Analysis: Iraqis feel weight of high prices, few jobs

CAIRO AND BAGHDAD – When the top Marine commander in Iraq addressed criticism that US forces appeared to be losing the political, if not the military, fight in Anbar Province recently, he said that success rests as much on restoring a measure of economic stability and basic services as it does on ending Iraq's sectarian bloodshed.

"Economic development and the establishment of social order and public services ... are the conditions which must be set that will result in the support of the local people, and ultimately cause the defeat of this terrorist-backed insurgency," Maj. Gen. Richard Zilmer said earlier this week.

But Iraq's economy is weaker than at any point since the US invasion. Some estimate joblessness at 60 percent (the CIA shows a 30 percent rate for 2005), and prices for foodstuffs and basic goods have doubled - and in some cases tripled - since 2003.

Earlier this month, Iraq's planning minister, Ali Baban, said the rise in the consumer price index (CPI) - the basket of goods and services used to measure inflation - increased by nearly 70 percent in July compared with 12 months earlier. In July 2005, the CPI rose by 30 percent.

While the daily death toll frightens Iraqis - it topped 100 in the past two days alone - the country's economic grind is eroding the standards of living of millions of Iraqis and leading to mounting frustration in a country where the average monthly wage is less than $200.

Take Ahmed Obeidi, who saw an improvement in his life immediately following the war but now says he goes to sleep at night terrified about his family's prospects. Until 2003, he was a mason whose tiny daily wage - about $2 - nevertheless was enough to keep his wife and three children clothed and fed.

After the war, he picked up construction work on US-funded projects. Prices rose that first year, but his daily wages had soared to $10, allowing him to save small amounts for the first time in his life. But as security in Baghdad collapsed starting in early 2004, opportunities to work dried up.

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