Despite some progress, Iraqis losing faith

Hussein al-Jubari should be the perfect illustration of President Bush's recent insistence that "Iraq is making progress." Mr. Jubari sits wedged between stacks of stereos from Japan, hair dryers from China, and satellite receivers from South Korea in his tiny shop across from Iraq's central bank. Business is picking up, he says. Sales of satellite receivers, illegal under Saddam Hussein, are particularly brisk.

But he takes a dim view of Iraq under US administration. "Sure, it's safer than it was immediately after the invasion, when looters were everywhere,'' he says. "But it's much worse than it was immediately before the invasion. Unless they can give us security immediately, America should get out."

Just as his visitors leave, a distant boom rattles the shutters and draws an involuntary flinch from almost everyone in the crowded street. Later, it turns out the explosion was a suicide attack that killed six bystanders at the Baghdad Hotel on Sunday, where some US officials and members of the US-appointed Governing Council live.

If more evidence was needed that the Coalition Provisional Authority (CPA) grip on developments in Iraq is tentative, it was found in the tense US soldiers guarding the blast site and the chanted taunts from a small crowd of Iraqis at the scene.

The US coalition is now fighting a two-front public relations war, against critics at home who argue the bombing campaign is evidence that more authority should be shifted to the UN, and here in Iraq, where the view from the streets is that Iraqis are losing faith.

Whether you ask a member of Baghdad's largely Sunni commercial class or one of the generally poorer Shiite community, who were oppressed under Hussein and have the most to gain from regime change, gratitude for any improvements is usually drowned out by frustration that more hasn't been done.

On Friday, the fiercely anti-American Shiite cleric Moqtada al-Sadr, who has built a base of hundreds of thousands of supporters including his own militia, declared he was setting up a government to rival the US-appointed Governing Council.

A clash with US troops last Thursday near his Baghdad headquarters left at least two of his supporters and two American soldiers dead, and analysts say he appears to be testing the coalition to see how much power he can take for himself.

To many Iraqis, a restoration of what they had at the start of this year is a minimum. Instead, many remember the strength of the economy prior to the first Gulf War in 1991 and the crippling economic sanctions that followed.

US officials rightly point out that economic collapse was largely due to Hussein's decision to shift the government's limited finances to military industries in the 1990s and to rewarding those who helped keep him in power. But Hussein's regime successfully painted the problem for many Iraqis as almost entirely due to the sanctions. As a result, the CPA can't seem to get any credit for the progress it is making.

"Iraq went from being one of the most advanced countries in the region to one of the least,'' CPA chief Paul Bremer said in a briefing at the end of last week. Hussein "cut back spending on healthcare in the 1990s by 90 percent. Child mortality in the south, where his hand was heaviest, became worse than all of Iraq's neighbors'." The World Bank says education spending fell from $600 a child to just $50.

At last week's briefing, Bremer ticked off an impressive list of success: Twenty-two million Iraqi children have received vaccinations; 1,500 schools have been rehabilitated; 13,000 reconstruction projects have started around the country; and, best of all, average electricity generation is slightly higher than it was before the war.

"There will be bumps on the road,'' Bremer said. "But I think it's important [for] those of you who are here regularly covering the story to put that in perspective, because it's a lot better than it was."

But the question comes down to the baseline for comparison. "Bremer's comments contained a lot of false comparisons,'' says Hussein Kubba, an economist who ran a small stock brokerage before the Baghdad exchange was shut by the war.

"If we're talking about reconstructing Iraq, we have to go back to the late 1980s, not to six months ago, when everything was a mess."

Mr. Kubba says that while services and retail business is picking up, the real economy, of "people [who] make things,'' is stagnant. While electricity generation is important, he says the real bottleneck for growth will be Iraq's "distribution system, which is in a shambles," he says. "If there is an economic recovery, it will hit a wall, because there won't be enough power."

Ali Fadel says any improvement in electricity to his small factory is negligible, which has left him reliant on an expensive generator he bought shortly before the war. At his family's 50-year-old Abo Ayub factory, which turns out small components for machines in everything from power plants to cars, business is pretty good, especially with so much reconstruction going on in power plants.

But Mr. Fadel, sipping tea in the office attached to his factory, which is located in a building filled with brick arches and elegant tile-work from its early history as a British colonial courthouse, says he's filled with anxiety about the future under American rule.

"I'm doing OK because of our work with the electricity plants, but many of my friends' businesses are idle,'' he says. "But even for me, I'm very upset. I send my two sons to school with an armed bodyguard - and the school is only 200 yards from our house."

Fadel's business employs 24 people, who hand operate the machines that cut the metal for his components. Like most of those working in Iraq's small industry sector, he's benefited from a largely closed economy that has kept imports out.

But the US-appointed Governing Council recently passed one of the most liberal foreign investment laws in the Arab world, and he's expecting to be driven out of business soon.

In talking about his day, Fadel has a list of annoyances with the US presence that seem almost petty, but are frequently expressed by a middle class that feels affronted by the occupation.

His former 10-minute drive to work now takes an hour and a half because roads have been closed to protect coalition officials; his car was once stopped and searched; as a Muslim, he says, he has a visceral reaction to the site of armed foreigners on the streets of Baghdad.

"Saddam Hussein was a very bad man, we all believe that,'' says Fadel. "But the people who say they've come to help me, they haven't come in a friendly fashion. They've come into my house and pointed a gun at me. How can we welcome someone who does that?"