24 August 2006
Iraq has a 70% annual inflation rate
Juan Cole reports that the annual Iraqi inflation rate is now some 70%. He goes on to say that this will hit the poor the hardest, but the Exile does not agree with that assessment.
Basically, the poor in the Third World are untroubled by economic woes such as this, and for two reasons:
1. Often they are only loosely connected to the cash economy. Many of their transactions are in the form of barter trade - the you fix my tractor and I'll give you some wheat, sort of thing.
2. Most states have a system that either doles out basic food free to the poor or sells it at subsidised prices. Iraq does the former, which means that people are not going to riot because they are hungry.
No, the people who suffer in a high inflation regime are the middle class. Given that this group is the one that the imperialists are relying on to build the brave new Iraq, an inflation rate of 70% is yet another spur that encourages them to leave the country.