Thursday, December 30, 2004

Wonders of a free market

Today's NYTimes has an article on Iraqi banks, and, surprisingly, their outlook borders on optimism:

Despite the continuing war and political uncertainty, Iraq's long-suffering financial industry has begun creaking to life.

The revival is being led by some private Iraqi banks that have begun using new economic rules, harnessing the surge of reconstruction money and, in some cases, forging foreign partnerships.

The article gives some insight into what it's like to conduct business in Baghdad, and while it doesn't paint a pretty picture of the current situation, it doesn't forecast a bleak future either.

But some analysts said that Iraqi banks, at least the private-sector ones, will soon be more agile, modern and profitable. Mr. Kubba said Commercial Bank had already begun taking steps toward introducing Swift codes, bank machines and even credit cards. And most of the banks have invested in computer training, either in Iraq or abroad.

"Many more changes in the money market, capital market and the banking business are envisaged, and it is now only a matter of time - short rather than long," Mowafaq H. Mahmood, managing director of the Bank of Baghdad, one of Iraq's largest private banks, wrote in a report published by the Arab Bankers Association of North America.

Even if you have no vested interest (time or money) in Iraq, the article provides perspective on how things we in America have come to rely upon, such as ATMs, Internet banking, and the lack of weapon check points outside our banks, are unheard of here.

For anyone who is interested in investing in Iraq, I'd say you could safely call this the ground floor!