Friday, January 06, 2006

Iraq gets bitch slapped by IMF

Gas lines form in Baghdad as gas prices rise.

In one of the bigger unreported stories that the mainstream media likes to ignore, the International Monetary Fund is directly responsible for additional misery for the Iraqi people.

As our Gentle Readers are probably aware, there have been riots – with the rioters being shot by government troops - and general feelings of dissatisfaction with the Iraqi government recently over the reduction of subsidies that have kept the price of oil products in Iraq low and affordable. Previous to the price hikes, Iraqis paid about 5c per gallon for gasoline, and comparable prices for fuel oil (kerosene, etc.) for lamps and generators and the like. As the average wage in Iraq (for those with jobs) is about $100 a month, this is already expensive oil for the typical Iraqi customer.

However, as a condition of a $685 million dollar loan from the International Monetary Fund, as reported
recently by The Los Angeles Times, the government was forced to raise the price of gasoline to 65c a gallon, an exorbinate price for the working stiffs in Iraq, with additional raises due shortly that will bring the consumer’s cost to about $1 a gallon, in line with costs in neighboring countries like Dubai and Saudi Arabia, where the average income is much higher.

While this doesn’t seem like a big deal here in America, where we get pissed about gas hikes, but don’t usually riot over it, this price hike is on the order of a 400 per cent increase, comparable to raising gas prices here at home from $2.15 per gallon to $18.49. That’s $221.28 to fill up the tank in a Honda Civic.

That just might cause some riots here in LA, for starters, and I wouldn’t blame the rioters.

On the whole, this is a terrible blow to the Iraqi economy, putting them in a Catch-22 situation. The fiscal tightening that the IMF is mandating is a fiscal bitchslap in the face, as the economy that the IMF is supposed to be rescuing is crashed because of the freaking war that was started by the IMF’s primary backer, the United States.

How’s that for a lesson in bringing freedom and democracy to the benighted Arab?