Where did the cash go?

Three years on and US$21billion later, Iraq's economy remains a mess. Do you remember where you were on April 9th 2003? The chances are that, like me, you were in front of a television screen cheering. Regardless of your views on the American invasion of Iraq, the bringing down of Saddam Hussein’s statue at Firdous Square was an emotional moment. Not only did it suggest the end of the war, but just as importantly, the end of years of economic misery under the former Iraqi dictator.

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By  Anil Bhoyrul Published  April 2, 2006

Where did the cash go?|~||~||~|Three years on and US$21billion later, Iraq's economy remains a mess. Do you remember where you were on April 9th 2003? The chances are that, like me, you were in front of a television screen cheering. Regardless of your views on the American invasion of Iraq, the bringing down of Saddam Hussein’s statue at Firdous Square was an emotional moment. Not only did it suggest the end of the war, but just as importantly, the end of years of economic misery under the former Iraqi dictator. Three years on, those of us who cheered have been proved wrong on both counts. True, there were millions around the world who predicted that bringing down Saddam would not bring an end to violence. But who really thought that US$21 billion of American money would have little or no impact on the lives of ordinary Iraqis? The figures get worse by the day. Residents of Baghdad are lucky to have electricity for more than six hours a day. Petrol queues average eight hours – this is in a country with the world’s third largest crude reserves. Electricity generation in December 2005 hit 96,330 MWh. Before the war, it was 95,600 MWh. Before the war, 12.9 million people had access to water resources and sanitation, but that number fell to 8.25 million by late November last year. What happened? It is a question most Iraqis are right to ask every single day. The answers, depending on how you ask, vary. Some experts suggest most of the US$21 billion has gone on security costs: it’s not the fault of the US that the insurgency has grown. Others argue that too much has been paid to contractors looking to make fast cash and slow progress. Whoever you blame, the victims are the same: ordinary Iraqis. But there may be a glimmer of hope. Prior to the war, 2.5 million barrels a day of oil were pumped. Today the figure is 1.7 million. Iraq has a capacity to pump 3.5 million barrels – more than double its present output. However, the country’s oil refineries need urgent upgrading. Doubling the production would reduce inflation, unemployment, fuel shortages and currency instability. America should channel a large portion of future aid directly to the refineries. This is the first key to Iraq’s economic future. ||**||Space is the limit|~||~||~|This week we feature the Arab world’s attempt to join the space race, with the announcement that the UAE is to put an astronaut into space. That comes courtesy of Virgin Galatic, though the astronaut has paid US$200,000 for the privilege. So it is hardly an engineering breakthrough of epic proportions for the Arab world to celebrate. More like a rather lucky, very rich individual having their dream come true. However, the GCC is right to use the news as a platform to join the space age. So far, Virgin Galactic has ploughed nearly US$400 million into the project to develop commercial space flights, but has found only New Mexico as an acceptable launch pad. American politics, bureaucracy and competition rules will probably prevent Virgin Galactic getting much further in the US. The GCC must take advantage of this, and start funding projects that will lead to commercial space travel. There is a huge gap in the commercial space market, which Arabs can very quickly fill. The rewards – both technological and kudos wise – are immeasurable. ||**||Safety first|~||~||~|Next year the A380 superjumbo will take to the air, becoming the backbone of the Emirates Airline fleet. Potential passengers may however already be having second thoughts. Last week, emergency evacuation tests on Airbus’s new A380 ‘superjumbo’ left one man with a broken leg, and 32 others injured. Gustav Humbert, Airbus’ managing director, stressed that the injuries were minor and hailed the drill as “a very great success”. That doesn’t sound very comforting. If anything, it is dismissive of genuine concerns, and hardly surprising that several passenger groups have been outraged. Airbus has so far sold 159 of the superjumbos, to 16 different airlines. But that doesn’t allow arrogance. It should beware: Rival Boeing has announced plans to produce an expanded version of its 787 Dreamliner aircraft. It has other so-called “imaginative” announcements to follow this year. The war in the air between Airbus and Boeing is far from over.||**||

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