U.S. News: A Shaky Advance Led by Oil Money
Seven years after the U.S.-led invasion, Iraq's petroleum industry shows signs of living up to the potential that American planners hoped for at the start of the military operation, a potential boost to the war-ravaged country's economic recovery.</br></br>After fits and starts, Iraq's oil production has rebounded to prewar levels. The government thinks the field-development deals it has handed out to international companies are on the way to boosting output significantly. With Iraq depending on oil exports for some 90% of its government revenue, that is expected to provide a broader boost to an economy that is already benefiting from high growth and tame inflation.</br></br>No one is predicting an economic miracle in Iraq, which is still smarting from decades of sanctions, underinvestment and a creaky, centrally planned economy. Unemployment remains high, posing a continued risk that jobless youth will be lured to the insurgency. Power outages are common, leaving residents sweltering in darkness and complaining at times that things were better before the invasion.</br></br>The Bush administration denied going to war over oil. But senior officials in Washington suggested early in the military operation that Iraq's oil wealth offered a quick way to rebuild.</br></br>Years of trying to lure outside capital and know-how, however, foundered. During the invasion, oil production went to zero. Afterward, the country's oil infrastructure and power grid -- never reliable in the first place -- were heavily looted. Then, political opposition to foreign involvement in the country's oil fields flared.