Capitalism Sputters to Life Across Iraq

BAGHDAD - As restaurants and shops slowly reopen, entrepreneurs of every kind are popping up all over Baghdad, embracing and struggling with a new form of free commerce unimaginable under Saddam Hussein.

Garbage trucks troll wealthy neighborhoods, offering to pick up messy piles for a fee, while refuse stacks up in poorer neighborhoods and commercial areas. Firefighters try to make up for lost wages by turning their hoses on storefront windows. Goods banned under Saddam such as satellite dishes and satellite phones are now widely available for sale, while enterprising businessmen with shuttered stores stand on sidewalks selling satellite phone time for $2.50 a minute.

But big frustrations loom for many Iraqis who are just now learning how to get rich. With American promises of freedom comes the opportunity to lose your shirt.

One of the most obvious and frustrating signs of a new economic system are the long lines at gas stations. Cars wait all day for gas priced at 20 dinars (about 10 cents) a liter. But drivers leave with empty tanks because the station manager has sold most of his fuel for 50 dinars a liter to crowds of jerrycan entrepreneurs. These men fill cans and plastic containers, then resell the gas, also known as benzene, for up to 200 dinars a liter to motorists who can afford to pay or who cannot afford to wait.

The tensions over benzene reach a fevered pitch almost daily. Last week, a fight broke out at a gas station, and the inevitable gunfire led to an explosion. It is not known whether anyone was injured.

Part of the problem is that oil refineries are not at full capacity and, accordingly, the gas stations, once open 24 hours a day, close after about eight hours.

Visit to refinery

On Monday, retired Army Gen. Jay Garner, who heads the Office of Reconstruction and Humanitarian Assistance, visited the Shueiba oil refinery, Iraq's second-largest, near Basra. The general manager, Taha Ibrahim, told reporters the refinery had resumed operations Thursday and is now refining 70,000 barrels of oil a day, producing liquid petroleum gas, diesel oil, kerosene and gasoline. He said the refinery has a capacity of 180,000 barrels a day, and he expects to reach that production in a matter of weeks or months.

Saad Al-Samarai, a university economics professor, said he suspects the station managers were taking kickbacks from the jerrycan operators, many of whom are children. "I understand supply and demand, but this is not fair,'' he said.

As several hundred people gathered at a large gas station near Al Huria, or Freedom Square, station manager Mohamed al Zubaidi denied getting any extra payments and defended the prices.

"This condition is because of the war,'' he said. "We have no control of the people. The system is loose. If I refuse to sell to the jerrycans so I have enough benzene for the cars, who will protect me from the jerrycans? They are also trying to make a living.''

Kais Nsaif, 32, no longer drives his minibus because it costs him his day's salary to fill the tank. "I am not angry,'' said Nsaif, who has five children. "I am destroyed.''

Less than a mile away, the breakdown in communications after the war has turned into a boon for Naman Louis Naman, 45, whose flower shop is dark because of a lack of refrigeration.

Instead, Naman stands on the sidewalk in front of his store with a Thuraya satellite phone he bought from a contact in Amman, Jordan, for about $1,450, much more than the phone's $850 to $925 price tag in Baghdad now.

10 bucks a minute

"In the beginning, people paid $10 a minute, and I had about 20 people an hour sometimes,'' Naman said. "I made it back in less than four days.''

Now his rate is $2.50 a minute, but still, he said, "satellite phone rental is better than the flower business.''

Satellite-dish vendors are not finding it as easy. Mohamed Abass, 39, wants to go back to selling refrigerators and VCRs after he gets rid of the 50 or 60 dishes, receivers and antennas in his store. He has only been at it for a week.

"When I started this, I sold about 30 dishes a day, but two days ago it really came down. I only sold three dishes,'' Abass said. "The job makes me feel dizzy.''

Hampered by the lack of continuous electricity and possibly too much competition, Abass also has two other problems. Most Iraqis cannot afford the $320 to buy a satellite dish, and he has no staff to install the equipment.

Freelancers used to stand in front of his sidewalk, offering to help customers set up their dishes for $20, which can be 10 times the monthly salary of some Iraqis or a quarter of a small family's monthly income.

But with political parties beaming in new TV channels from abroad and the debut this week in Karbala of the first new television station operated from within Iraq, habits may change quickly. Ahmad Chalabi's opposition party, the Iraqi National Congress, launched a newspaper Thursday that they hoped would be sold for about 50 dinars a copy; newspaper hawkers are asking for 250 dinars.