The Economist Intelligence Unit (EIU) says that ongoing violence in Iraq is hurting efforts to rebuild the country's infrastructure and generate private investment. Although elections for a legislative assembly are set to be held at the end of January, there's not likely to be any real political stability for months to come.

According to the EIU, progress by American firms that were awarded reconstruction contracts in early 2004 has been slow. In particular, the U.S. Project and Contracting Office in Baghdad said in early December that more than 1,000 construction starts had been made under U.S.-backed programs, employing 85,000 Iraqis. Of the $9.4 billion in funds that have been "obligated," only $1.5 billion is defined as being tied to "work in place."

In the meantime, Iraq's Ministry of Oil has maintained crude oil production at approximately 2.2 million barrels per day for most of 2004, yet it's doubtful that there will be any measurable increase in output for at least 2 years.