The dramatic increase in violence in Iraq is now affecting
not only the lives of the public, but the economy as well. Some companies have
said their sales are down, they are cutting their hours, and transferring some
of their business to safer areas, while Anbar announced that it was losing
investors. These are all troubling signs, because for the last several years
the insurgency has been at such a low level that it did not affect the larger
society. Now that is changing, and the disruption of the economy is just the
latest sign that Iraq is heading towards an unsettling future.
Businesses in Baghdad’s Shorja Market have reported a drop
in sales due to violence (AP)
There are increasing reports that business is running into problems,
because of the increased violence. Al-Mada talked to a cosmetics company in the
Shorja Market in Baghdad that said that business was down since security had deteriorated. The owner was quoted as saying that people from southern and
western Iraq were beginning to fear travelling to the capital, because of all
the bombings and killings. A phone salesman told the paper that businesses in
his area were closing early for lack of customers. One merchant feared that
prices for basic necessities would start going up as people stored up on food
and drinks, so that they didn’t have to go out as much. Other companies said
that they were transferring some of their business to Kurdistan since it was
safer there. Al-Monitor had a similar story where firms in Anbar were switching to suppliers in Irbil out of fear of heading to Baghdad. A real estate
agent claimed that prices for houses had dropped 10% in the Karkh district of
the capital in the last three months due to the growing violence. A delivery
driver told Reuters that he would not go to certain areas of the capital,
because he was afraid of being killed for being a Shiite. Even a spokesman
for the Interior Ministry blamed the worsening security situation for cutting
down on commercial traffic in and out of central Iraq. Finally, Azzaman mentioned
a senior official from the Anbar provincial council who said that 23 foreign companies had fled the governorate since attacks went up there. While
anecdotal in nature, these stories could point to a troubling trend. During the
civil war period of 2005-2008 most of Iraqi society fell apart. Businesses were
barely open, families didn’t want to send their children to school, people
couldn’t go to their jobs, and government offices barely operated. Iraq is not
to that point yet, but the situation is definitely getting worse. That is
leading to growing apprehension amongst not only the public, but businesses that
are beginning to change their operations, and cut back on their work as a
result. That can only be bad for the country, which needs a healthy economy to
pull itself out of decades of wars and sanctions. Renewed conflict can only set
that back even more.
What the future holds for Iraq is the most uncertain it has
been in several years. Bombings are increasing, the monthly death toll is up,
there are stories spreading that militias are back on the streets, and fear and
tensions are all going up as a result. Business is the latest casualty as it is
becoming apprehensive of the situation, and is changing its practices as
result. If stores begin to be shuttered and customers are afraid to venture out
of their homes that could only be a foreboding sign of what may lie ahead. Iraq
is not in a civil war yet, but things look to be getting worse before anything
improves.
SOURCES
Hameed, Nouriddeen, “Foreign firms
flee restive province,” Azzaman, 5/20/13
Al-Mada, “Violence affects “the
economic heart of Baghdad” by strokes and warnings of economic “paralysis,””
5/31/13
Markey, Patrick and al-Salhy, Suadad, “Surging violence,
sectarian fears haunt Iraq,” Reuters, 5/30/13
Al-Shaher, Omar, “Fears of Civil
War Cripple Baghdad Commerce,” Al-Monitor, 5/30/13
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