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Iraq: Business Slows After Postwar Boom

A year ago, the streets of Baghdad were bustling with commercial activities. Now, it appears, those days are gone.

Baghdad, 21 August 2004 (RFE/RL) -- Baghdad trader Joma Khafaji remembers the weeks following the war as being good for business.

"Right after the war, every company that was dealing with Iraq cut its prices because there were no custom duties, no taxes, no borders," Khafaji said. "Things were easy. Something that used to cost $500 was slashed to $350. And a lot of Iraqis were also curious to see what is on the market because they were deprived of [those goods] for years."

Khafari and other traders say U.S. forces and administration gave a further boost to local business by buying a lot of the goods they needed from local markets.

They say the transitional government of Prime Minister Iyad Allawi has not started the same kind of shopping spree yet.

Traders and merchants say the worsening security situation is keeping many customers away.

Several times in the past few months, civilians have been killed or injured by rockets and mortars that have landed in commercial areas of Baghdad.
"People see the explosions and killings, and they are afraid to go out." -- Baghdad store manager.

"The security is not good," said Nahez Abdel Wadood, who manages a shop selling air conditioners. "People see the explosions and killings, and they are afraid to go out. People used to stay out till 8, 9, or 10 p.m. Now no one goes out after 7 p.m."

Traders say tenuous security has also prompted many Iraqis simply not to spend their hard-earned savings, in case they need funds for emergencies.

Perhaps one of the biggest reasons business is slow is that most of the "hot" items last year were electronic goods such as television sets, refrigerators, deep freezers, and air conditioners.

But much of Baghdad still suffers from numerous power cuts, and many Iraqis say there is no reason to buy these times if they cannot use them.

Iraqi dealers also say imports of automobiles have dwindled close to zero since the authorities reintroduced import taxes.

But despite all the problems, Iraqi merchants remain hopeful that security will improve and business will pick up.

Johnson Dekhla, a supermarket manager, is one of the optimistic ones.

"I am hopeful the situation will improve," Dekhla said. "Iraqis, unlike people in some other Arab countries, are patient people. We suffered for 40 years under Saddam and survived. Things will get better."

For the latest news on Iraq, see RFE/RL's webpage on "The New Iraq".