Iraqi government.

Saddam's land, we learn, "was not the Iraq that émigrés from the 1960s and 1970s remember, a country enriched with oil and legitimate business and employment opportunities for most of its citizens." Corruption, two decades of warfare, and the U.N. sanctions in effect since 1991, says Braude, resulted in "a stunted business and consumer culture that was at once beset by rigid restrictions and played by no rules."

CAN-DO SPIRIT. By late 2002, some 85% of private factories had ceased to operate. The once-thriving agribusiness sector was limited to producing preserves from tomatoes and dates. And the Iraqi middle class had been devastated.

Saddam found it worthwhile to allow a little space for private enterprise, including some rudimentary private banks that have sprung up in recent years. But those who would rebuild Iraq's economy will have to work with some unpromising material, notably the "dark meritocracy" of the now-wealthy smugglers. And it may take years or even decades to stamp out their bad habits, including bribery and intimidation.

Braude locates a few bright spots. These include a labor force whose workers are more skilled than those of other Arab countries and entrepreneurs who were forced by hardship to become especially sharp and inventive. For instance, they worked out a substitute for the mobile phone, which never had a chance to take root in Iraq's isolated economy. The entrepreneurs came up with "cordless phones rigged with a souped-up signal" that worked "up to two miles from home."

PERFUNCTORY TALLY. The 4 million or so Iraqi exiles living in the West and elsewhere are also a major asset. They have advanced skills to offer the old country, and they may have accumulated as much as $30 billion, some of which is likely to come home if conditions are right. Capital from the Persian Gulf Arab countries could pour in, too, the author predicts. Such flows may be increased by fears that, in the post-September 11 environment, such money is no longer safe in the U.S.

Braude's discussion of private-sector opportunities for Big Business is weak. He estimates the potential for investing in the oil industry at $40 billion to $50 billion, for modernizing the telecom industry at up to $1 billion, and for supplying the medical-equipment market at $450 million yearly. This is pretty perfunctory stuff, but Braude can perhaps be excused because so many unknown variables are involved.

One of the most important of these unknowns is the role that religion will end up playing in Iraq. Braude gives a nice presentation of the history of the various sects, particularly Shiite Islam, whose most important shrines are in the Iraqi cities of Najaf and Karbala.

WEST SIDE STORY. He worries that the new Iraq will be roiled by competition between the majority Shiites, who have been downtrodden for decades, and the Sunnis, who monopolized power under Saddam. This rivalry could be further heated up by support from the Iranians for their fellow Shiites and the Saudis for the Sunnis, Braude says. But he offers no conclusion about how these potent forces will in the end shape Iraq.

From the perspective of the early days of the post-Saddam era, Braude's work seems overly optimistic (see BW, 5/02/03, "In Baghdad, Guns, Chaos...Enterprise"). The Iraq he dreams of constructing is like a Middle Eastern version of Manhattan's Upper West Side, where diverse ethnic and religious groups produce a tolerant and artsy culture that's the envy of the region.

"I am not so worried about how to stem American cultural imperialism in Iraq," he writes in a section on the Iraqi media and its potential to transform the area. "Instead, I am trying to figure out how to foment Iraqi cultural imperialism in the Middle East and beyond." Dream on. BusinessWeek London Bureau Chief Reed covers the Middle East


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