Iraqi shopkeepers blessed with post-war sales bonanza

Agence France-Presse (AFP) ^ | 10-22-03 | Deborah Pasmantier

[Oldeconomybuyer]

BAGHDAD, Oct 22 (AFP) - The rush of the Iraqis to buy imported products since the opening up of the economy after the fall of Saddam Hussein's regime has brought bliss to shopowners, but real danger to local industry already in bad shape.

Iraqis making money from working with the US-led coalition, civil servants who returned to their jobs and newly returned exiles have all contributed to a buying spree for imported electric appliances, cars and liquor.

"Business is very good. We are earning 10 times more than under the Saddam Hussein" regime, said Samir Majid, an electric appliances shop owner on the central commercial street of Karrada.

Shopkeepers on Karrada explain that businesses are making profits due to tax and customs breaks, in addition to the emergence of an avid client base.

Before the war, Majid every week sold four or five television sets at 225 dollars each. Today, he sells between 60 to 70 sets for 145 dollars a piece over the same period.

"Sixty percent of our clients work with the Americans. Also, since the end of the war, civil servants are living better and are buying everything they had to sell in order to survive under Saddam," he said.

"As for the exiles who are returning to Iraq, they have entire homes to refurbish," he said.

Sardar, the capital's largest company for new and second-hand cars, has doubled sales. A German-made car today sells for 6,500 dollars whereas Iraqis had to pay 10,000 dollars before the war.

"Taxes will be back and everyone knows that, so everybody is rushing to buy cars now, including students, industrialists and businessmen. Import companies are doing really well," said Sardar executive Wael Selman.

But in the meantime, domestic industries are having a hard time just surviving, after struggling through two fierce wars, 13 years of international sanctions and an economic policy which gave priority to arms production.

"It is clear that imported products have invaded the local market and that in the short-term this will harm national industries," said Egyptian lawyer Mohamad al-Rubt, who represents a number of international investment firms in Iraq.

At his Karrada shop, Majid does not even sell any Iraqi products.

"Nobody wants them anymore. Iraqi products have become more expensive than imported products because most of the local industries that were looted after the fall of the former regime are making up for their losses by hiking prices, " he said.

A large number of businesses are at a stand still. Public companies suffer from a lack of legislation, private firms lack investments and both can hardly operate with the power rationing that remains at 12 hours per day.

Electronic Industrial Company, the semi-private firm that made the local al-Kithara television sets, today only runs at 35 percent capacity, according to quality-control director Saffa Jamil.

But the situation does not seem to worry businessmen, who remain hopeful on the eve of the October 23-24 international donors' conference in Madrid for Iraq's reconstruction.

"When our production will re-start, clients will come back. They trust us: We have spare parts, experts and guarantees," explains Jamil.

A trade balance deficit is hardly an option in Iraq which sits on top of 112 billion barrels of oil and is home to 11 percent of the world's known oil reserves, second only to heavyweight Saudi Arabia, reminds the Egyptian lawyer.

"Patience is needed. Iraqi companies should learn to become competitive, but we have oil and money, and we can have a good industry," said Saleh al-Hadith, who runs a ceramics import company.

[mylife]

But in the meantime, domestic industries are having a hard time just surviving, after struggling through two fierce wars, 13 years of international sanctions and an economic policy which gave priority to arms production. "It is clear that imported products have invaded the local market and that in the short-term this will harm national industries,"

What a biased load of French crap!! Yup! This is hitting those Iraqi Car Manufacturers and Electronics giants where it hurts alright!

[Ragtime Cowgirl]

"Business is very good. We are earning 10 times more than under the Saddam Hussein" regime, said Samir Majid, an electric appliances shop owner on the central commercial street of Karrada.

~~~
French press goes on to hype the negative and to quote an Egyptian who's 'concerned' about local industries ahead of the international summit in Madrid.

If AFP contacted the Iraq Finance Minister or the CPA, they'd discover that Iraqi companies are being renovated and opening across Iraq - including cement, cotton, soft drink, brick factories - and, of course, oil.

Iraq Reconstruction Task Force
~~~

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[The Great RJ]

Obviously the Frogs haven't heard of the laws of supply and demand. Iraqi consumers aren't buying locally made TV's or other products because the local production of these goods cannot possibly supply the demand for these products nor produce them at a price consumers want to pay.

The socialist French consumer would gladly be drinking California or even Australian wines if the price was competitive to domestic products and not articially raised by protective tarrifs and French bureacracy.

[Alamo-Girl]

Bump!

[PhilDragoo]

Business if very good bump.

[windchime]

Bump!