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The Guardian - UK
The Guardian - UK
World
Mark Tran

Iraq needs an economic miracle

If an economy is projected to grow by 33%, investors would normally want to rush in with their money. That is a phenomenal figure, especially when you consider how economists swoon over 9% annual growth in China.

Unfortunately, the country in question is Iraq, where doing business can be hazardous to your health despite a rate of expansion that make it one of the world's fastest-growing economies.

This year's pickup also comes after a couple of dreadful years. According to preliminary estimates from the World Bank, Iraq's GDP shrank by around 4% in 2002 and by a further 31% in 2003, amounting to an estimated $13-17bn (£7.1bn-£9.3bn) or $480-$630 per capita.

The Iraqi economy is in a shambles, not just from the effects of war, which have ravaged the country's infrastructure - water, electricity, education, healthcare and transport.

International sanctions imposed in 1991 have also taken a toll on the economy, meaning that despite the country's rich resources, its human development indicators are now among the lowest in the region.

This is the grim economic backdrop to today's one-day international conference in Brussels, at which more than 80 senior officials from the UN, the EU and the US have been brought together.

The meeting is exploring practical ways in which the world can help Iraq, but will leave decisions on aid flows to a donors' meeting being held in Amman, Jordan, next month.

Participants also committed themselves to fulfilling around $32bn in pledges made at a donors' conference in Madrid last year.

Luxembourg's foreign minister, Jean Asselborn, said: "The challenges are numerous. We are here to show to Iraq, to the Iraqi people, that we are on their side in this difficult period of transition."

Ibrahim al-Jaafari, the Iraqi prime minister, appealed for assistance to fight the insurgency, which he called "a struggle of wills between good and evil", and to rebuild the country.

Mr al-Jaafari's appeal came amid an upsurge in violence that has left more than 1,000 Iraqis and 120 US troops dead since his cabinet took office in April. Fresh rebel attacks have taken place this week despite a US-Iraqi security crackdown.

Given the turmoil, it is amazing that the economy is growing at all.

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