November 27, 2004

Free Electricity

I just read a fascinating interview of Paul Wolfowitz in Prospect Magazine. The entire article is worth a read but I learned a key fact about Iraq in it that absolutely left me shocked. Electricity is not metered, not even charged for in Iraq.

I can't think of a single country where free electricity wouldn't cause shortages in capacity, not one. Yet in over a year of reporting on electricity shortages, I never heard anybody ever mention the fact that Iraq prices electricity at $0.00 or lists that as a cause of the shortages. That includes both US and international press. It's scandalous that nobody even mentioned it. It's basic economics 101 that if you artificially set the price low, you'll get shortages. Toss in a war, infrastructure sabotage, and pre-war infrastructure negligence and it's a miracle that the electricity system is as functional as it is.

It all really makes me question how much else I've missed on Iraq.

Posted by TMLutas at November 27, 2004 02:01 PM