Iraq's Local Businesses Thrive amid Lockdown

Iraqis walk through a fresh produce market in the southern Iraqi city of Basra as some lockdown restrictions imposed during the novel coronavirus pandemic have been eased. AFP
Iraqis walk through a fresh produce market in the southern Iraqi city of Basra as some lockdown restrictions imposed during the novel coronavirus pandemic have been eased. AFP
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Iraq's Local Businesses Thrive amid Lockdown

Iraqis walk through a fresh produce market in the southern Iraqi city of Basra as some lockdown restrictions imposed during the novel coronavirus pandemic have been eased. AFP
Iraqis walk through a fresh produce market in the southern Iraqi city of Basra as some lockdown restrictions imposed during the novel coronavirus pandemic have been eased. AFP

A national lockdown in Iraq to contain the spread of the novel coronavirus pandemic has been favored by local businesses who no longer have to compete with Turkish, Iranian or Chinese imports.

Amin Qassem, who has operated in an ice cream factory in the oil-rich province of Basra since 2006 expressed his satisfaction over the new circumstances.

"The coronavirus crisis has allowed us to prove ourselves on the Iraqi market," he said.

"When there was cheap ice cream coming in from Iran, I had to lower my prices to sell so that my ice cream wouldn't be stuck melting in storage," he added .

"Now, I can sell at higher prices. We were able to win back the same markets where imports once crushed us."

Meanwhile, Hadi Abbud, who owns a plastics factory also in Basra, has already reported an exponential surge in orders for plastic tubing, usually brought in from China, AFP reported.

His factory has been working 24/7 to mould, cut and polish thick plastic cylinders proudly stamped "Made in Iraq."

"These days, I'm getting new orders for plastic tubes faster than I can even produce them," said Abbud, his white hair meticulously combed back.

Sales are so good he is planning to recruit another 50 workers for his 100-man factory.

"The situation has really changed," Abbud said, his smile barely concealed by the face mask he wore as part of mandated social distancing in his factory.

According to AFP, even at sea, the difference is notable.

"Starting around a month ago, there have been many more fish," said Mohammed Fadel, who sells his daily catch at a stand in Basra's downtown market.

In Basra's markets, tables are now heaving with rows of silvery fish and buckets of prawns, carefully examined by shoppers in gloves and masks.

The catches are so plentiful that a kilogramme of "zubeidy," a local sea bream, has dropped from $16 to $9.

"The number of fish -- and the prices -- are just extraordinary," said Fadel.



Bank of England Cuts Main Interest Rate by a Quarter-point to 4.75%

Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS
Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS
TT

Bank of England Cuts Main Interest Rate by a Quarter-point to 4.75%

Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS
Bank of England Deputy Governor for Monetary Policy Clare Lombardelli, Bank of England Governor Andrew Bailey, The Bank of England's Head of Media and Stakeholder Engagement Katie Martin and Deputy Governor, Markets and Banking, Dave Ramsden hold the central bank's Monetary Policy Report press conference at the Bank of England, in London, on November 7, 2024. HENRY NICHOLLS/Pool via REUTERS

The Bank of England cut its main interest rate by a quarter of a percentage point on Thursday after inflation across the UK fell below its target rate of 2%.
The bank said its rate-setting panel lowered the benchmark rate to 4.75% — its second cut in three months — though its governor Andrew Bailey cautioned that interest rates would not be falling too fast over coming months.
“We need to make sure inflation stays close to target, so we can’t cut interest rates too quickly or by too much,” he said. “But if the economy evolves as we expect it’s likely that interest rates will continue to fall gradually from here.”
In the year to September, UK inflation stood at 1.7%, its lowest level since April 2021 and below the central bank’s target rate of 2%, The Associated Press reported.
Central banks worldwide dramatically increased borrowing costs from near zero during the coronavirus pandemic when prices started to shoot up, first as a result of supply chain issues built up and then because of Russia’s full-scale invasion of Ukraine which pushed up energy costs.
As inflation rates have recently fallen from multi-decade highs, the central banks have started cutting interest rates.
Economists have warned that worries about the future path of prices following last week's tax-raising budget from the new Labour government and the economic impact of US President-elect Donald Trump may limit the number of cuts next year.
The decision comes a week after Treasury chief Rachel Reeves announced around 70 billion pounds ($90 billion) of extra spending, funded through increased business taxes and borrowing. Economists think that the splurge, coupled with the prospect of businesses cushioning the tax hikes by raising prices, could lead to higher inflation next year.
The rate decision also comes a day after Trump was declared the winner of the US presidential election. He has indicated that he will cut taxes and introduce tariffs on certain imported goods when he returns to the White House in January. Both policies have the potential to be inflationary both in the US and globally, thereby prompting Bank of England policymakers to keep interest rates higher than initially planned.