Iraq's Biggest Problem: Its Corrupt Banks

Bloated state banks feed corrupt economic system: critics
By Neal Colgrass,  Newser Staff
Posted Dec 26, 2011 5:31 PM CST
An Iraqi man passes near a bank that was severely damaged in a car bomb attack in Baghdad, Iraq, Monday, June 21, 2010.   (AP Photo/Hadi Mizban)
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(Newser) – Eight years after the US invasion, Iraq still lacks reliable electricity, postal service, public transport, you name it. But many of these problems are fueled by a corrupt banking system that rejects market economics and funnels money to scams and greedy government officials, McClatchy reports. The worst offenders, critics say, are two bloated state banks with fraudulent balance sheets. "We have deficient people here, sitting in certain high posts, who cannot create any economic vision," says one official.

How bad is it? Iraq has enough oil to become one of the world's wealthiest countries, but has no electronic funds transfers, no home improvement loans, no real estate market, and few ATMS or credit cards. And with almost no loans going to businesses, nearly all of its products are imported. "Would you like some water?" a waiter asks wryly, holding up a bottle from Kuwait. "Here we are in Mesopotamia, a country with two great rivers, importing water from Kuwait." (Read more Iraq stories.)

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