The Iraqi economy in 2019 and earlier sailing in the darkness - Adel Abdul-Zahra Shabib
Since the second half of 2014, Iraq has faced severe economic pressures to confront two simultaneous crises, the first being the occupation of ISIS for Mosul and one third of Iraqi territory, and the second is the shock of low oil prices in global markets that affected the Iraqi economy, because its economy is a unilateral economy that depends entirely on the export of crude oil due to bad Administration and sectarian quotas approach, as he was unable to diversify his income sources. These two crises had severe effects on the Iraqi economy, which depleted its financial resources, and exacerbated weaknesses and structural imbalances, and also led to political instability, a decline in the frequency of consumption and investment in the public and private sectors, and the restriction of government spending, especially on investment projects, as the non-oil sector shrank by 0.9 Percent in 2015. The double crisis that the Iraqi economy was exposed to in 2014 led to a sharp deterioration of the public financial conditions and the balance of external transactions, the aggravation of poverty and unemployment, and the widening public financial deficit with the increase in expenditures related to security and war with ISIS. The government resorted to financing the large public financial deficit through external borrowing from the International Monetary Fund and the World Bank, which imposed their conditions and prescribed qualities on the political authority, as loans reached more than $ 130 billion. The figures also indicate that the poverty rate in 2014 reached 22, 5 percent on At the national level, in the governorates affected by ISIS, poverty rates doubled to 41, 2 percent, in addition to destroying the infrastructure of these cities, and the number of internally displaced persons amounted to about half a million of the poor of Iraq in 2014.
The Iraq Economic Prospects Report for 2018 had previously indicated that after the defeat of ISIS at the end of 2017, the difficult task is to rebuild the infrastructure of liberated cities, provide services and employment opportunities for the population, and return the displaced to their areas, and this was not achieved due to the widespread financial corruption and sectarian quota-sharing approach. Also, the rich and oil-rich southern Iraq, which was the poorest region in Iraq, was still not inhabited, which pushed the residents of the central and southern governorates to a peaceful uprising against the corrupt authority that faced them with live bullets, deadly gas, kidnapping and assassinations away from the law. The World Bank estimates the cost of reconstruction in Iraq at 88 billion dollars. How can this amount be saved in light of widespread corruption ???
The Economic Prospects report for Iraq for the year 2019 expected to gradually improve the Iraqi economy after the severe economic pressures witnessed in the past four years thanks to the noticeable improvement in the security conditions and the rise in oil prices. What it was in 2017 in line with the OPEC agreement to reduce global oil production. The report also indicated that the 2019 budget represents a noticeable increase in recurrent spending as high government spending with low oil prices will lead to a high budget deficit, and that low oil prices and increased imports will convert the balance of current transactions to a deficit funded partly by international reserves. In 2019, the government, and successive governments before it, were unable to face the major economic challenges represented by:
1- Destruction of the country's infrastructure.
2- The only rentier economy is the one that totally depends on exporting crude oil without manufacturing it, while neglecting other economic sectors.
3- Not to direct the large oil financial returns to the construction of investment and service projects, but rather to be spent in the areas of consumption and lavish government expenditures, and gnawing a large part of it without directing it to the process of socio-economic development.
4- The aggravation of the problem of unemployment and poverty.
5- The agricultural and industrial sectors lag behind and the country relied on imports to meet the population’s need.
6- Underdevelopment of education, health, and acute shortage of potable water, electricity, and others.
7 - Smuggling oil abroad, as the losses of Iraq from oil smuggling since 2003 amounted to nearly 120 billion dollars.
8- Prevalence of financial and administrative corruption in the civil and military joints of the state and in border crossings.
9 - Housing and random housing crises.
10 - The high external debt of Iraq, which is estimated at 130 billion dollars, knowing that the loan money does not go to building investment and service projects but rather goes into the pockets of the corrupt and the people and the country did not benefit from them.
It is noted that all successive governments from 2003 to the present have not presented economic policies and addressed unemployment, poverty, corruption and economic crises facing the country, as their approach to managing the country's affairs was marked by catastrophic failure. Iraq is rising.