Iraq's Maxi Malls Marginalize Public Sector

Oil production has given the country a surplus of wealth, but the country's private sector continues to suffer from malnourishment. Instead of financing new businesses and supporting the build-out of a private sector, which is virtually non-existent in the country, the accumulation of wealth has been given the task of financing the government work force, which currently employs about one-third of the nation's population. Another beneficiary of this increased revenue? Super malls. "'Basically, Iraq is trying to build a consumer society, not on state capitalism like in China, but on socialism,' said Marie-Hélène Bricknell, the World Bank's representative in Iraq."

"Given the statist mentality of most top Iraqi officials and widespread corruption," writes Arango, "diplomats are generally pessimistic that the expected boom in government revenues will be used either to help develop a private sector or to pay for an ambitious public works program - something the country, where 40 percent of the population still lacks access to safe drinking water, desperately needs. Instead, experts worry it will finance more of what Iraq already has: corruption and a huge government work force."

This increasingly skewed spread of wealth essentially robs the nation from the ability to support itself, by not providing basic needs and services or nourishing a self-sustaining working class. "Building a consumer society on top of nothing is like building a bubble that will burst in the future," Ms. Bricknell said. With the shopping malls, she said, "you are putting a veneer over a rotting core, basically."

Arango, sensing a storm brewing ahead, is not optimistic for future conditions in Iraq, and claims that history may be repeating itself. "In 'The Modern History of Iraq,' he writes, "the American historian Phebe Marr described a similar trajectory in the 1970s when, she wrote, 'the era of prosperity rapidly created a consumer society dependent on government employment.'"