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The Economy Of Iraq

In 2006, the U.S.-led coalition is committed to helping Iraq's new government implement reforms necessary for a modern economy. Iraqis face challenges because of sabotage by terrorists and remnants of the ousted regime of Saddam Hussein. Yet despite these challenges, says President George W. Bush, progress is being made:

"Iraq now has a stable currency, an independent stock exchange, an independent central bank. Iraqis have new investment laws to welcome foreign capital, tax and commercial laws to encourage private sector growth, and a low-tariff trade regime that has opened Iraq's economy to the world."

Until recently, government subsidies put the price of fuel in Iraq at artificially low prices, creating incentives for black market corruption and crime. "Changing these subsidies," says Mr. Bush, "is a necessary step on the path for economic reform":

"Gasoline subsidies, along with other subsidies, consume over half of Iraq's annual budget. It diverts critical resources from health care and education and infrastructure and security. Addressing these subsidies will allow Iraqi leaders to better provide for their people and build a modern economy."

Mr. Bush says, "One of the biggest challenges facing Iraq is restoring the country's oil and electric power infrastructure":

"These sectors were devastated by decades of neglect. And since liberation, terrorists have targeted these areas for destruction. As a result, oil and power production are below pre-war levels. To help increase production, we're helping Iraqis better maintain their refineries, build their oil supply and transportation capabilities, improve their capacity to generate power, and better protect their strategic infrastructure."

Yet, Iraqis are putting these challenges in perspective. Mr. Bush says, "Today, seven in ten Iraqis say their lives are going well, nearly two-thirds expect things to improve even more in the next year. The vast majority of Iraqis prefer freedom with intermittent power to life in the permanent darkness of tyranny and terror," says Mr. Bush. "Iraqis," he says, "are optimistic about the future, and their optimism is justified."

The preceding was an editorial reflecting the views of the United States Government.