Is the “white paper” behind the recovery of the Iraqi economy or oil?

Is the “white paper” behind the recovery of the Iraqi economy or oil?

7-4-2022

Despite the security and environmental risks and the political impasse that the country is experiencing, the Iraqi economy has witnessed a remarkable recovery, as a result of the increase in the price of oil in international markets, which contributed to the increase in government revenues at a positive rate.
According to the reports of the Bank and the International Monetary Fund, it was found that Iraq is at the forefront of the fastest growing countries in the Middle East, and also in the first ranks in the world.
Despite Prime Minister Mustafa Al-Kazemi’s talk about saving Iraq’s bad economic situation through the reform “white paper” project that his government adopted last year, economic observers believe that this recovery came as a result of high oil prices, and not as a result of smart economic plans or strategies that they followed. the government.
The white paper is a comprehensive road map aimed at reforming the Iraqi economy and addressing the serious challenges it faces, which have accumulated over the past years due to faulty policies, mismanagement, corruption and lack of planning, in addition to the almost total dependence on oil as a primary source of state revenue.

Increase in cash reserves
Last week, the Iraqi Prime Minister announced that foreign exchange reserves had risen to $76 billion in the Central Bank, stressing that the reserve was $50 billion when it was received by the government about 3 years ago. He considered this to be “the fastest growth in the monetary reserve in the history of Iraq,” and he also expected that the reserve would reach $90 billion by the end of this year.

However, the economic expert specializing in managing economic crises, Ali Jabbar, told Al-Araby Al-Jadeed that “all the general indicators that are being circulated indicate a clear recovery in the volume of cash revenues, as a result of the rise in oil prices globally, and not as a result of smart economic plans or strategies followed by the government. “.
He explained that “after the two crises of Corona and the decline in oil prices, the deflation rates in 2020 reached approximately 11.3%, and improved by 1.3% during 2021,” stressing that “the monetary increase in Iraq’s revenues after the devaluation of the dinar against the dollar at a rate of 23%, with an increase The average price of a barrel in 2021, at an average of $68.3 a barrel, contributed to an increase in government revenues by 78%.
He added that the GDP growth is estimated at 33% due to the impact of the monetary increase that occurred as a result of oil revenues and not by the positive impact of the growth of the Iraqi economy, in addition to the expectation of a decrease in the public debt ratio to a rate of 54.8% this year compared to 2020, which was at rates of 64.7% of the total general output.
With regard to general economic growth for 2022, the economist expects that “the growth rate will reach about 8.9%.” He stressed that “this growth was achieved as a result of the effects of oil export rates and international prices,” pointing out that this type of growth and increase made the future of the economy constrained by the pressures of the economy limited in revenues, as well as the management of spending revenues negatively at rates of negative operating budgets exceeding 87% of public budgets.
He pointed out that “the cash revenues financed by the sale of crude oil are still wasted in a chaotic manner without developing wise economic strategies on how to invest them to stimulate the inactive sectors within the country, in addition to the dangerous rise in the rates of waste and theft in the movement of government spending (unproductive) that It is adopted by public budgets, as well as the almost lack of real control procedures.”

The expert continued his speech, saying: “Despite the increase in the volume of revenues and the recovery of the economy, the poverty rates in Iraq exceeded the 31% threshold, and there are more than 4.2 million people living in the margin line, offset by a dangerous rise in unemployment rates among the labor force exceeding 13%. “.

A jump in oil revenues
, according to the final statistics issued by the Iraqi Oil Marketing Company SOMO. According to a statement by the Ministry of Oil, exports and revenues for the month of May amounted to about 11 billion and 477 million dollars.
For his part, a member of the Finance Committee in the former parliament, Falah Abdel Karim, confirmed what the experts spoke, telling Al-Araby Al-Jadeed that “the positive improvement in the economy came as a result of the rise in global oil prices, not as a result of the reform measures taken by successive governments.”
He added, “In light of the high oil prices, Iraq needs an integrated economic plan to save the country from potential crises, especially since oil prices are unstable as a result of the political and economic turmoil that the world is experiencing as a result of the war between Russia and Ukraine.”
Abdul Karim pointed out that any recovery in the economy that does not achieve stability and dignity for the citizen is not considered real growth, because improving the living conditions of citizens is the most appropriate indicator and measure to know the economic indicators of any country.

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