A new opportunity to reform Iraq
A new opportunity to reform Iraq
12-7-2022
In the fall of 2022, the World Bank, the Economic Observer of Iraq, issued the report entitled “A New Opportunity to Reform Iraq,” as it indicated that non-oil GDP increased by 8.4 percent year on year, supported by a strong expansion in the non-oil sectors, services and agriculture, as it led The increase in government oil revenues, driven by the increase in export prices and volume, has greatly strengthened the position of public finances and international reserves, as Iraq topped the list of the most developed Arab countries in terms of gross domestic product for the year 2022, and came second in the list of the ten highest developed countries in the world for the year 2022. According to the classifications of the International Monetary Fund issued in the “Global Economic Outlook” report for the month of October 2022, and perhaps the reasons that helped Iraq record a high growth rate during 2022 are due to the growth achieved by 10.5 percent, and the increase in Iraq’s exports by about one million barrels. Compared to the period of the emergence of the Corona pandemic.
Based on the Unified Arab Economic Report 2021, the contribution of the manufacturing and agricultural sectors to the generation of gross domestic product decreases, as agriculture, fishing and forestry contribute by 5 percent to the generation of Iraq’s gross domestic product, and the manufacturing industries by 2 percent, while the extractive industries contribute by 44.2 percent. percent, and this represents a structural imbalance in the Iraqi economy; As the contributions of the commodity sectors are very low in generating the gross domestic product, and this leads to deepening the problem of the Iraqi economy, which does not see real growth in the productive sectors, but growth in the government’s oil revenues as a result of the improvement in oil prices during the years 2021 and 2022.
Although the agricultural sector provides an opportunity for economic diversification, water scarcity and poor quality pose significant risks to the agri-food systems in Iraq. Decreased water availability and crop yields negatively affect GDP and sectoral outputs and increase social and economic challenges by negatively affecting labor demand and productivity, especially unskilled labour.
The World Bank 2022 report indicated that although oil generates most government revenues, the oil sector employs less than 1 percent of the Iraqi workforce, and the public sector is the largest official employer, representing 37.9 percent of the workforce. The private sector, which is mostly dominated by the poor and neediest segments of the labor force, still suffers to a large extent from neglect and informal activity, and a legacy of conflicts, political instability and weak governance increases the decline in private sector investment and growth.
The economy has been affected by the exacerbation of political and economic uncertainty due to the political stalemate that preceded the formation of the new government, which it is hoped will revitalize the implementation of much-needed reforms to put the economy on a sustainable growth path capable of withstanding oil price shocks and the growing challenges of climate change. From oil revenues to face the decline in economic activity in the future and investing some additional revenues to enhance productive capacity and encourage the diversification of economic activity, which is crucial to achieving sustainable and inclusive growth for all, as the intertwined reality of development and climate requires an urgent call for adaptation and mitigation measures that can achieve gains in growth and productivity. However, the financial implications of these packages are significant if they are not accompanied by financial and structural reforms, but there are also risks that high oil prices will reduce the reform push that would deepen structural economic challenges.
In conclusion, the issue that deserves attention lies in addressing corruption, reforming the Iraqi economy, and addressing the challenges while laying solid foundations for the advancement of the various sectors of the Iraqi economy and finding solid grounds for launching ambitious development plans that go beyond the mistakes of previous governments that focused on almost total dependence on oil as a primary source of state revenues and made all their concern It tends to ensure the provision of salaries for state employees, and spending on non-productive consumer needs, as there is a very important issue, as without implementing deeper structural reforms, diversifying economic activity and combating corruption, the heavy dependence on oil in Iraq makes it vulnerable to fluctuations in commodity prices, as Iraq is one of the most countries in the world Depends on oil, and the heavy dependence on oil, the pro-cyclical public finance policy, and the insufficient management of oil revenues, have led to Iraq’s exposure to fluctuations in the prices of goods and services, which reflects negatively on citizens and deepens the economic problem in Iraq, according toTo see the World Bank.
rawabetcenter.com
