Foreign Affairs

Arab Markets Bullish on Bush Troop Surge

Four weeks ago, President Bush called for an increase in the number of troops in Iraq. The proposal would send more than 20,000 additional troops there, most of them to Baghdad.

On January 12, two days after the speech in which the President proposed the surge, economist Larry Kudlow looked at world markets and found that they were reacting positively to the proposal.

More important than the reaction of world markets in general, however, is the reaction of the Arabia Titans Index, the Arab world’s equivalent of the Dow Jones Industrial Average. It showed a jump of 1.1% since the President’s announcement, suggesting that those in the region are optimistic. Even more specifically, the Iraqi market — ISX Price Index — rose by a hefty 5.1% in the two weeks following the speech.

This is not to say that rising markets in any way speak to the moral validity of the Iraq War. But they do tell us what those on the ground, in the region and around the world think about the real-world effects of the proposed troop surge. Investors are practical people, and a surge of investment into a region generally indicates they expect more — not less — stability.

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