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Sept. 19: Karrada Street

By James Rupert | Staff Correspondent

10:12 AM EDT, September 20, 2003

Not much is working in Baghdad's economy these days. But one sudden boom is in luxury appliances and the Internet. On the main street near the hotel where Newsday keeps its office here, cartons of refrigerators, stoves, TVs and air conditioners are piled high from the storefronts to the curb. Sometimes, you can hardly find the shop owner in the maze of cartons.

The main thing fueling this is that the American occupation authorities are paying salaries - typically $120 or so per month - to civil servants. Plus the years of UN sanctions have ended, opening Iraq's borders to importers. Also, there isn't enough of a government just now to collect taxes, and the Iraqi dinar has risen in value. It is now 2,000 to the dollar. (So when you change $100, you get a sackful of Iraqi notes in return. I hefted my sack when I changed money the last time, and I estimate that the more useful exchange rate for the dinar is about $70 a pound.)

The other factor was explained to me by Abdulqadar Safar, a leather merchant. His shop is one of at least a dozen shops in one stretch of Karrada Street that advertise belts, leather jackets and coats, etc. But none of that is to be found. All the leather sellers have stuffed their shops instead with electronics and appliances. "For the past 10 years, everybody who worked for the government in Iraq was having to sell his stuff - TV, furniture, kitchen appliances - just to survive," Safar said. "Now, the American paychecks are 10 times what the Saddam paychecks were, and they're coming on time each month. So everybody is out buying new things to replace what they lost before."

This river of money - startlingly deep and rich on Karrada Street, although it represents a bare trickle within the moribund economy of Iraq - brings crime, of course. Bandits are stepping up attacks on trucks bringing goods in on the long desert road from Jordan. But demand is so high that the merchants are absorbing the losses, and still making money.

This buying spree by the bureaucrats does nothing for the vast bulk of impoverished Iraqis. But if you're feeling depressed about how the occupation is going, a little stroll along Karrada street is a positive hint about what will be possible if the Iraqi economy gets rolling.