Doing Business in Iraq

An article in the Atlantic reports that since the fall of Saddam in Iraq, Iraq has become one of the worst countries in the world for entrepreneurship. Frank Gunter, an economics professor and a former economic advisor to US Military operations in Iraq, believes that the US invasion into Iraq caused an environment that has been counterproductive to encouraging economic opportunity. He said that under Saddam, "entrepreneurial corruption" existed, and compared this to 1940s Chicago, by stating that one always knew who had to be paid off; a corrupt hierarchy but stable and predictable nonetheless. This has been since been disrupted and as a result, Iraq currently ranks 174th out of 183 countries worldwide for starting a business. The article details the process required for starting a business which requires an approximate 77 days and $2,000 in initial start up costs and licensing paid to the government (compared to an average of 6 days and $675 in the US).

This crushes the entrepreneurial spirit and thus private economic growth in Iraq which has been lackluster to begin. According to this article, there are few Iraqis that want a job outside of the government. Government jobs pay more, require less actual work, has more benefits, and you can't be fired from them. Consequentially, Iraqi's want more government jobs, and the fledgling democracy feels the need to create more jobs in order to keep the population happy. However since there is a lack of private sector to fund the government, this is expected to lead to big discrepancies in an already shaky Iraqi (and global) economy and political environment.

Brianna Howell