Ongoing Fighting Hinders Iraq Economy
Fighting in Iraq’s western Anbar province, now in its fifth month, appears to have bogged down, with government forces unable to drive out Islamic militants who took over one of the area’s main cities. But the impact is being felt much further, with the repercussions rippling through the country’s economy to hit consumers and businesses.
The large, desert province is a major crossroads. The main highways linking Baghdad and other parts of Iraq to Syria and Jordan run through it. So fighting has not only dislodged thousands of residents from their homes and forced shutdowns of their businesses. It has also disrupted shipping, inflating prices of goods in Baghdad and elsewhere. Fears of the road have gotten so bad Iraq has had to stop shipments of oil to Jordan.
Anwar Salah, co-owner of al-Baqiee travel agency in Baghdad, said his company used to run more than 13 trips a day by SUVs shuttling passengers between Baghdad and the Jordanian capital, Amman.
Now people avoid the highway, which runs near the flashpoint Anbar cities of Fallujah and Anbar, fearing militant checkpoints or clashes. So his firm is down to one trip every other day, and profits have plunged by 90 percent, he said.
“Most of the drivers who used to work for me are now either jobless or working in other professions,” he said. “We are part of the country’s miserable situation.”
Militants, many of from the al-Qaida-breakaway group Islamic State in Iraq and the Levant, overran Fallujah and parts of Anbar’s capital, Ramadi, at the beginning of the year, taking advantage of tensions between the Sunni community, which dominates Anbar, and the Shiite-led central government.
Since then, government forces backed by Sunni tribal fighters opposed to al-Qaida have battled the militants with little success. The forces encircle Fallujah, but it remains completely under militants’ control. In Ramadi, where militants control several districts, the fighting swings to and fro: Government forces may retake an area during the day, only to lose it again by nightfall or within days.
The violence has uprooted around 75,000 families from their homes, according to United Nations figures.
Abu Abdullah, owner of a small dairy factory in Fallujah, shut down his business in January and fled the city. His factory used to produce yogurt, cheese, and cream with 20 employees. He closed because milk supplies from nearby villages stopped and his employees were afraid to come to work.
“Business was good before Anbar crisis,” said Abu Abdullah, who spoke on condition he be identified only by his nickname for security reasons. Now he’s in the northern city of Kirkuk with his eight-member family, hoping for calm to return. “We are out of business and our savings will not last forever,” he said.
Anbar, Iraq’s largest province, is the heartland of Iraq’s Sunni minority and was the birthplace of insurgency that arose after the 2003 U.S.-led invasion that toppled Saddam Hussein’s Sunni-dominated regime and brought the long-oppressed majority Shiites to power.
It has significant strategic value. Besides its desert borders with Saudi Arabia, Jordan and Syria, it also stands on the doorstep of the capital. Some militant-held villages are only about 30 kilometers (18 miles) from Baghdad’s western edges.
So the turmoil has an effect in the city.
A real estate broker in western Baghdad said prices of houses there have dropped, some by as much as a fifth, and sales have dwindled because people are reluctant to buy, fearing the violence. He spoke on condition of anonymity for security reasons.
Oil Ministry spokesman Assem Jihad told The Associated Press that the government has stopped shipping the 10,000 to 12,000 barrels a day of oil it sells to Jordan at preferential rates because the only route for sending it — by truck down the Baghdad-Amman highway — has become too dangerous. The Iraqi shipments made up only about a 20th of energy-poor Jordan’s daily needs, and it has turned to increased imports from Saudi Arabia to make up for the loss.
Jihad also said insurgent attacks against the main oil pipeline that sends oil to international market through Turkey’s Mediterranean port of Ceyhan have left it idle since March. The pipeline, which pumps 300,000 to 400,000 barrels a day and goes through Sunni-dominated areas in northern Iraq, has been a favorite target for militants.
The prices of gypsum and cement have risen in Baghdad because these building materials used to come from factories in and around Fallujah.
In eastern Baghdad, grocery store owner Hussam Abdul-Ridha said fruit prices have risen by about a quarter because of fewer shipments from Syria and Jordan. Few customers are willing to pay extra so his sales have dropped.
Truck driver Ali Mansour Hussein used to transport vegetables, fruits and meat from Jordan and Syria down the Anbar highways, around a two-day trip that earned him slightly over 1 million Iraqi dinars (around $900) for each shipment.
Now he has to take a longer road avoiding Ramadi and Fallujah, extending the trip to up to 10 days because of security checkpoints where he sometimes has to wait for hours. His earnings per shipment are now half what they were.
“It is a deep suffering,” said the father of five, who fled his home in Fallujah and now shares a small house with three other displaced families just outside the city. “We are displaced, I can’t meet family’s demands, I can’t see my children for long days. And, much worse, I can’t even see a solution in the horizon.”
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