Shatha Khalil *
Although Iraq is the ninth richest country in the world with its natural resources – oil, natural gas, mineral materials, water availability and land fertility – these resources are not exploited due to the financial corruption, administrative confusion and planning failure.
The role of economic planning in calculating growth rates goes far to foresee the future, ie, how can the economic and social situation be after a certain period of time? What are the obstacles to achieving this vision? In the light of this, goals are set that the government must strive to implement them so that the vision can be realized and the necessary financial resources and efforts will be supplied.
Iraq faces great economic challenges, the most important of which is: the economic stagnation and lack of funding, which caused an open economic crisis and serious economic and political repercussions. The year 2018 witnessed crises and repercussions that negatively affected directly the sectors of the state and the people especially that the administrative corruption dominates the joints of the state and high rates of loans and debt , which have formed a new crisis may be reflected on the country in the future, as the debts of Iraq have worsened and continue to increase over time, the government does not develop real solutions to avoid crises that will continue to affect future generations , as debts are distributed between borrowing and arrears, loans of ministries and others.
Poverty rates have been higher than they were before , and the productive and service sectors have deteriorated steadily until agriculture contributes no more than 5 percent, the industry has less than 1 percent of GDP, and the only sector the government has been able to develop is the oil sector.
The companies of the Ministry of Industry were meeting the largest proportion of the need of the domestic market until the year 2003, and successive governments tried to rehabilitate and spent a lot for this purpose, but it seems that there are those who oppose this approach from the beneficiaries of continued reliance on imports.
Economic development plans that Iraq can take as a model:
Malaysia.. It may be appropriate to refer to the experience of Malaysia when Mahathir Mohammed became prime minister in 1981 and the country was poor and underdeveloped (52%) of the population below the poverty line. The per capita income does not exceed $ 1200 per year. He developed a plan to explore the future of Malaysia after twenty years , and when his rule ended, it was established in Malaysia (50,000) factories in the field of electronics and manufacturing, and the proportion of people living below the poverty line to only 5% and the per capita income rose to ( 5200) dollars, leaving a large stock of foreign currency to his country, and in exchange for this success story, there are a lot of Developing countries that have been in a vicious circle, not only because of the scarcity of financial resources, as is usually said, but also because there is no clear vision of what the government is trying to achieve, and multiplicity of goals and contradictory results of the policies applied to achieve the objectives .
The Iraqi government has implemented two plans for the economic development of the period (2010-2017). The Iraqi Council of Ministers announced the third five-year plan for the period 2018-2022 and the government is seeking to adopt the so-called 10-year development plan.
The Iraqi Minister of Planning, Salman Al-Jumaili, confirms the National Development Plan (2018-2022) prepared by the Ministry, which represents an important step towards launching the broader national development in the framework of the sustainable development plan, according to the vision of Iraq (2030) guided by a number of policies and strategies based Mainly on human and social capital, the economy of the people and the provision of services at the lowest cost.
The plan paves the way for the building of a future state by addressing the challenges and guided by objectives set in Vision 2030 and providing new opportunities for growth, especially with continued international and regional support for Iraq.
The new Iraqi government should design economic plans to explore the future of Iraq’s economy, in cooperation with all ministries, and the participation of all sectors, to promote the painful reality, to eliminate poverty, unemployment and backwardness and all economic problems and their impact on Iraqi society.
More importantly , to reduce dependence on oil and create an active role for the private sector in the economic activity as the plan should start by saying that it wants to see at the end of the five years the increase in the contribution of the national, Arab and foreign private sector in the total investments of the plan by 40% or more, and identify sectors that Arab and foreign investments would like to address , and then identify the obstacles that stand in the face of this contribution, the most important of which is security and corruption, which hinder foreign investment in the country.
Among the tasks of the plans to improve the economic and social reality are also the reconstruction of the provinces, alleviation of poverty, the promotion of the sectors of agriculture, industry, electricity, health and tourism, reaching an economic growth rate of 7% annually, and provide sustainable employment as ell as increase the production capacity of the oil sector to ( 6.5% ) million barrels per day and the plan also aims to increase partnership with the private sector, and to invite it to contribute up to 40% of the total investments of the plan for five years.
Here we must mention the efforts exerted by the sector alone during the past years, the sector that was able to achieve successes and development and raise the level of production and operation of drilling stations and rehabilitation of oil fields and achieve development, the oil sector.
Agriculture still accounts for less than 5% of GDP, and industry accounts for less than 1% of GDP, reflecting higher levels of poverty than before, while other productive and service sectors are declining.
Role of the private sector:
The private sector is very important for the advancement of the economy in all its forms. It will attract its money to invest in industry, agriculture and services. For its part, the government must reform the “state bureaucracy” to facilitate laws and procedures to implement infrastructure projects and to facilitate the activity of the private sector. If the government is really serious about raising the private sector’s contribution to the development and benefit from Arab and foreign investments, the return of Iraqi capital migrations, and to reduce or even end the debt, it must focus on its vision of the plan on how to increase private investment, to assume a significant proportion of the need for the plan to Finance.
Even if a percentage of less than 40% is achieved by the end of the plan period, this is not considered a failure. Rather, the plan has put this vision on the right track, and when the contribution of the private sector to investment and production increases and conditions for its activity improve, this will be positively reflected on the rise of employment and economic growth rate in non-oil sectors, per capita income, low poverty, and increased non-oil government resources. But all of this and more than positive results depend on the government’s goodwill and efforts to establish security and fight corruption.
The chances of success will be favorable after Iraq rid itself of terrorism. Today, it adopts the philosophy of sustainable development building, building strong partnerships with the national private sector and benefiting from international support, economically and politically, with the unified national political will that will provide a more stable environment to implement the development policies that enable us to activate successful economic alternatives, leading to a multi-national economy, not a unilateral one.
The Iraqi street, the simple citizen, looks forward with caution, anticipation and fear, from the formation of the new Iraqi government; will it be like its predecessors? Or will it save Iraq from the bitter reality it is experiencing at all levels? We will monitor events….
Economic Studies Unit
Rawabet Center for Research and Strategic Studies