UAE cancels Iraqi debt

BBC

The United Arab Emirates has cancelled the entire debt owed to it by Iraq - a sum of almost $7bn (£3.5bn) including interest and arrears.

The Gulf state also appointed a new ambassador to Iraq, in a move which eases Baghdad's diplomatic isolation.

The news was announced during a visit by Iraqi Prime Minister Nouri Maliki.

Correspondents say Iraq's Sunni Arab neighbours have been wary of fostering ties with Iraq's mainly Shia government because of its links with Iran.

Last month, the UAE's foreign minister became the highest-ranking official from an Arab nation to visit Iraq since the US-led invasion in 2003.

AP

The Emirates' official news agency quoted the country's president Sunday as saying the UAE was canceling all US$4 billion in debt owed by Iraq.
...
Last year, Saudi Arabia announced it would forgive the portion of Iraq's debt it holds, but the Iraqi government has said it has so far failed to do so. American officials have urged patience, saying debt relief takes time.

Emirati president Sheik Khalifa bin Zayed Al Nahyan said Sunday to WAM he hoped canceling part of the debt would "lighten the economic burden facing Iraqi people."

Khalifa also urged Iraqis to unite behind the Shiite-led government and praised its efforts to restore the country's stability and security.

Welcome news. Thank you, Sheik Khalifa.

Addendum: Iraqi electricity output is up. Thanks to Kerplonka! for the pointer.

Addendum 2: Menzie Chinn at Econbrowser shows great insight on Iraq. I'm not saying I agree with Chinn entirely, but the post is thoughtful and more than the kind of low brow analysis you'll get from the press.

State enterprise in Iraq :: Financial Times

Interesting report on the ups and downs of getting the large industrial zones in Iraq working again. The story in the Financial Times is available here from the Gulf News.

Pol Pot and Saddam :: The Times

William Shawcross writes:

That long view seems to me to be the one that has to be applied to Iraq. I still believe the overthrow of Saddam Hussein was the correct thing to do — and it was something only the United States could have done. For all the horrors that extremist Sunnis and Shias are inflicting on each other today, the US rid the world of the Pol Pot of the Middle East. So long as the vile Saddam family regime remained in power there was no hope of progress in the region. There is still hope — if we do not abandon the Iraqi people.
...
The consequences of an American defeat in Iraq would be even worse than in IndoChina. As the al-Qaeda leader in Iraq, Musab al-Zarqawi, said before he was killed by a US air strike: “The shedding of Muslim blood is allowed in order to disrupt the greater evil of disrupting jihad.”

If Iraq collapses, such nihilist killing will spread far wider. As in Cambodia, bloody mass murder is the only alternative to what the US-led coalition is trying to achieve. Thanks to the sacrifice of young American and British soldiers, and to the courage of millions of ordinary Iraqis, the country can still have a better future — if we remain committed. Remember 1975.

Link via Cardinalpark at TigerHawk.

Iran: Crude reality :: WSJ

Some extracts:

Iran sits on one-tenth of the world's known oil supplies but is using so much energy these days it may start rationing gasoline as soon as next month.
...
As the country has grown wealthier selling oil and gas, Iranians have themselves become large consumers of energy. Government subsidies, which make energy nearly free to consumers and businesses, stoke the demand further. At the same time, a combination of Western sanctions and Iranian policies has discouraged foreign investment in oil fields, causing production to stagnate. The result: Iran's oil exports could dry up in as little as a decade, according to some who have studied the situation. That's a looming disaster for Iran, which derives about 85% of its export income from the sale of oil.
...
Once seen as little more than a giant petrol station to the world, Middle Eastern oil suppliers are now becoming some of the largest consumers of energy anywhere. They are attempting to diversify their economies, often by encouraging energy-thirsty industries such as refineries and processing of metals like aluminum. Meanwhile, record numbers of young people are growing up and establishing households. Already, the Middle East and North Africa's population of some 300 million consumes almost as much oil as 1.2 billion Chinese.

Iran, where a huge population bulge is reaching adulthood, is confronting the export crunch earlier and more acutely than others. Iran already consumes more oil than all but 15 other countries on earth, according to the International Energy Agency, which monitors the world energy market. In 1995, Iranians used the equivalent of 34% of the oil they pumped from the ground, exporting the rest. Last year they used 40%.
...
Iran will also have to keep ahead of Iranians' own thirst for gas and oil, which is growing at a double-digit pace. So far, it is losing the race.

Much of the problem is waste. A recent study by a parliamentary committee said that 18.5% of the country's electricity is lost before it even reaches consumers, due to rickety infrastructure, corruption and mismanagement.

... subsidies make energy practically free in Iran, discouraging any serious energy conservation. Gasoline, for example, costs about 40 cents a gallon at the pump. That's encouraged an explosion of use, as Iranians add new cars while continuing to use fuel-guzzling old models. It has also encouraged a brisk smuggling trade as Iranians buy millions of gallons of fuel at the subsidized price and truck them into neighboring Pakistan, Turkey, Afghanistan and Iraq for sale at market rates.

GCC plus Egypt and Jordan

Washington Wire:

After numerous meetings over the last year with the six-nation Gulf Cooperation Council, plus Egypt and Jordan, the Bush administration wins a breakthrough — of sorts. The GCC Plus Two, a group the administration sees as a budding front against Iran, issued its first-ever communiqué.

But the statement leaves out any mention of Iran, referring instead to the importance of regional stability and the group’s “collective desire to prevent Iraq from becoming a battleground for regional and international powers.” The intentional omission reflects the sensitivity that that the Gulf countries of Oman, United Arab Emirates, Saudi Arabia, Kuwait, Qatar and Bahrain feel about provoking Iran, the region’s rising power.
. . .
In a slightly more pungent line, the group says it “welcomed the commitment by the United States as stated in President Bush’s recent speech to defend the security of the Gulf [and] the territorial integrity of Iraq.” Bush said in his Iraq speech last week that he was sending another aircraft carrier to the Gulf and would cut off Iranian networks in Iraq.

Also, Saudis pass on the idea of squeezing the Iranian economy by pumping up oil production. Of course, with oil already at $51/barrel, out-of-control governments like Iran and Venezuela will be squeezed and will have to discipline their spending and over regulation.

Troop surge and oil prices :: WSJ blog

Link:

A “troop surge” in Iraq could trigger a surge in oil prices, too, says Joseph Quinlan of Bank of America.
. . .
Quinlan raised the specter of greater anti-American sentiment overseas, and a backlash against the dollar, “with petro-states like the United Arab Emirates, which just announced its intention to diversity out of the U.S. dollar, leading the way.”

The UAE is not an anti-American state, nor is it filled with a populace that is anti-American. Just to be clear, it has diversified its portfolio for purely economic reasons.

Quinlan also is quoted as saying such an oil price surge could knock the wind out of the global economy. I'd say most of the increase in oil prices that we have seen throughout the war has been demand driven - growing demand in India and China - and not due to troop levels. Why should that change now?

Great Man of History, Human Nature and Culture, and You

By now you probably know that you are Time Magazine Man of the Year:

The "Great Man" theory of history is usually attributed to the Scottish philosopher Thomas Carlyle, who wrote that "the history of the world is but the biography of great men." He believed that it is the few, the powerful and the famous who shape our collective destiny as a species. That theory took a serious beating this year.

To be sure, there are individuals we could blame for the many painful and disturbing things that happened in 2006. The conflict in Iraq only got bloodier and more entrenched. A vicious skirmish erupted between Israel and Lebanon. A war dragged on in Sudan. A tin-pot dictator in North Korea got the Bomb, and the President of Iran wants to go nuclear too. Meanwhile nobody fixed global warming, and Sony didn't make enough PlayStation3s.

But look at 2006 through a different lens and you'll see another story, one that isn't about conflict or great men. . . .

Carlyle - I have noted several times - also gave economics the label "the dismal science", for reasons you thought you knew. He was denouncing economics because it conflicted with his view that history is driven by great men and great races, whereas economics claimed races are equals but cultures and institutions exlained differences in the success of nations.


There are several related items in Sunday's Washington Post.

1. Culture Matters:

The war in Iraq has produced many casualties. One lesser-noticed one may be the death of an idea -- the idea that the culture of a nation or region can be transformed quickly by well-intentioned foreigners. The recent report of the Iraq Study Group scarcely mentions the grand goals of bringing democracy to Iraq, and instead contemplates a drawdown of U.S. combat troops. It seems that the notion of transforming the political culture of the Middle East has been drawn down as well.

"Are the people of the Middle East somehow beyond the reach of liberty?" President Bush asked in 2003. "Are millions of men and women and children condemned by history or culture to live in despotism? I, for one, do not believe it." As his audience applauded, he went on to criticize the "cultural condescension" of skeptics who believe that Islam and democracy don't mix.

The president was, at best, half right. In the long run, the values of freedom may be right and true for all people in all societies. But the cultural values favorable to pluralism and entrepreneurship are indispensable to building democracy and capitalist prosperity.
. . .
Some cultures and some religions clearly do better than others in promoting democracy and prosperity. Iraq and Afghanistan show that, where culture is adverse, a blind belief in the power of freedom is a frail foundation for U.S. policy.

But culture is not destiny. The failures in Iraq and instability in Afghanistan do not prove that these or other countries are condemned to stagnation and political oppression. For politics to change, however, culture must change, too -- and that takes much more than dispatching troops, holding elections and writing constitutions.
. . .
Like other young idealists, I believed that President John F. Kennedy's Alliance for Progress -- a "Marshall Plan" for Latin America -- would make the region safe for democracy.

But as I encountered daily the intractability of Latin America's problems, it became clear to me that poverty and injustice were rooted in the region's values. I was learning what Federal Reserve Chairman Alan Greenspan would articulate years later, after the Russian economy collapsed in the late 1990s. "I used to think that capitalism was human nature," he reflected. "But it isn't at all. It's culture." The same is true of democracy.

2. Unlikely hypothesis: "Middle East. Former president Jimmy Carter defends his bestselling new book, which blames most of the problems in the Middle East on Israel. He's now planning a sequel, which blames most of the problems in "Ishtar" on some assistant producer named Mordecai Rabinowitz. In other news, Ahmadinejad insists he's never worked as a presidential ghostwriter."

3. Daniel Drezner examines the grand strategy of promoting democracy and free markets. About the Iraq Study Group he observes:

Two major public statements, coming less than a week apart, nicely capture the confusion besetting U.S. foreign policy these days.

The first is the report of the Iraq Study Group, released on Dec. 6. In good old-fashioned "realist" style, the report offers nothing about how to promote democracy and human rights in the Middle East, focusing instead on the single-minded, amoral pursuit of the U.S. national interest.

Just five days later, outgoing U.N. Secretary General Kofi Annan delivered his valedictory address, imploring Americans to uphold human rights and the rule of law in prosecuting the war on terrorism -- idealism at its purest.

4. Doubts about Iraqi leader's capabilities persist.

It would be more correct to say doubts about the Iraqi constitution persist. Just as doubts persisted about America's future under the Articles of Confederation. George Washington was a great president under the Constitution which strengthened the power of the federal government. You don't need a Saddam to govern Iraq, but a stronger central government is necessary.

In praise of Pinochet :: Washington Post

Instapundit points us to this editorial at The Washington Post. An extract:

His death forestalled a belated but richly deserved trial in Chile.

It's hard not to notice, however, that the evil dictator leaves behind the most successful country in Latin America. In the past 15 years, Chile's economy has grown at twice the regional average, and its poverty rate has been halved. It's leaving behind the developing world, where all of its neighbors remain mired. It also has a vibrant democracy. Earlier this year it elected another socialist president, Michelle Bachelet, who suffered persecution during the Pinochet years.

Like it or not, Mr. Pinochet had something to do with this success. To the dismay of every economic minister in Latin America, he introduced the free-market policies that produced the Chilean economic miracle -- and that not even Allende's socialist successors have dared reverse. He also accepted a transition to democracy, stepping down peacefully in 1990 after losing a referendum.

By way of contrast, Fidel Castro -- Mr. Pinochet's nemesis and a hero to many in Latin America and beyond -- will leave behind an economically ruined and freedomless country with his approaching death. Mr. Castro also killed and exiled thousands.

So is this a story about uniqueness, of personality, or is it possible to predict and select the dictator that will (1) institute free market reforms, and (2) bow to the reinstatement of democracy? Certainly it is a story that illustrates that South American countries are capable of reform. But is a dictatorship necessary to trigger the first working example?

What can be learned that might apply to Iraq and the Middle East?

Instapundit :: Oil trust idea lives (?)

Not so fast, Instapundit. The NYT article you cite says:

Iraqi officials are near agreement on a national oil law that would give the central government the power to distribute current and future oil revenues to the provinces or regions, based on their population.

It says nothing I can see about what you and Hillary and Barone have been advocating -- distributing, in Barone's words, "part of the state's oil profits in payments to every individual." (Emphasis added.) To. Every. Individual.

As I have been said economist Vernon Smith has an even better idea, an Iraqi People's Fund, and he's been saying it since the capture of Saddam:

For long-term success, the enormous task of nation rebuilding in Iraq requires attention to more than the creation of a political democracy. No matter how well-intentioned and democratic it might be, the next government will be tempted to corruption, violation of rights and expanded political power if it owns and controls the great economic wealth potential of Iraq. This is the time, and Iraq is the place, to create an economic system embracing the revolutionary principle that public assets belong directly to the public -- and can be managed to further individual benefit and free choice, without intermediate government ownership in the public name.

In Iraq, the rights in question are to the former government's producing properties, transportation, terminal facilities, waterways, land and subsurface rights. These assets should first be declared transferred to the account of the citizens, recognizing the birthright of each citizen to a personal, empowering property right in the land and assets of the country of their birth. All citizens should have an equal share in this fund and be issued the same number of share claims to the fund.

Again, I've added the emphasis.

An Emirati's Thoughts on America

Link:

What a farce. You people do not appreciate great men in your presence. If it wasn't for Bush Sr. you would be the serfs of Saddam and his schoolgirl rapist spawn. If it wasn't for Bush, that psycho Saddam would still be ruling Iraq and murdering people in the hundreds of thousands.

You Intifada cheering hypocrites. America is the UAE's best and most reliable ally. America is why you can study in University and be free to say these things. America is the most moral and just empire in the history of mankind. It could murder all 25 million Iraqis and the case would be closed. It could take on the entire world, subjugate it, enslave it and have it work for it.

Palestine never did anything for the UAE. Egypt never did anything for the UAE. Hosni Mubarak and the PLO would not shed a tear or give a damn about this country if it met it's doom. The Americans helped us in 1986, they will help us in the future, and no stupid ports debate or anything similar will deter my belief in America as an ally.

He's referring to Bush Sr.'s recent Q and A with students in Abu Dhabi.

New thinking on Iraq :: Econbrowser

Quote:

we propose that the United States make a financial commitment to Iraq which takes the form of ensuring that its Sunni provinces get oil revenues proportional to their share of the population over the next decade or possibly more.

Via Truck & Barter.

Nobel economist Milton Friedman dead at 94

• Instapundit
• Marginal Revolution - 1, 2, 3, 4, 5
• Virginia Postrel
• The EclectEcon
• TigerHawk
• Greg Mankiw
• Tennis with Milton
• WSJ - 1, 2
• Becker
• Posner
• Mahalanobis
• Truck and Barter
• Milton and Rose disagreed over Iraq
• An exception to the rule of tall economists (via Caplan)
• Milton Friedman remembered (via The EclectEcon)
• Clive Crook at National Journal

Aplia has a great roundup of obits, blog links, and multimedia links.

Corruption Perceptions Index 2006 :: Transparency International

The UAE is 31st best worldwide. USA is 20th. Iraq is one from the bottom. Haiti is last.

Is Al-Qaeda taking a page out of the Hezbollah state-within-a-state playbook?

Tehran Times (Reuters):

Al-Qaeda wants to build a political operation in Iraq to broaden its campaign against the U.S.-backed government, a top U.S. general said on Wednesday.

Citing intelligence mostly gathered since the death of al Qaeda's former leader Abu Musab al-Zarqawi in June, Major General William Caldwell said the militant group appeared to be refining its approach beyond bombings and beheadings.

"Al-Qaeda in Iraq wants to present itself as a legitimate organization and is striving to increase its operational power by building a political base with a military wing," Caldwell told a news briefing.
. . .
He said the militant group was producing propaganda to exploit Iraqi anger over high unemployment, poor security and unreliable supplies of electricity and fuel, and turn it against the government and its U.S. backers.

"Al-Qaeda in Iraq, through the media and other grassroots propaganda, will promote a theme that portrays the Sunnis as under attack by coalition forces, and the government of Iraq as being corrupt," he said.
. . .
"Al-Qaeda in Iraq realizes killing of innocent Iraqi civilians has damaged their public support and is working to reverse that perception.

By no means does it mean they intend to stop creating sectarian violence, but rather change the perception," he said.

Hezbollah's two wing strategy:

NABATIYEH, Lebanon — Two days after agreeing to a cease-fire to end 34 days of fighting with Israeli forces, Hezbollah deployed its army of social workers and engineers throughout this southern Lebanese city.

They visited wrecked homes and businesses, surveyed damage, gave compensation estimates and coordinated relief efforts with city officials. "Hezbollah workers were here even before the bombing stopped," said Mustafa Badreddine, 50, the mayor. "They have offices here. They have municipal resources. And the people trust them."

The Shiite Muslim militia's network of social workers serving its mostly Shiite following rivals the group's military component. The assistance is a cornerstone of Hezbollah's strategy to gain popular support.

Sheik Hassan Nasrallah, the group's leader, has pledged to help rebuild the homes lost during the month-long war. He didn't specify the source of the funding. Hezbollah also is helping residents coordinate reconstruction efforts with assessments and contractors, Badreddine said.
. . .
On Tuesday, the second day of the cease-fire, Nahle said Hezbollah workers visited his ruined home, surveyed the damage and promised to call soon to tell him how to receive money for repairs.

As a backhoe chewed through the remains of his home, Nahle said the destruction he suffered was worthwhile. "Sayyed Hassan gave us a victory," he said, referring to Nasrallah's honorary title. "We beat the strongest army in the Middle East. Even if they kill our women and children and parents, we will still support him."

Like its military wing, which relies on secrecy to prevent infiltration by outside agents, Hezbollah engineers avoid contact with strangers. They were not seen when reporters toured the city.

Badreddine explained how they work. He said a team of up to five workers is assigned to a city district. They coordinate efforts with a local contractor and city officials. Workers at the contracting firm declined an interview request. They said only designated Hezbollah leaders are authorized to speak to the press.

After visiting sites and making assessments, the workers connect residents with contractors, who begin rebuilding, Badreddine said. He said the Hezbollah teams out-hustle and out-finance government officials working on the same task. "The government is waiting for Hezbollah to give them the information," the mayor said. "If you let the government do it, half the money will go into their pockets."

Are Al-Qaeda and Hezbollah prepared to allow a state of normalcy where people are not dependent upon them, can take care of themselves, and have a central government strong enough to maintain order, protect people and property, and provide basic public services?

And where is the money coming from? If you don't create wealth you must be getting from someone.

Iran resumes gasoline imports

ALARAB ONLINE:

Fuel-hungry Iran has bought several cargoes of gasoline for delivery in September, which oil traders say may mean Tehran is still financing imports, despite a threat to stop and impose politically risky fuel rationing.

Iran's reliance on imported gasoline could be a weak point were it subject to international sanctions in a dispute with the West over its nuclear programme.

Even without sanctions, the rising cost of the fuel drains away the OPEC nation's oil wealth.
. . .
Iran has been spending billions of dollars a year to feed a an expanding fleet of cars featuring many carefully maintained 1960's models that burn rapidly through the costly imported gasoline, lavishly subsidized at a price of 9 cents per litre."They cannot resist the demand," a trade source said.

Over the past two years, the republic has been one of the world's largest consumers of imported fuel, buying between 15 and 20 cargoes of gasoline per month, amounting to 189,000 barrels per day.

That is roughly 1/6 the volume imported by the biggest buyer of the world's excess gasoline, the United States.

But this year, Iran's government called a halt to the expensive subsidies and said Iran would have to get by on its own refining capacity, capable of satisfying only about 60 percent of its 70-million-litre-per-day gasoline needs.

The fuel import budget was capped at $2.5 billion in the year to March 2007, down from $4 billion the previous year.
. . .
Trade sources say Iran's imports have also varied recently with its success in combating smuggling.

The subsidies fuel a burgeoning black market, re-selling the imported gasoline to Iran's neighbours, which can run to a rate of 10 million litres per day, according to one estimate.

The fuel leaves for Iraq, Pakistan, the United Arab Emirates and other Gulf countries by all available means, including makeshift underwater tanks tied to vessels departing Iran, and even on camel back.

Iran is afraid of its own people. It would be so much wealthier if it had the trust of its people to rationalize gas prices, and redeploy the subsidies to money better spent. But it doesn't have that trust. So it uses continues to subsidize gasoline, a transfer that is easily seen and widely dispersed - and not so easily corrupted as would be other government spending. And create international tension to incite more fervent internal support.

Post War Economics :: Aplia Econ Blog

Brandon Fuller, a regular contributor to Aplia Econ Blog, draws our attention Austan Goolsbee's latest column for Economic Scene at the New York Times.

Goolsbee marshalls evidence that countries can recover from the devastation of war. That is, if they are not "artificial states."

Iraq is an artificial state.

In Fuller's words:

Iraq's artificial borders pose the biggest threat to prosperity because they force a contentious mix of ethnic and religious groups to live within the same national boundaries.

I am reminded of what Milton Friedman had to say about homogeneity of a country's population.

The Iraq Index :: All Things Conservative

Electricity output is up, successful attacks on the oil sector are down. Direct violence against civilians is up. (Indirect violence being attacks on the infrastructure that improves life.)

Have terrorists changed their preferences, or have they changed their choices of targets due to improved defense of infrastructure? Economists tend to look for changes in behavior induced by changes in incentives rather than changes in preferences. People - economists believe - are less likely to experience a change in heart than they are to face a change in price. As it becomes more costly or less likely to succeed at attacking a power plant or a pipeline you may see less violence, but you are more likely to see a substitution in violence towards other targets.

Youssef Ibrahim: Royal dreamers build castles in the sand

Bio of Mr. Ibrahim: "Served for 18 years as senior regional Middle East correspondent for the New York Times and for 6 years as Energy Editor for the Wall Street Journal. . . Mr. Ibrahim writes weekly and bi-weekly columns in Gulf News and the Daily Star."

Here's what he wrote in the New York Sun this week:

DUBAI, United Arab Emirates - Drive by Media City and into Internet City here and be dazzled at the giant signs above the buildings. There's CNN and MSNBC, and there's Microsoft, Oracle, and Acer.

Not too far away is Financial City, with Merrill Lynch, Goldman Sachs, and more investment-banking muscle. All the elegant signs shimmer under the scorching sun, which bakes the super-modern air-conditioned buildings these international powerhouses inhabit. But wait a minute - are they really there? Is anyone inside?

Nope, this is a bit of trompe l'oeil decor meant to suggest a far greater presence, indeed a headquartering, that is simply not the case.

Once inside, the visitor will quickly discover a few representatives, or perhaps a service person. That's it.

He concludes:

But it's clear the emperor has no clothes. Real estate has stagnated; prices are heading down. The same goes for stock markets in the Arab Gulf region, which last year and this year have dropped by more than 60%. It is, and was, all about speculation on very little. Industry is not the hallmark of the Middle East's desert lands, nor is agriculture, software, or hardware. When investors make nothing, they can only speculate so much before the crash.

"What you see is not what you get" might be a better description of the big oil boom in the Middle East. Meanwhile, the smart sheiks who sold the desert are moving their money out into the real world.

Take Sheik Mohammad Bin Rashed Al Maktoum, the guy from the Dubai Ports episode - as well as the emir of Dubai and the prime minister of the United Arab Emirates. Before and after the Dubai Ports acquisition - itself a $7 billion investment essentially in Britain - Sheik Bin Rashed bought the Tussauds Group for $1.5 billion, the Essex Hotel in New York and other American real estate properties for $1.5 billion, and a group of hotels in Europe and Asia for another $2 billion. In other words, the sheik invested his profits from selling Disneyland desert fantasies in enduring assets outside the Gulf.

It's hard to feel any affection these days for the "Lawrence of Arabia"-style reporters writing about the world's largest artificial ski resorts, tallest buildings, biggest marinas, and hugest shopping malls. They all suggest that a magnificent civilization is rising on the shores of the Persian Gulf. My advice is to look deeper.

Dubai continues to invest in "enduring assets outside the Gulf":

A Dubai government fund has announced the purchase of a landmark building in the heart of New York City for 1.2 billion dollars as the Gulf Arab state blazed ahead with its Big Apple investment binge.

The 32-storey building on 280 Park Avenue in midtown Manhattan, one of the world’s most expensive property locations, was bought by Istithmar from Boston Properties, a publicly listed real estate investment trust.

“We are delighted to work with Istithmar on this transaction and we look forward to a long relationship with them”, Boston Properties chairman Mortimer Zuckerman said in a statement issued by Istithmar.

“Park Avenue is the hub of global operations. Two-Eighty Park Avenue is a particularly attractive corporate location”, said David Jackson, Istithmar chief investment officer. “Within the real estate sector, Istithmar targets projects that are positioned to experience long-term, substantial capital appreciation”.

The 1.2-million-square-foot building, which has a ziggurat type structure reminiscent of ancient Assyrian and Babylonian temples in Iraq, was built in the early 1960s to house the offices of Bankers’ Trust Co.

This is the third New York property deal to be announced by Istithmar since November and a source close to the fund, who spoke on condition of anonymity, said several similar deals have been finalized or were in the process of completion.

The source also said the fund is under the direct supervision and control of the office of Dubai’s ruler, Sheikh Mohammad bin Rashed Al Maktoum, who is also vice president and prime minister of the United Arab Emirates (UAE), a federation of seven emirates including Dubai.

The fund had announced earlier that it paid 300 million dollars for a prime Beaux Arts-style building in Manhattan’s Times Square dating from the 1920s that was once the site of the Knickerbocker Hotel.

In May the fund bought Loehmann’s, a 60-store US chain specializing in designer women’s and men’s apparel at discount prices, for 300 million dollars. It also said it bought another building on 230 Park Avenue without disclosing the price.

According to the Emporis Buildings property database, Istithmar paid 705 million dollars for this building and bought a building on 450 Lexington Avenue for 600 million dollars.

The total real estate investments of Istithmar in New York would be 2.8 billion dollars, according to Emporis.

Some Iraq cost metrics

Menzie Chinn at Econbrowser offers some Iraq cost metrics. See also the thoughtful comments to the post.

Bush mulls oil trust for Iraqis:: TigerHawk

Bush is talking about it. TigerHawk is on the story.

I've advocated this before. If it's good for Alaskans, it ought to be good for Iraqis, too.