Tuesday, February 22, 2011

Iraq; an oil curse and a corruption curse

Of all of the countries that have the "resource curse" Iraq is amongst the worst. A fifth of all Iraqis live below the country's poverty line. This is despite unimaginable wealth underneath their feet with the vast oil reserves.

Iraqi government officials believe that the poverty level will decrease over time with the policies they have in place. But observers say as long as the government is full of corruption there will be no dropping of the poverty line.

From this Reuters story that we found at Ahram Online, we find out more about the poverty situation in Iraq.

"Poverty in Iraq is shallow," Deputy Planning Minister Mehdi al-Alak says during an interview in his office on the banks of the Tigris river. "Most people are close to the poverty line ... so if policies and procedures are followed, the rate will decline."

"It is not very difficult (to reduce poverty) in Iraq."

On paper, he would seem to be correct: the country's vast energy stores -- Iraq has the fourth-highest level of proven oil reserves in the world -- all but guarantee it will have a steady and increasing source of income for decades to come.

The country was not always grappling with such a problem. A UN report released at the beginning of the year notes that, "In the past, Iraq was regarded as one of the most developed countries in the Middle East," but the organisation's Arab Human Development Report rated Iraq 17th out of 21 regional countries in terms of human development in 2005.

"Wars and sanctions have contributed to a marked deterioration in Iraqis' standard of living in recent years," this year's UN report noted.

But experts lament that Iraq still has glaring problems that make it difficult to envision poverty levels declining at the rate the government hopes, from 22 percent now to 16 percent by 2015.

"Even though it is shallow and a wide segment of the population could be brought out of the poverty margin, unless there are sustainable measures, they will easily fall back," says Khalid Muhammed Khalid, an Amman-based Iraq programme analyst with the United Nations Development Programme.

Khalid notes widespread graft -- Transparency International rates Iraq as the world's fourth-most corrupt country -- and insufficient expertise among officials, especially at local and provincial levels, mean poverty alleviation could take longer than expected.

He adds that wider reforms will be needed rather than simply increasing people's incomes to better combat poverty.

"If you do not provide proper health, education and infrastructure services, then what is the meaning of more money?" he asks.

1 comment:

Per Kurowski said...

And now oil extraction is thought could become twice as much as during Sadam Hussein