Iraq’s future still going up in smoke

The Iraqi people have never benefited from the oil their country’s so rich in. It’s always been abused. It’s always been used to buy weapons, and persecute the people.’ Bayan Rahman, chair of the Kurdistan Development Corporation, hopes her war-torn country is finally ready to break with that sad tradition, and build a thriving free market economy. But with bombs still exploding almost daily in Baghdad, sabotage threatening every dollar spent patching up the country’s infrastructure, and the US government about to pull out its cash, economic normality is a long way away.

..Most pressing are the costly fuel subsidies. Iraqis, rich and poor alike, are used to paying $0.03 a litre for their petrol: the government effectively gives it away. The higher the global oil price, the more it costs to keep prices at rock bottom. And a thriving black market means that much of the benefit goes to the enterprising, rather than the poor (and in many cases the petrol that actually reaches people is watered down).

The Observer