November's Comment of the Month was sent in by Sarah Standish of Portland, Oregon. Sarah commented on Alok Amatya's post Dairy Cows Fight Terrorism in Fallujah. She offers an alternate look at the relationship between job creation and terrorism. Sarah also wisely points out the need to look at more than one source of information before drawing conclusions. For her efforts, we will make a $25 donation to a project of her choice on Global Giving.

This Wall Street Journal blog post mentions that one study suggested that job creation may not necessarily reduce terrorist attacks:

When unemployment declined in Iraq and the Philippines, violence increased. The scholars say that one reason for this is that government forces may be able to pay off locals for tips on guerrillas more cheaply when unemployment is high. Another possibility is military crackdowns may increase unemployment, because communities are walled off, but reduce attacks by insurgents.

These ideas should definitely provoke us to think carefully about the relationship between violence and job creation, but I don't think they present any compelling reasons to stop focusing on job creation. It sounds to me like the authors have noticed an interesting phenomenon but don't know quite how to explain it yet. In a complicated issue like this one, a single study is probably not enough to draw any absolute conclusions.

Keep writing in and share your though-provoking comments for a chance to win $25 towards the well-deserving charity of your choice!

* Lest anyone think $25 is not a lot, consider these figures from our affiliate Mercy Corps: $25 delivers clean, safe drinking water to 50 people in one of eastern Congo's sprawling displacement camps. $25 provides seeds to farmers in cyclone-devastated areas of Myanmar to plant five acres of rice. $25 gives traumatized children in Darfur 12 weeks of activities and psychological care to help them heal.

Severe unemployment threatens security gains made in the last few years. Photo: Dogon56 (flickr)

Security in Iraq is undoubtedly improving, but rising unemployment threatens to increase instability and worsen corruption, according to Iraq expert Frank Gunter.

Gunter, who's done two tours in Iraq as an economics adviser, points out in a recent op-ed in the New York Times that 51 percent of the population — and an even greater percentage of young people — is either unemployed or underemployed.

Almost half of the country’s labor force is paid by the government from its revenues from petroleum exports. With the exception of agriculture, legitimate private-sector employment is small — by my calculations, about 6 percent of the labor force. Most of the remainder of the Iraqi labor force is either unemployed or working in the underground economy.

Gunter further laments that any business faces either the inefficiencies of the underground economy or the corrupt ministries that regulate them. (Iraq was just listed among the top five most corrupt countries in the world.) The process to register a new business is expensive and complicated — a license costs $2,800 and requires approval from 12 different ministries.

"The potential for private sector job growth is great," Gunter writes. So what needs to be done? The number-one thing, Gunter says, is to make it easier and less expensive to register a new business. He also recommends that provinces, rather than Baghdad, set rules for regulating businesses.

But whatever is decided, the government of Iraq is running out of time. It must either end its hostility toward private businesses — or accept that a sharply growing mass of unemployed will nullify the progress of the last three years.

Iraqi women are caught in the crossfire between military troops and insurgents. Can dairy farming help bring peace to Fallujah? Photo: .ash (flickr)

Here's an innovative way to expand economic opportunity for Iraqi widows and reduce the threat of terrorism: give the women a dairy cow and teach them how to take care of it.

The U.S. Marine Corps is actually trying this in Fallujah, says the LA Times. They enlisted the help of Lockie Gary, a dairy-farming expert for Land O' Lakes. Gary is working with a group of 50 women — many are widows of insurgents — teaching them how to care for their cow. The women can earn a small income from selling products made from the cow's milk. But according to Gary, an added benefit is that in the long-term, this program might reduce the number of terrorist attacks in the area. He explains why in Farmer and Rancher Magazine:

If the cow could be made to produce enough milk beyond the family’s needs, then cheese and yogurt could be produced as well and the widow might be able to hope for a brighter future. The intent of the program is not entirely altruistic, however. With a source of income and a glimmer of hope, widows may be less inclined to be recruited as suicide bombers and that could save lives.

The program is still fairly new, and the women can't earn enough to support their families by selling the milk and cheese from a single dairy cow yet. But according to Gary, their high-quality milk and cheese should fetch better prices over time.

Iraq's Marsh Arabs have coexisted with the wetlands' unique ecosystem for 6,000 years. Photo: Dr. Michael Izady, Ph.D. (flickr)

Southern Iraq is home to one of the largest wetlands in the world, where the tributaries of the Tigris and Euphrates meet. But a three-year drought in the Middle East, along with dams and water projects in neighboring countries, has left southern Iraq with a serious water shortage, reports the BBC.

For 6,000 years these wetlands have been home to people called Marsh Arabs. They made their huts out of the marsh reeds, ate fish they caught in the waters, and sold the milk and cheese they made from water buffalo milk, explains the LA Times. (A beautiful slide show of Iraq's marshlands and the Marsh Arabs accompanies the The LA Times article.) But now these wetlands are roughly 30 percent of their former size, says the BBC, and they are continuing to shrink.

The marsh's dropping water levels have devastated the wealth of the region and the livelihoods of the Marsh Arabs. Jassim Asadi, of the nonprofit conservation group Nature Iraq, tells the LA Times the marshes used to supply two-thirds of the fish consumed in Iraq. Now people buy bottled water and frozen fish imported from Iran. “It is an economic disaster,” Asadi says.

Though the drought is "the most immediate cause" threatening the wetlands and their inhabitants, regional water politics cannot be ignored, the BBC says. The Tigris and Euphrates flow through multiple countries, and the rivers are the main water source in the area. A BBC video helps break down the situation:

About 70 percent of Iraq's waters originates outside the country, in Turkey, Syria, and Iran... These countries already have ambitious damn and irrigation projects, limiting how much is left for Iraq. And yet more damns are planned — further reducing the flow into the marshes.

Some scholars and politicians remain hopeful that diplomacy and cooperation amongst the different Middle Eastern countries will allow for more equitable water management. But as things stand now, there is no immediate fix on the horizon.

Iraq's most lucrative export after oil - dates - has seen declining production since the American-led invasion began in 2003. Photo: Ikhlasul Amal (flickr)

The U.S.-led invasion of Iraq in 2003 and the subsequent violence has left the country struggling to survive. Now, Iraq’s economy is suffering even more due to declining production in one of its most thriving exports after oil: dates.

Dates are highly nutritious and a staple food in Iraq. Before the war, a typical palm tree was yielding 130 – 175 pounds of dates per year, compared to only 30 pounds of fruit last year, reports the New York Times. The country used to produce about 75 percent of the world’s dates at one point, but today Iraq has fallen behind many other Arab countries leading in date production.

The lack of “sufficient electricity, machinery and a drought” has severely damaged the agricultural industry, says Iraqi economist Ghazi al-Kenan. Prior to the U.S.-led invasion, there were more than 150 date processing factories. Today there are six.

Another factor contributing to the decline in date production is that the country's trade ministry — which is responsible for buying agricultural products for export from farmers — isn't purchasing dates at a high enough price to cover production costs for farmers, reports the New York Times.

But the decline in date production is causing more than just agricultural and economic problems for Iraq. Public health and the environment are also feeling the effects. Baghdad has experienced more sand storms, increased asthma cases and respiratory illnesses due to the shrinking of depleted farms and orchards surrounding the capital.

With the global economic downturn affecting oil prices, prospects for the date industry are looking grim. The Trade Ministry tells the New York Times that "it cannot afford to raise payments to farmers.”

ATMs Abiding by Islam. Photo: トリプ tripu (flickr)

In Iraq and need cash? It's not easy. All banking has to be done in person at the branch where you hold an account, your salary is paid in cash — not check — and a Visa card won't buy you anything at the market. It's almost not worth graduating from your childhood piggy bank.

But this month, people in Baghdad can begin to say goodbye to this antiquated and unwieldy system— thanks to banking monolith Rafidain's introduction of Iraq's first electronic clearing system.

This is good news for Iraqis because now they can have their paychecks directly deposited into their accounts instead of stashing their money at home. By September they will be able to choose from ATMs at 147 branch banks scattered around Baghdad — and count on them to be functional.

This step towards a modern banking system could help bring prosperity to Iraq. As the Economist noted optimistically, "Iraq’s overdue conversion to fully electronic banking should help woo investors from abroad and pep up the economy as a whole."

But some are worried this ATM hustle-and-bustle means a transition to modern finance that Iraq isn't ready to support. First, the use of ATMs and electronic banking may lead to other aspects of Western banking, such as loans and credit cards. This could prove problematic because Shariah (Islamic law) prohibits credit and "non-benevolent" loans that charge interest.

This isn't a new obstacle: Other developing Muslim countries have faced the transition to a modern financial system while still following Islamic banking standards. This form of finance is based on a common prudence among banks, lenders and individuals— because they all share the risks of investment, and divide any profits. It has already been successful in many Muslim countries — ranging from the strict model followed in Qatar, to a more relaxed one, as in Malaysia. It is even being implemented in secular countries with a Muslim minority population like the U.K., and in Western financial hubs like Switzerland.

What's more, some say the Islamic model is more insulated from the recent global financial crisis than conventional banking systems. This is because the theological framework of the system prevents excessive risk-taking — such as the use of unstable financial instruments like derivatives. Majed al-Refaie, the head of an Islamic investment bank in Bahrain, explains in the Washington Post:

The beauty of Islamic banking and the reason it can be used as a replacement for the current market is that you only promise what you own. Islamic banks are not protected if the economy goes down — they suffer — but you don't lose your shirt.

For these reasons, some say Iraq's potential for financial growth through Islamic banking is high, provided the country is stable enough to support stimulation.

But even Islamic finance is not recession-proof, as economists noted at the recent Islamic Banking and Finance Summit in Dubai. This model also requires stability and responsible management for success — which Iraq may not be ready for. Islamic finance may not be the best answer for impoverished Iraqis either: It is more difficult for poor people to get loans under this system than conventional ones. This is because borrowers need a higher income and more collateral to meet the stringent lending rules set by Islamic banks.

Opting to go the conventional banking route, on the other hand, could create another pitfall for Iraqis: credit cards — and more specifically, credit card debt. Ballooning credit card debt can easily lead to the entrenchment of poverty, not its alleviation.

The potential downfalls of either financial system — Islamic or conventional — could pose problems as Iraq modernizes. But for now, at least Iraqis can finally ditch those piggy banks and go to a working ATM instead.

It's been six years since the U.S.-led invasion of Iraq. In recent months, stability has improved, but the gains will unravel unless progress is made toward strengthening the economy.

The financial crisis and lower-than-expected oil prices have changed things considerably for the Iraqi government. Last month, parliament made big cuts, revising the budget from $79 million to just $58.9 billion.

A major portion of this budget was supposed to be allocated toward rebuilding the infrastructure that has been devastated during the past six years. The New York Times reports that infrastructure projects are being put off, including the cancellation of a $600 million General Electric contract to lay electric cables and upgrade switches to allow the grid to increase electricity output.

Unemployment is also a big issue. A UN report released in February shows that unemployment is estimated to be around 18 percent. An additional 10 percent are underemployed, working part-time.

Adding to the frustration of locals, the government hasn't been able to meet basic needs like providing safe drinking water, electricity and education. The Iraqi Environment Ministry estimates that 36 percent of Baghdad's drinking water is unsafe as raw sewage, which still runs down Baghdad streets, mixes with drinking water. Furthermore, the demand for electricity still exceeds supply.

People expected things to go differently. Just last year, the Iraqi government was flush with cash. Record high oil prices prompted the government to offer big raises to employees. Now the shortfall has left the Iraqi government struggling to pay salaries for government employees and hundreds of thousands of new security troops.

But a shaky Iraq could force the Obama administration to adjust their plans. The Times points out that unless the economy strengthens and security gains continue, President Obama's timetable to withdraw troops could be delayed.

A stable Iraqi economy and an adequately prepared Iraqi military are crucial if American combat troops are to withdraw by August 2010, as aides to President Obama suggested this week. And illustrating just how closely the two countries are still intertwined, a faltering Iraq could also complicate Mr. Obama’s plan to lower the American deficit with billions in savings that would come from such a withdrawal.

Although the progress on the security front has given in a sense of normalcy, but the financial crisis has made it even more urgent for the government to develop a long-term strategy for stabilizing the economy, creating jobs, attracting foreign investment, which will ultimately mean prosperity for the Iraqi people.

According to Hazim al-Nuaimi, a political analyst in Baghdad, “The only thing that has changed is that now there's a light at the end of the tunnel. But it seems six years is not enough to be able to reach that light.”

Photo: James Gordon (flickr)

In a country where kidnapping and violence towards medical workers occurs all too frequently, the Iraqi government is taking measures to stop doctors and nurses from leaving the country and convince those who have left to come back.

On Monday, Iraq announced a number of new policies aimed at creating a safer environment for medical professionals to work. Police will not be able to detain doctors without Ministry of Health permission, doctors will be permitted to carry guns, and security will be strengthened at clinics and hospitals. Iraq is also attempting to bring refugee medical workers back home through advertising campaigns and improved salaries.

According to a March 2008 report by the International Committee of the Red Cross,
the health care system in Iraq is in crisis.

More than 2,200 doctors and nurses have been killed and more than 250 kidnapped since 2003. Of the 34,000 registered doctors in 1990, at least 20,000 have left the country."

The lack of a strong health care workforce in Iraq has serious consequences. According to a report by Medact, studies have shown that the conflict in Iraq has caused a dramatic increase in death rates of children under 5, emergency aid needs, and war-related morbidity and mortality. In addition, basic health and primary care services are both hard to find and unaffordable, causing many people to either turn to underqualified practitioners or go without care.

This is not the first attempt by the Iraqi government to lure back skilled professionals: In 2005, the government announced it would double the salaries of university professors to prevent "brain drain." We'll have to see if these latest measures will be enough to improve a dangerous situation.

In the foreground stands the television news correspondent. He is describing the bombings and devastation being wreaked by Russian troops in a defiant Georgia. Crossing behind him unnoticed is a small group of people clearly fleeing the devastation with possibly everything they own on their backs or in the makeshift bags they are carrying. Where they are going is a mystery.

A known but little-noted result of the conflict in Georgia — and others around the world — is the displacement of people who have absolutely no control of the events going on around them. In Georgia alone, tens of thousands of refugees from the secessionist territories of Abkhazia and South Ossetia have been waiting for more than ten years for a chance to return home. According to the Internal Displacement Monitoring Centre, as many as 247,000 people are displaced in Georgia as of February 2007. The current situation promises only to worsen an already terrible circumstance.

Indeed, according to a 2007 study published by the IDMC, the number of refugees created as a result of armed conflicts and violence in more than 50 countries is well over 26 million. In nearby Iraq, for example, nearly 3 million people were displaced by rising inter-community violence between February 2006 and March 2008, according to the UN. “If a similar percentage of the U.S. population were displaced," writes the Brookings Institute's Elizabeth Ferris in The Looming Crisis: Displacement and Security in Iraq,
"this would represent over 50 million Americans — the equivalent in displacement of those uprooted by 50 Hurricane Katrinas.”

Add these folks to the already staggering number of poor and poverty stricken people throughout the world — a World Bank report states that 2.8 billion of the world’s more than 6 billion people live on less than $2 a day and 1.2 billion on less than $1 a day — and one begins to get a sense of the enormous challenges facing the world’s decision makers.

(Editor's note: Mercy Corps is one of several organizations helping displaced people in Georgia.)

Iraqi refugees living in Jordan. Photo: Jacob Colie/Mercy Corps

Life has been hard for many Iraqi refugees. They flee their homes in the thousands each day to reach unwelcoming neighboring countries that do not have enough room or resources for them.

The UN High Commissioner for Refugees (UNHCR) is leading the effort to help these refugees with food, jobs, health care, and education. Accomplishing this mission, however, has become increasingly difficult for the UNHCR due to a lack of funds and the recent spike in food and energy prices. Many Iraqi refugees now face a very precarious future.

This dire situation, however, is not the case for all Iraqi refugees. Especially in Jordan, some Iraqis have found that their lives have actually improved away from the conflict-torn Iraq. A recent article in the Christian Science Monitor recounts the stories of Iraqi refugees who have been able to start over and even establish their own businesses in Jordan.

These Iraqi refugees have the training and resources to start over because many of the roughly half-million Iraqis in Jordan are from the well-educated middle class. A study by the Norwegian Research Institute Fafo of Iraqis in Jordan found that 46 percent of adult males and 42 percent of adult females have some type of university degree.

UNHCR is promoting awareness and raising concerns about the most vulnerable of the 4.7 million Iraqis who are either refugees or have been internally displaced. Equal concern should also be given to the most valuable — those who, by departing, drain Iraq of the brains needed to rebuild.