Rebuilding commerce in Iraq may well depend on how fast a banking system can be put in place, U.S. officials say.
Currently, the nation's banks are in ruins - blown out vaults and burned out buildings dot Baghdad's financial district. All nine floors of the Iraqi Central Bank have collapsed into a hollow shell. The U.S.-led Office of Reconstruction calls the situation in Iraq dire with little or no banking in place.
But banking problems in that country started long before the war began. Several decades ago, the country had what was considered one of the most modern financial systems in the Mideast, a source of help to other countries in the region that were trying to start central banks. But Saddam Hussein ran the system into the ground, treating the Iraqi Central Bank as his own private account. People in the country have deposited little into the banks in recent years for fear their funds would be seized.
Treasury officials are already visiting the country to see what can be done. Meanwhile, the U.S. Agency for International Development is arranging credit in the country in the form of loans of $100 to $250,000 that will be offered to individual entrepreneurs and small- to medium-sized businesses.
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