Today in Washington, Secretary of State Condoleezza Rice meets with Iraq's deputy prime minister, Ahmad Chalabi. An Iraqi head of state in our nation's capital? That would have been unthinkable two years ago. But Chalabi has been less than reliable. He predicted a warm welcome for American troops in Iraq and played up the threat of weapons of mass destruction. He also suggested Iraq's oil revenue could pay for reconstruction. MARKETPLACE's Jeff Tyler looks at how well that prediction is turning out.
JEFF TYLER reporting:
Iraq's oil industry produces less than it did before the war, but with high oil prices, the country actually collects slightly more in revenue. Pratap Chatterjee is executive director of the non-profit CorpWatch.
Mr. PRATAP CHATTERJEE (Executive Director, CorpWatch): We're talking about maybe a 5 percent increase in Iraqi income compared to when Saddam Hussein ran the country. However, at the same time, Iraqi inflation has been running at extremely high levels, 20 percent just this year alone.
TYLER: In addition to inflation, a big chunk of oil revenue pays for security. Chatterjee says that's usually handled by foreign firms which send their profits out of Iraq.
Mr. CHATTERJEE: Most of the money for big Iraqi reconstruction projects comes from the United States.
TYLER: Before the war, Iraq's government collected taxes on imports and personal income. With the tax system effectively dismantled, Iraq is now more dependent on oil. I'm Jeff Tyler for MARKETPLACE.
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