Truck and Barter: Iraqi Macro Update

October 23, 2004

Iraqi Macro Update

By Paul

The IMF has a new report on Iraq:

… Iraq suffered from severe economic mismanagement, and over a decade of international sanctions. GDP per capita is estimated to have dropped from over US$3,000 in the early 1980s to as low as US$200 in the early 1990s. Although GDP per capita recovered somewhat to an estimated US$800 in 2001, it fell again to about US$500 in 2003 as a result of the most recent conflict. Iraq’s human development indicators, which had exceeded the regional average in the early 1980s, are now considered among the lowest in the region. Unemployment is running close to 30 percent and underemployment is pervasive. Furthermore, about 60 percent of the population is thought to depend exclusively on the government’s food distribution system for subsistence.

Brad Setser thinks the report is a gold-mine. He notes two striking facts:

1. In 2004, the amount Iraq will spend importing (yes, importing) refined petroleum ($2.1 billion) will exceed the amount Iraq received in grant aid from the world (transfers are projected at $2.05 billion)
2. Iraq is a country where government spending is more than a 100% of gross domestic product (2004 budget is $22.6 billion, 04 GDP seems to more like $21.2 billion)

No wonder Iraq is such a mess.

Posted at October 23, 2004 10:35 PM

Comments