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Iraqi business optimism about Iraq's future
Iraq, Economics, 10/1/2005
An international survey of more than 600 Iraqi business owners and managers suggests that a majority of them are optimistic about Iraq's economic and political future.
The Center for International Private Enterprise (CIPE) and the Zogby International polling firm, both based in Washington, conducted the survey of 641 owners and managers of Iraqi small, medium and large businesses in five Iraqi cities: Baghdad, the capital, Arbil and Kirkuk in the north and Hilla and Basra in the south. The fieldwork for Baghdad, Hilla, Basra and Kirkuk was conducted from July 17 to July 25; for Arbil, it was conducted from August 28 to August 30. The results of the survey were released in Washington September 27.
More than three-fourths of the business people said they anticipate growth in Iraq's national economy during the next two years, although 45 percent of them indicated that they do not expect the profits of their concerns to climb during the next six months, according to the survey. Three percent of the respondents said they believe that the Iraqi economy will shrink.
The survey indicated that business has grown throughout most of Iraq since the end of Saddam Hussein's regime in 2003. More than four in 10 of those surveyed said they have added employees since that time and about three in 10 said the number of their employees has not changed, for a total of 71 percent saying their employee figures have grown or remained stable.
The percentage of business leaders expressing optimism about Iraq's economic future -- 69 percent -- is unchanged from the results obtained in a similar poll taken by the same groups a year ago. Optimism was highest in Arbil in the far north (99 percent) and in Basra in the far south (92 percent). The optimism quotient for Baghdad and Hilla was in line with the national figure. In stark contrast, only 9 percent of business people in Kirkuk said they were optimistic about Iraq's economic prospects.
As for Iraq's political future, the poll results indicated that 60 percent are optimistic, 9 percent pessimistic, 26 percent neutral and 6 percent unsure.
The level of optimism reached 93 percent in Arbil, followed by 73 percent in Hilla, and 71 percent in Basra. Among business leaders in Baghdad, 58 percent expressed optimism about the country's political future. In Kirkuk, the optimistic assessments accounted for 7 percent, the pessimistic for 24 percent and the neutrals for 55 percent.
The poll turned up a number of other indicators of the state of the Iraqi economy. Almost half the respondents said the new Iraqi government represents and protects their interests. One in five disagreed with that statement.
The Number 1 way the Iraqi government could help the business community was to get the security situation under control, according to 33 percent of the business leaders. That figure rose to 45 percent in Baghdad. Fifty-seven percent of the leaders indicated that security has improved since the fall of Saddam Hussein, but 38 percent said it has worsened.
A substantial majority of the business people -- 71 percent -- is optimistic about the prospects for nationwide stability following the elections, scheduled for December. And 84 percent of them said that economic stability in the regions will be enhanced by the elections.
The poll results showed that an overwhelming 82 percent of Iraqi business leaders believe that a democratic and diverse government will bring economic benefits; 62 percent said the business community is able to influence government policy.
In a sweeping change from the results of the poll taken in 2004, most of the business leaders named the political parties they thought best represent them in this year's sounding. Only 13 percent of the respondents declined to name the party they support. In the poll taken in 2004, 72 percent of the respondents did not express a preference for a political party.
Two years after the fall of Saddam Hussein, the Iraqi economy is based primarily on cash, with seven in 10 business owners saying it is the basic means of exchange they use, according to respondents to the poll. Bank transfers are preferred by 24 percent of the business people, and credit cards are used by 1 percent of the respondents to pay for goods and services, the poll showed.
Fifty-three percent of the business people said they never have taken out loans to start or expand their firms, the poll showed. Another 8 percent said they attempted to receive loans but their application was rejected. Twenty-nine percent said they have borrowed money successfully.
More than eight of 10 business people (82 percent) said they welcome opening Iraq's borders to international business. The Gulf states received the most endorsements (23 percent) as the place that offers the best commercial opportunities. In descending order were Syria (13 percent), followed by Lebanon, Europe, Turkey, Jordan, the United States and Iran.
The employment of women in Iraq has surged during the past year, according to the poll. In late 2004, 43 percent of the business people said they employed women. In the 2005 poll, the figure was 63 percent. The percentage is even higher in Baghdad (68 percent) and highest in Arbil (91 percent).