economy

Iraq recently completed the second round of bidding on its oil fields, which will hopefully usher in the return of international petroleum companies to Iraq that will bring in much needed investment and know how. This round went much better than the first with deals for seven of the ten fields up for auction.

A recent report by the Dunia Frontier Consultants company found that foreign investment in Iraq is increasing over the last year, led by the United Arab Emirates (UAE). The report said that direct foreign investment had more than doubled in the first nine-months of 2009 compared to all of 2008. Total investment is now estimated at $156 billion, a 241% increase from 2008. There are now 53 companies operating in Iraq from 24 countries. The UAE has placed $37 billion in Iraq, 25% of all investment.

Basra in southern Iraq and Irbil in Kurdistan are responding to the drought in different ways. Basra wants to be declared a disaster area and is calling for immediate relief, while Irbil is thinking more long-term and trying to create a water policy.

The United Nations Habitat for a Better Future project just released a fact sheet on the housing conditions in Iraq. It found that 40% of Iraqis live in slum conditions.

The latest statistics for Iraq show that core inflation is creeping back up in the country. Since early 2008 core inflation, that which excludes fuel, electricity, communication, and transport costs, has dropped in Iraq from 15.9% in April to 3.8% in April 2009. Since then however, it has crept back up to 10.8% in August.

The October 7, 2009 State Department Iraq Status Report, found that while Iraq’s oil production has continued to increase since the beginning of the year, its exports took a dip over the last two months. 2008 saw the highest average monthly oil production since the U.S. invasion. For that year, Iraq produced an average of 2.41 million barrels per day, and exported 1.84 million barrels.

Iraq is facing a drought again. Officially, it has been going on for the last two years. Unofficially the United Nations says four. The lack of rain, no government water policy, and population growth are the main causes, but Baghdad has been blaming its neighbors as well. Iran, Syria, and Turkey have all built dams that affect Iraq’s two main rivers, the Euphrates and Tigris, along with smaller tributaries.

The new quarterly report by the Special Inspector General for Iraq Reconstruction (SIGIR) includes the latest figures on Iraq’s unemployment and underemployment rates. The national averages were 17.3% unemployment and 29.4% underemployment. That compares to a United Nations survey conducted in January 2009 that found 18% of those questioned out of work and 10% underemployed.

As U.S. combat troops prepare to withdraw from Iraq’s cities, Anthony Cordesman, one of the top military analysts on Iraq from the Center for Strategic and International Studies, argues that the administration needs to build up support for a long-term presence there. This is a position that he has consistently called for.