Accuracy in Media

The War on Terror is being fought on many fronts simultaneously. One such front is the war of ideas and images. The recurring images of Iraq?the burning Humvee, the flag draped coffins of American soldiers, the proud militants cursing America, the faces of frustrated Iraqis, the looting of shops, the sabotaged oil pipelines, the bombed out buildings, the beheadings, the suffering children, the burning Humvee?are all very powerful.  When these images are repeated, as they most certainly are in the American media, they present a false perspective that the situation in Iraq is nothing but a hopeless quagmire. 

Hope is not lost for many of those individuals who have experienced Iraq first-hand.  An “untold story” is taking place in Iraq, said William Lash, Assistant Secretary of Commerce and Chairman of the Iraq and Afghanistan Reconstruction Task Force.  “For Iraq, the economic and commercial story is one that is not being properly told.”

Lash, along with Michael Fleisher, Coalition Provisional Authority Director of Private Sector Development, spoke at length about Iraq’s trade and investment opportunities at an event hosted by the Heritage Foundation last week.  During the presentation, both Lash and Fleisher emphasized the positive news relating to the newly emerging Iraqi economy.

When we watch CNN, said Lash, we think that Iraq is a poor county.  Iraq is not a poor country, but was made poor under the totalitarian rule of Saddam Hussein.  “A country that has the world’s second largest oil reserves, the seventh largest natural gas reserves, and a very talented and a very well motivated entrepreneurial class waiting to be unleashed, cannot truly be poor,” said Lash. 

Lash believes Iraq is an emerging market that provides all entrepreneurs with limitless investment opportunities.  Lash foresees the future Iraqi economy as not only being stable, but prosperous.

Lash’s comments focused on the present investment climate in Iraq, which he considers to be more favorable to foreign investment than the climate that exists in the United States.  The current economic conditions in Iraq allow for massive amounts of foreign capital to be injected into the Iraqi economy, said Lash.  He praises Iraq for its tax policy and banking reform in creating this open climate for investment.

Iraq’s tax policy, which establishes only a 15 percent limit on corporate taxes, attracts capital investment from foreign investors, said Lash.  As for Iraq’s banking industry, it is transitioning from a state dominated banking system to a flourishing private banking system.  Even sophisticated western banks?National Bank of Kuwait, HSBC, and Standard Charter of UK?are setting up shop in Iraq, providing Iraqis with the loans necessary to rebuild a country that experienced decades of economic oppression.  Because of Iraq’s acceptance of free market reforms, Lash said, “Investment is flowing into the country from around the world.”

Lash believes that this flood of foreign investment combined with the extensive reconstructive work completed by the CPA?over 20,000 projects of construction?will breed short-term economic success and set the foundation for long-term economic prosperity.

The United States has appropriated an additional $18.4 billion to aid Iraq in its road to economic recovery, but critics argue that only 2 percent of that total has been spent.  Critics would understand that spending is moving at a satisfactory rate, explained Lash, if they had experience dealing with Federal contracting procedures.  Lash joked: “Spending 18.4 billion dollars is not easy unless you are John Kerry and you are shopping for the weekend.  $18.4 billion to a lot of us is real money.”

For many in Iraq, the security situation there is no laughing matter, and critics argue that the lack of security presents the greatest obstacle to foreign investment.  Responding to this criticism, Lash spoke about his visit to a local Baghdad market located outside the safety net of the Green Zone.  Before he met with local merchants, Lash removed his bulletproof vest because it did not go well with his suit.  When chatting with the merchants about topics such as soccer and upcoming elections, Lash said, “I felt totally secure amongst the Iraqis.”

Lash admits that the security situation in Iraq poses a risk to economic investment, but he stresses, “It’s a manageable risk.”  Businesses around the world have always been able to successfully manage security risks, said Lash. 

No matter how cantankerous the criticism can get, Lash remains optimistic that the open investment climate in Iraq will lead to a booming Iraqi economy.

Mike Fleisher, who just returned from Iraq after the transfer of sovereignty from the CPA to the Iraqi interim government, spoke about the emergence of private enterprises in Iraq.  He emphasized that Iraq’s future prosperity depends heavily on the relationship that is developed between the Iraqi government and private markets.  “When the government is not intruding on private initiative, private initiative can carry a nation from tyranny to prosperity very quickly,” said Fleisher.

Macroeconomic data indicate that Iraq is transitioning from a state controlled economy toward a free market economy.  Since April 2004, over 1,000 Iraqi companies per month are registering with the Iraqi Ministry of Trade, which is the approximate equivalent to American companies incorporating here in the United States, said Fleisher.

Macroeconomic data indicating the emergence of private markets is one thing, but witnessing it first-hand is another.  Fleisher told the story of a new bakery he visited that was remarkably beautiful.  The owner of the bakery stressed that it had always been his dream to start his own business, and the present conditions in Iraq allowed for this to occur.  Fleisher was surprised that this entrepreneur opened up his bakery just a few blocks from a famous Baghdad pastry shop.

Fleisher asked the baker, “Aren’t you worried about the competition?”

The baker responded: “Competition!  That’s the whole idea.”  After hearing this remark, Fleisher believes that the Iraqi people understand the principles and benefits of creating a free market society.

Fleisher agreed with Lash that the press has failed miserably with their reporting on the Iraqi economy.   Fleisher concluded his remarks with a passionate call to all who listen: “I urge you not to let the way the press allows a single car bomb to drown out an entire booming economy distract you from the fact that freedom in Iraq is having the result that we hoped for and the results that we expected.”

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