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February 5, 2023[You must be registered and logged in to see this link.]
Baghdad / Obelisk: The Iraqi economy, although it is supported by high oil prices, is still vulnerable to shocks from market fluctuations, due to weak institutions and governance in Iraq, as this greatly affected its ability to use oil resources efficiently.
And the financial and economic system in Iraq is still underdeveloped, accompanied by international guardianship over oil revenues, which constitutes the biggest challenge to successive governments in advancing the state's economy, and this was clearly embodied in the recent dollar crisis.
In its translation report, the International Monetary Fund said that it is estimated that real gross domestic product rose by 8 percent in 2022, driven by a 12 percent growth in oil production to 4.4 million barrels per day last year.
The study showed that oil production is expected to rise to 4.6 million barrels per day this year and 4.7 million barrels per day in 2024, to reach about five million barrels per day by 2027.
The fund added that the rise in oil prices is expected to result in surpluses in the fiscal and external current account for Iraq, the second largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), adding that real non-oil GDP growth is expected to reach 4 percent in 2023.
He pointed out that the Iraqi economy is gradually recovering, supported by strong oil revenues and facilitative policies, and expectations in the near term are positive amid significant oil gains.
Researcher Abdullah Matar considers that the system of government in Iraq is democratic (both organizationally and nominally), but in practice it is not like that, and for many reasons, including the weakness of the judicial authority.
Iraq, which ranks twelfth in the world in terms of proven gas reserves, relies on oil revenues to cover 90 percent of government spending.
However, its economy remains fragile, and insecurity and political instability continue to discourage private investment, pressuring Baghdad to maintain a social pact based on government provision of jobs and subsidies that, in turn, depend entirely on oil revenues.
The International Monetary Fund said that weak institutions and governance in Iraq affected its ability to use oil resources efficiently, as well as the government's ability to provide appropriate public services.
The journalist and writer Ahmed Al-Athari calls for an approach with Lebanon, saying that what happened in it is an inevitable result of consensus and quota governments and the like, and the continuation of the situation in Iraq will lead to a catastrophic situation that is much more dangerous than what happened and happened in Lebanon, and for a number of reasons, the most important of which is the chaos of arms and the absence of actual institutions to run the state, not to mention the weakness Government tools in confrontation.
The report warned that political polarization and social discontent have also contributed to recurring bouts of political paralysis, making it difficult to implement deep structural reforms to diversify and modernize the economy.
The International Monetary Fund urged the government to accelerate efforts to transform public financial management systems, increase non-oil revenues, and reduce huge government salaries. The authorities should also strengthen the social safety net, improve the efficiency of the electricity sector, and reduce corruption.
The report concluded by saying that the sound financial framework will allow for better management of Iraq's oil wealth and reduce vulnerabilities in a highly uncertain global environment.
Translated report + opinions monitored by the Obelisk
Translated by Muhammad Al-Khafaji
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