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Last Updated: Tuesday, 24 February, 2004, 08:59 GMT
Glimmer of hope for Iraqi economy

By Mark Gregory
BBC World Service business correspondent in Baghdad

Iraq market
The entrepreneurial spirit is returning to Baghdad
The widespread perception is that Iraq is a place of disintegration and chaos, and there certainly is a fair amount of that around.

But that's not the complete picture by any means.

In fact, the first tentative signs of an economic recovery are beginning to emerge.

Baghdad's Karada district - where you go to buy electrical goods or second-hand cars - is fairly buzzing with entrepreneurial activity.

The pavements outside shops are piled high with huge TV satellite dishes, and there's also a brisk trade in mobile phones and computers.

Clearly consumers - those who've got money - have the confidence to come out and spend it.

But also, as everywhere in Iraq, there's an extraordinary pervading sense of uncertainty.

Security threat

I got a flavour of this when I spoke to a mobile phone dealer

"Business now is very good - we sell phones and rent phones to people. But actually the (security) situation is very bad here," he told me.

"We have to keep guns with us always, because there is no safety here. About six or seven guys work with me, all with guns."

As if to underline his point, gunshots rang out in the background during our conversation.

Security is indeed an all-pervasive factor.

We tend to travel around in an armoured vehicle, and the hotels where Westerners stay are surrounded by huge concrete blast screens because of fear of attack by rocket-propelled grenades.

The small talk among Westerners is all about incidents in which people have been killed.

And the Iraqis, too, talk constantly about looting and kidnapping.

Growing again

But officials from the Coalition Provisional Authority ruling Iraq say that the economy is beginning to pick up.

Unemployment has come down from perhaps 70% of the workforce after the war, to an estimated 30%.

That may sound like a high level, but it's certainly a lot better than it was.

The economy is said to be growing at between 20% and 30% a year, so it's probably the fastest-growing economy in the world, albeit from a near-collapsed base.

There are very few rules and regulations and it's difficult to enforce contracts.

But on the other hand, there is at least some business being done, and there are some people with money.

At the same time, there are a lot of other people who feel alienated.

They don't have work, and their future, as they see it, is rather bleak.

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