Baghdad: Economic Boom Town?

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The most obvious accomplishment of the U.S. troop surge in Iraq has been a sharp decrease in violence. But the surge has led to other benefits as well -- including a big upswing in the Iraqi economy.

Last year at this time, Baghdad was one of the most dangerous cities in the world. Although it's still not completely safe, the Iraqi capital is earning a new reputation as an economic boom town.

Click play for Erick Stakelbeck's report and for Pat Robertson's comments about the Iraqi economy.

Additional U.S. troops have brought a level of security and prosperity that seemed unthinkable not long ago. Less violence has allowed merchants to reopen their businesses and shoppers to flood the streets. It's also encouraged an entrepreneurial spirit.

A family-owned juice bar has opened three Baghdad branches in the past year alone. The owners hope to soon take their business nationwide.

"When it's safe outside, business is better," the owner of Mesh-Mesha juice bar said.

The sense of optimism in the streets is reflected in the Baghdad stock exchange. Share prices have gone up more than 20 percent over the past year, and 94 companies are traded now, up from just 15 in 2004. Real estate has also gone up at least 12 percent.

And Iraq's vast oil reserves are providing another big financial lift. Iraqis are looking to produce up to 2.2 million barrels per day in this time of record oil prices.

"The potential is jaw-dropping. The country could produce Saudi levels of production," said Robert Powell with the Economist Intelligence Unit.

Experts predict the Iraqi economy will expand by as much as seven percent in 2008. But those gains depend on violence staying down. A few recent bombings in Baghdad show that Iraq isn't out of the woods just yet in its war against terrorism.

"As long as there are successes on the level of the political process, in national reconciliation and in the economy, such successes will certainly provoke people who are against any development in this country," Husham al-Sadr said.

Oil revenues have Iraq headed toward a huge budget surplus. Meanwhile, the U.S. Is facing record budget deficits, partly due to the rebuilding of Iraq.

The U.S. has spent some $45 billion dollars in Iraq -- and some lawmakers say its time for the newly prosperous Iraqis to start paying more of their own costs.

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CBN News
Erick Stakelbeck

Erick Stakelbeck

CBN News Terror Analyst

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