With assault rifles and acetylene torches, roaming bands of robbers have nearly wiped out Iraq's once-booming banking system, posing one of the biggest hurdles to reconstruction efforts. Baghdad's financial district is a wreck of blown-out vaults, burned-out buildings and blocks of broken glass.On Friday, the CPA announced that the Iraqi Central Bank has now authorized four private banks to conduct international transactions and handle Letters of Credit. It maybe doesn’t sound like much, but it’s another important step towards the reconstruction of the country's economy.
Smoldering at the center of the chaos is the Iraqi Central Bank, where all nine floors have collapsed into a hollow shell. The U.S.-led Office of Reconstruction calls the situation dire, with one official conceding "there is little or no banking in place, no money flow."
And, as the Economist reports today, for some Iraqis at least, things are looking up.
For many Iraqis, living standards have already risen a lot. Boosted by government make-work programmes, day labourers are getting double their pre-war wages. A university dean's pay has gone up fourfold, a policeman's by a factor of ten.Despite the continuing attacks on US troops, things are getting better. Not fast enough for many of the administration’s critics, but they are improving.
Before the war, Kifah Karim, a teacher at a Baghdad primary school, took home monthly pay equivalent to just $6. Her husband earned $13 as a factory overseer. Today, with a combined income of close to $450, they no longer rely on gifts of meat from Mrs Karim's brother, a butcher, to buttress a diet dominated by government food rations. They buy 2-3 kilos of meat a week, and have recently purchased a new fridge, a television, a TV satellite dish, a VCR and a CD player.
