The war in Iraq is over. But the battle to transform the economies of the Middle East--the only hope of preventing fanaticism from claiming a generation of young unemployed Arabs and Iranians--is only beginning.
That struggle goes beyond development strategies and touches the roots of Islam. "The people of Iran," the late Ayatollah Khomeini is reported to have liked to say, "did not make the Islamic Revolution to lower the price of watermelons." By that logic, capitalism and Islam are incompatible. Are they?
History may provide some guidance here. The Industrial Revolution started in the English midlands and Belgian forests--regions endowed with coal, canals (along which barges could carry the coal), and skilled metalworkers (who could build coal-burning steam engines). Coal, canals, and metalworkers were the foundation for building, installing, and using the automatic spinning machines, power looms, and railway locomotives that were the first modern machine industries.
Steam power, factories, markets, and industry quickly spread throughout northwest Europe and its settler colonies. By the end of the 19th century, Turin, Vienna, Prague, Wroclaw, Essen, Paris, Lille, Liege, Lyons, and Barcelona in continental Europe, much of Britain and the United States, parts of Canada and Ireland, and Melbourne, Buenos Aires, and Johannesburg (plus, of course, Tokyo) were centers of modern industry.