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Iraqi Economy Staggers from Inflation, Fighting

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Iraqi Economy Staggers from Inflation, Fighting

Iraq

Iraqi Economy Staggers from Inflation, Fighting

Iraqi Economy Staggers from Inflation, Fighting

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  • <iframe src="https://www.npr.org/player/embed/6059908/6059909" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Violence and instability in Iraq have hit the economy hard. The basics of life are difficult to obtain, and when food and fuel can be bought, they are expensive. The country's central bank recently warned of massive unemployment, faltering growth and inflation of nearly 70 percent.

STEVE INSKEEP, host:

Iraq's prime minister has arrived in the capital of Iran. Nouri al-Maliki is making his first official visit since he came to office last May. He is a Shiite Muslim leader, and Shiites have developed closer ties with Iran since the fall of the Sunni-led regime of Saddam Hussein in Iraq. A year ago, Maliki's predecessor, Ibrahim al-Jaafari, also visited Tehran.

The visits are seen as an attempt to heal scars left by the eight-year Iran- Iraq War in the 1980s.

RENEE MONTAGNE, host:

Iraq's fragile economy is facing a new threat: stagflation. The country's Central Bank recently warned of massive unemployment, faltering growth, and inflation of nearly 70 percent. All this is making it harder for Iraqis to buy the basics. How hard? We asked one of our Iraqi journalists to tell us.

Here's NPR's Abdulla Mizead.

ABDULLA MIZEAD: So you want to know what life is like for Iraqis? Let's start at my home.

(Soundbite of a generator)

MIZEAD: This is a familiar sound in almost every house in Baghdad. With less than four hours of electricity per day, if any, for me, my wife, and daughter - and for other Iraqis - the generator has become an important member of the family. But this family member is hungry and it doesn't run on air; these things consume a lot of gasoline. I have not been lucky enough to see the gas station hose for the past three months. If I were to wait at a gas line that snakes around the gas station, sometimes for miles under the burning sun, and put up with the constant fights that these lines, it would cost me about $15 to fill up my car. But that's something my working hours and my patience cannot tolerate. Instead, I turn to the black market, an always-flourishing market set up on the sidewalks above the world's second largest oil reserve.

(Soundbite of traffic)

MIZEAD: The gas black market thrives the most when there are fuel shortages, a thing that has become almost habitual in this country. The price of filling my car fluctuates wildly, sometimes it's $30, sometimes it's $60. However, the instability affects much more than just cars and generators. The fuel crisis hits almost all aspects of Iraq's already shaky economy.

(Soundbite of barcode scanner)

MIZEAD: This is one of the biggest supermarkets in Iraq. Jalil Halid(ph) is the 30-year-old manager of the store. He says the price of gas dramatically affects his business.

Mr. JALIL HALID (Supermarket Manager): (Through Translator) I regret to say that the economic situation is going towards the abyss. Each passing day our profits go down.

MIZEAD: But the prices in Halid's shop keep going up. For instance, one frozen chicken uses to cost $3.50, it's now $5. A pack of eggs used to be $2.50, now it's $4.50, and the list goes on.

Between a dwindling security situation and a harsh rise in food prices, Halid's customers are decreasing.

Mr. HALID: (Through Translator) Even our regular customers have left the country. Others don't come because they're afraid to come. We lost half of our customers. Things were good when we opened this supermarket; it never reached this bad stage we are in right now.

MIZEAD: This supermarket is also finding it difficult to get food on its shelves. Halid explains.

Mr. HALID: (Through Translator) Most of the food wholesale companies don't send their salesmen because of the traffic crisis and the security situation. So we are forced to go and buy most of the food products ourselves.

MIZEAD: To buy the products, Halid has to go to Jammaliyah, the center of wholesale food in Baghdad; it's a neighborhood in Sadr City, a dangerous area where many Iraqis have been killed in car bomb attacks.

The sudden rise in prices is not limited to meat, chicken and eggs. Hidar Halifa(ph), a 30-year-old running a grocery stall, says he, too, has to sell his groceries at much higher a price.

Mr. HIDAR HALIFA (Food Vendor): (Through Translator) There's no gas, so if I want to go to the vegetable and fruits wholesale market, a taxi will cost me $7. The way back cost $20. There aren't enough products and the vegetables from the provinces aren't coming to Baghdad. All of this affects our business.

MIZEAD: Halifa lists the increase in vegetable and fruit prices.

Mr. HALIFA: (Through Translator) Two months ago, we used to sell tomatoes for 50 cents a kilo; it's now 90 cents a kilo. Peaches went up from $1 a kilo to almost $2. The changes in price are because of the gas crisis. Not just gas, but the conditions are bad in Iraq: no gas, no electricity, no safety.

MIZEAD: Halifa also risks his life to buy his goods; most of his vegetables and fruits come from Dura, another very dangerous neighborhood. Just buying a week's worth of groceries can cost me between 150 and $200, more than the average monthly salary of a government employee.

Solutions to these problems seem far beyond the short reach of the Iraqi government. Until they do something about the lack of security, gas, and electricity, prices for everything will keep growing, forcing my wallet to go on a diet.

Abdul Mizead, NPR News, Baghdad.

MONTAGNE: This is NPR News.

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