Iraqi Economy To Grow 10 percent in 2006, U.S. Official Predicts
Microenterprise, loan programs to spur job creation, State's Speckhard says
By Phillip Kurata
Washington File Staff Writer
Washington -- The Iraqi economy is expected to grow 10 percent in the coming year as reconstruction efforts begin to show results and tens of thousands of new businesses begin operating, according to a senior State Department official.
Daniel Speckhard, who holds the dual titles as the State Department's director of strategic governance and economic effects, as well as director of the Iraq reconstruction management office, said the Iraqi economy is poised for a 10 percent growth surge after expanding at roughly 3 percent in 2005.
Speckhard, briefing reporters via telephone from Baghdad, February 9, said 30,000 businesses formally were registered in Iraq during the past year, and that does not count informal business activity.
To create more jobs, especially in areas where insurgents have been active, reconstruction authorities have launched microenterprise and loan programs and short-term job projects, such as road construction, Speckhard said.
Speckhard said the most pressing needs are providing enough electricity, water and sewage disposal, as the economy expands.
Electricity shortages are most apparent in Baghdad, where during the period of Saddam Hussein’s rule, power was available 20-24 hours a day, he said.
The capital has less electricity now than before because power has been distributed more evenly throughout the country and because some insurgents have attacked electricity facilities near the capital as a means to undermine support for the central government, he said.
Two power projects scheduled to begin operation within the next two months are expected to provide Baghdad with three additional hours of electricity per day, he said.
Protection of the 17,000 lines of oil and electricity lines has improved as a result of growing capacity of the Iraqi army and improving rapid repair skills, he said.
"[W]hat we have done is focus on the areas where we're having the biggest problems in terms of breaks and directing additional Iraqi army support to those particular elements, trying to improve the protection services of the actual ministries that are responsible for those, and also ensure that we have, again, the rapid repair, redirecting and ensuring that we have the supply of temporary towers that can move in," Speckhard said.
Reconstruction projects have brought clean water to several million Iraqis and sewage treatment to more than 4 million, he said. During the rule of Saddam Hussein, the water and sewage lines corroded, leading to seepage between them.
"[T]hat's a big challenge and what we want to do there is focus on that at the community level to try to get those projects to start to deliver at a community level and not try to fix this in all one huge swoop," he said.
OIL PRODUCTION
With regard to oil production, about 75 percent of Iraq's current production is the result of U.S.-sponsored projects, he said. Lack of refined oil products causes problems with electricity production because improper fuels cause frequent plant breakdowns.
"[T]hey end up switching to different types of fuel to keep the electricity generation going. That, in turn, ... causes more maintenance," he said.
The official said the reconstruction strategy for Iraq has shifted away from large, complex design/build projects, for which the U.S. government assumed the cost and risk. He said three-fourths of the future projects will be smaller and more visible.
"Now what we want to do is begin showing at the community level quick, high-impact, visible projects that can help affect the support for local community and provincial leadership and the federal government," he said.
Speckhard said U.S. reconstruction authorities are working with Iraqi provincial reconstruction development committees, which determine their priorities and essential services.
"Then we use our money to support them in their priorities," he said.
Looking at education, 30,000 teachers have been trained and 8 million new textbooks have been put into schools, he said.
With regard to improving health conditions, Speckhard said 5 million children have been vaccinated against polio and the rate of measles has declined.
For addition information, see Iraq Update.
(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)