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| Iraq-Jordan |
| WSJ: The Post-Saddam Boom |
| 2005-01-13 |
| EFL Reg Req The conventional wisdom about the Mideast is ubiquitous in the press, but largely unjustified from an economic perspective. A search of newspaper and magazine stories in 2004 reveals more than 3,338 articles including the words "Middle East" and "war and terrorism"; only 102 stories linking the "Middle East" with "growth" and "recovery" can be found. Yet definitive policies to normalize the Middle East have made regional and global market investors bullish, repatriated capital exported (or that had fled) from the region, and encouraged a sea change in foreign direct investment. The end of Saddam's regime sent a major, unconfused market signal after the West's years of disinterest in the Middle East as a Levantine backwater. Subsequently, every major capital market index in the Middle East has risen. Regionally, stock markets rose over 30% in 2004 and represent a market capitalization of $470 billion. This has been accompanied by a surge in regional property values and a higher number of tourists. The main Egyptian equity index has increased 165%, while that of Saudi Arabia has gone up by 158%. The Saudi market's stellar performance is especially striking given the great amount of attention paid at the moment to that country's security problems. Israel's leading index has risen by 32%, the benchmark index of Kuwait's exchange by 73%, Jordan's by almost 60%, and that of the United Arab Emirates by 110%. This upsurge in capital investment extends to Iraq. Since June 24, 2004, the Iraq Stock Exchange (ISX) opened and replaced the old Baghdad Stock Exchange, which was government-run and characterized by corruption and irregularities. The old exchange's trading activity pales in comparison to the ISX's performance so far. Saddam mortgaged his country's future to fund his tyrannical regime and delusions of regional grandeur. The World Bank estimates that Iraq currently has external debts of around $120 billion owed to other governments. With Iraq's GDP at $34 billion, debt is 350% of GDP. An economic stumbling block to development and reconstruction is a restructuring of that debt. With this in mind, former secretary of state James Baker made the rounds of Iraq's creditors appealing for debt forgiveness with substantial results. |
| Posted by:Mrs. Davis |
| #1 Iraq is an emerging economic power, you just watch. |
| Posted by: Captain America 2005-01-13 12:22:16 PM |