For Iraq's Educated Elite: Tales of Stock Market, Kitsch Market
BAGHDAD, IRAQ — From his position on the sidewalk, behind a rickety table spread with a hodgepodge of sports equipment, Hussein Ali says he can feel the frustration every day along Baghdad's Republic Street.
Long forgotten is Mr. Ali's bachelor's degree in mechanical engineering from Baghdad University. For four years he worked as an engineer, before the 1990-1991 Gulf War and the imposition of United Nations sanctions.
But his income then - which came to $450 a month, "enough for two months," he remembers wistfully - would today be worth only about $4 a month because of of the collapse of the Iraqi dinar.
Of Ali's class of 120 engineers, only six or seven still sharpen their pencils every day to do the work for which they were trained.
Seven years of sanctions have cut back the food supply and helped cause unbridled inflation. Iraqi families are selling household goods to survive.
Iraq's prewar professional classes have been hit hard. "One engineer colleague is selling ice cream in the streets," says Ali, a father of three. But Ali's own situation is hardly better.
"Business is not good," he says, shifting two pitted pool balls on his table of offerings. "There is nothing but frustration."
Ali pitches a child's swim mask, soccer balls, and a pair of boxing gloves. There are Ping-Pong paddles, badminton birdies, and one purple roller skate. Small tins of lead air-rifle pellets from Iran sell well, he says, because "people are hunting for their food, in their gardens."
In one flea market off Republic Street, even a kitschy plastic clock with a 3-D image of an ostrich wearing a cap and a striped bow tie is up for grabs.
"There is a breakdown of society, and a staggering loss of hundreds of thousands of professional people," confirms a senior UN official in Baghdad. There are more street kids, more prostitutes - once almost unheard of in Iraq - and mothers are increasingly forced to work, he says, making breast-feeding in many cases impossible and exposing newborns to unclean water mixed with infant formula.
Iraq's economic decline began well before the Gulf War, however. Eight years of war with Iran in the 1980s - during which Iraq spent up to 75 percent of its GDP on the military, chalked up $80 billion in debt, and saw much of its oil export capacity damaged - sent annual per capita income tumbling from more than $8,000 to $2,108. That figure was cut in half again by 1995, and now the effect of sanctions has become Iraq's chief economic problem.
Despite the languishing poor on the streets, however, Baghdad's stock exchange is doing a vibrant business. Shares in more than 90 companies are traded twice a week, though the currency collapse has left some shares almost worthless.
Investors in suits and ties line up in the new stock-exchange building, and sometimes use opera glasses to keep tabs on share prices that cover a gamut of companies. Brokers charge around the floor, wiping prices off white boards with ink-stained hands, and writing in new bids.
The activity here, with a modest volume that can reach $67,000 each session, contrasts with the lethargy on the streets.
"As an economist, this is a joy because your really get to see how a market works," says Hassan Aldahan, an Iraqi citizen who recently graduated from Boston University and came back home to get married. He runs his own trading company, though his daily income is officially $2 a day, plus a commission of just 1 percent on deals. He fills in the gaps by running an art gallery, too.
"At this age, there is no way I could ever be the director of a stock market agency anywhere else," he says. Despite the situation for many, he says, "a lot of families are optimistic" that Iraq's economy will turn around and sanctions will be lifted.
The recent US-Iraq standoff barely affected trading, says Sabih al-Duleimi, head of the stock exchange. "We are used to such problems created by the Americans," he says.
The scene at one furniture auction illustrates the decline of living standards for those who can't play the market, however. An auctioneer holds aloft a cheap German television set. The owner was asking 130,000 Iraqi dinars, or $87. But the highest bid came to only $30. It goes unsold.
The owner, who asked not to be named, cannot earn enough to satisfy the needs of his wife and three children.
"I have financial problems," he says, matter-of-factly, hoisting the TV to his shoulder. "I'm desperate for the money, and this TV is the last thing I have to sell."