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Foreign investment to be allowed in Iraq
Same article as a couple others; I broke it up to facilitate discussion. EFL
Iraq’s interim government announced plans Sunday to open all sectors of its economy except oil to foreign investors and to institute an income tax next year. Iraqi Finance Minister Kamil Mubdir al-Gailani unveiled the plan in Dubai, where the International Monetary Fund and World Bank are holding their annual meetings. Under the plan, foreign banks will be allowed to enter Iraq, with some restrictions, and foreigners will be permitted to lease property for up to 40 years but not own it. The new policies mark a sharp departure from the tight economic controls that were in place for years under Saddam’s one-party rule that lasted for three decades until he was toppled in April. Al-Gailani also announced a 15 percent maximum tax rate for individuals and corporations starting Jan. 1 and a 5 percent reconstruction surcharge on all imports except for humanitarian goods. Most personal incomes were not taxed under Saddam.
15% maximum tax rate? That’s very similar to what the British governor of Hong Kong did right after WWII. Said governor also instituted legal protections, ensured the courts were honest and fair to Anglos and Chinese alike, attacked corruption and make government accountable. Taxes were kept low and stable to encourage investment and savings. We all know the result in Hong Kong. Someone in Iraq is learning from history.
Treasury Secretary Snow applauded the blueprint for a new Iraq economy as ``policies that make sense ... that offer real promise,’’ but cautioned that security in a nation still facing daily violence would be a prerequisite for any substantial economic recovery. ``It’s awfully important that we see Iraq move forward well and become a place of peace and security,’’ Snow said in Dubai.
This is good, and as the security situation improves it will be better. Who needs the French?

The Frenchies will show up. They'll just have to compete on the same basis on the Germans, Brits, Samoans, and Icelanders...

This is probably the day's most significant story. Iraq taking the free market economy route, opening up to foreign investment, with low tax rates and (at least I haven't heard of any yet) no VATs to slow the economic works, is a recipe for economic recovery. Whether the inhabitants will get used to the idea quickly, after 30 or 35 years of National Socialism remains to be seen. It's also a good longer-term mechanism for increasing security. People are going to have too much to do to spend their time running around with RPGs...

Posted by: Steve White 2003-09-22
http://www.rantburg.com/poparticle.php?ID=18947