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Sunday, January 18, 2004

End of a liberation?

Riverbend is not happy. The Iraqi governing council has just decreed that family law in Iraq will henceforth be Sharia law. Claims that Iraq is going to end up with a secular state are looking increasingly ridiculous.

A few years ago I went to Tunisia, which thanks to a post WWII socialist president (who subsequently became a dictator) is a remarkably liberal islamic country. Teenage couples wander around openly in major cities (she will always be wearing long trousers / jeans though) the economy is doing well and those who want to wear a veil do. I don't know much about Tunisia but I get the feeling that their democratic failings aside they're probably the kind of model people should be aiming for with Iraq.

Also from the Iraqi blogs comes Salaams account of inflation. This was a major feature of my MBA Macroeconomics course, our Israeli professor apparently having been scarred for life by hyperinflation in Israel. That was a while ago though, so he got the guy who used to run Argentinas' economy to come talk to us about inflation instead.

The bizarre thing in Iraq is that at the moment they're technically deflating the dinar. It's rising against the dollar at pace. However no-one uses Dinar's they all keep money as dollars. Prices however are in Dinars so a strong Dinar means more dollars to pay for the same thing = inflation. I have no idea how this plays out, but if inflation takes hold in Iraq things are going to be very bad on a macroeconomic level for some time.

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