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Dr.. Amer Kurkis Hormuz *: "Economic Development Board" for Iraq, not "Council for Reconstruction

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Dr.. Amer Kurkis Hormuz *: "Economic Development Board" for Iraq, not "Council for Reconstruction



Dr.. Amer Kurkis Hormuz *: "Development Council
Economic development "of Iraq, not the" Reconstruction Council "**
The "Ministerial Platform" presented to the Iraqi Parliament on 25 October 2018 is represented by the President
The new Iraqi government, Mr. Adel Abdul Mahdi, has improved positively since 2003
The curriculum has a number of strengths and provides many opportunities that should achieve a higher rate of growth
Economic development (if implemented)
Efficient, based
Good governance and the rule of law, and adding new energy to the Iraqi economy. The curriculum sets priorities
And graduated targets for ministries to be implemented within specified time periods.
1 The Government Curriculum 2018-2022 suffers serious shortcomings
, Which may expose implementation
The curriculum is at risk and takes the country in a direction that may not serve the national interest and does not improve levels
The lives of the Iraqi people, especially women, the unemployed and those living below the line
Poverty represents about 30% of the Iraqi people. For example, the Platform could have benefited
Of the characterization of the Iraqi economy structure, through a small number of socio-
Economic development
, To provide an overall socio-social platform for the curriculum.
The question is whether the private sector will be involved in a major way, even though the platform appears to be in its promises
Past experience has not been encouraging since at least 2003.
Other weaknesses of the Platform include a lean focus on recovery of manufacturing
The main pillar is a strategy for sustainable economic development with credibility for Iraq.
3. Absence of policies and mechanisms to increase women's participation in the economy and the labor market
. It should also have been
The State shall have the power to allocate oil export revenues, unless the platform expresses its intention to contain
This left the vital role of the new National Oil Company (compare with Sabri Zaer). Saadi,
 ) 2018 4
. The concept that Iraq should move towards establishing a "market economy
"(Curriculum: 67), a German invention in the post-World War II era
Command
Baffling - the idea is unlikely to apply, considering the socio-religious composition of Iraq, and degree
Its economy lagging, widespread tribal labor ethics and rampant corruption
Appreciation.  In this context, this paper focuses on the proposal made in the Platform (page 12)
6 The establishment of the "Reconstruction Council"
.
Target
This paper aims to elucidate the hope that the Prime Minister of Iraq, Mr. Adel Abdul
Mahdi, and his colleagues from the economic decision-makers are taking great care to establish an Emaar board and learn from
Lessons of the history of modern Iraq. The relevant paragraph of the government curriculum reads as follows:
"Seek to legislate a law for the Reconstruction and Modernization Council of the Investment Law and the Investment Authority,
Investment is the primary means of getting rid of the rent economy and dependence on oil,
To launch the real national economy and to address unemployment, lack of services, poverty and ignorance
Disease, terrorism, peace and social stability. "
It is well known that Iraq had established an "Reconstruction Council" (translated into English as an Development Board)
In 1950, under the monarchy. And 70 per cent of Iraq's oil revenues were allocated
To the Development Council at the beginning of its operation, especially for infrastructure projects in the agricultural sector. He did not play
The Development Council plays the role of facilitator / supporter of the development of a strong and export-oriented industrial sector
Despite the fact that Iraq has many competitive advantages and low cost to build a sustainable industry
On the use of energy from crude oil and gas. There are those who believe that the Council of Reconstruction notwithstanding
7 Many of the challenges he faced during the eight years have been remarkably successful
.
What is unclear in the government curriculum is whether the implied intention is to gradually give up
Ministry of Planning, to be replaced only by the Construction Council. As is known, the growth planning system
Which evolved after 1958, and translated into successive national development plans that did not achieve a high degree of
Success. The rate of implementation of the plans was low; it averaged 50-60 percent during the period
8 1960-2017. The explanation of the poor performance of development plans falls outside the scope of this paper
 .
However, when considering the renewal of the idea of ​​the "reconstruction council" by the government of Prime Minister Adel Abdul
Mahdi, it is necessary to think critically and objectively in the new context and transformations
Social, political and economic (turbulent) situation in Iraq since 1958
The Iraqi economy, social and material infrastructure, not to mention the Iraqi citizen, has been enormous
- In fact it is difficult to comprehend the extent of this damage, in addition to the (psychological) damage caused by Before and recently, and before sectarian, ethnic and racial violence throughout
Country. As a result, the current state of the Iraqi economy continues to bear all aspects of the underdeveloped economy
9
.
The establishment of the Economic Development Board for Iraq - a radical approach
In difficult times, such as those witnessed by Iraq at this stage, we usually need a lot
Imagination, alternatives to the status quo, and just as important, there must be will and leadership
Strong political changes that will bring about constructive changes in the economy (and society) in a rational way within a vision
10 and realism of Iraq, which in essence is the continuing improvement of the well-being of all Iraqis
. Must adopt
The new government concept of economic development, which goes beyond the concept of economic growth, which can
The proposed Council may assist in launching it. The concept of development is a concept
More focused
. Here, sustainable development is seen - the latter becoming a clique attached to any economic or other policy
Economic development to represent:
Design and implement policies aimed at initiating, and not only achieving, economic growth, but
Also enhance the skills of multiple employees, education, health, change work ethics, and create opportunities
Work, eradicate poverty, improve the physical environment and infrastructure, to the highest possible levels,
Regardless of race, gender, social background, or region, and are carried out with humanity
In short, economic development revolves around (and must be defined as) continuous improvement of well-being
(llww-glieb) All citizens (Iraqis) can say, with the development of economic development, that it
Support institutions, legal frameworks, good governance, government and effective democracy will develop
Which will help maintain economic development and levels of increased welfare for people
Long-term, from generation to generation. Of course. The direction of causation here goes both ways.
On this basis, rather than renewing the idea of ​​the Reconstruction Council, the program will benefit from the creation of a "Council
Economic development ".
Towards an Economic Development Strategy for Iraq by the Development Council
Economic "
If the government curriculum has concerns about the results of the development planning process since 1958, it should
. Most also lack the view that Iraq does not (at present) have an economic development strategy
Potential projects up to perhaps 3,000 projects included in the development plan
2018-2022 to the socio-economic feasibility study based on standards
Which are internationally accepted
14
(Such as SCBA and IRR / NPV.) ... In essence, the 2018-
In income
2022 realistic expectations on how / to what extent the welfare of the Iraqi people will improve materially
Income distribution and progress in education, health services and housing. Physical infrastructure,
. Forecasts for the period 2018-2022 are also linked to those provided by IMF 15 and so forth
, Ie maintaining the same structure of GDP in one form or another, and 16 for the period up to 2022
This is the case in the year 2015. Despite the modest successes achieved, the experience is
The past 15 years in planning the economic growth in Iraq do not refer to a situation
Healthy.
A four-pronged strategy for economic development in Iraq
In short, we wish the new prime minister and the cabinet to take an economic development program
Year strategy, developed in the context of a comprehensive strategy, consistent with the federal budget for a period of three years
Years. The Development and Budget Program must be approved by the Council of Ministers and the Parliament. Must be
Provide annual review of both, and discussed by Parliament. Therefore, it is realistic to propose a platform
(P. 21) that the federal budget structure and nature should change to reflect a program
Economic development.
The four-pronged economic development strategy should replace the 2018 development plan
- 2022, and can be implemented by the Economic Development Board proposed here, if it turns out that our understanding
The program is correct. The four main axes of strategy should be:
1. Developing the manufacturing sector. This is an absolute necessity to diversify the economy and to reduce dependence
On oil, the focus is on meeting domestic demand, as well as developing targeted industries
For export, Iraq will be able to develop a comparative advantage in global markets within a short period of time
Time in some industries. For example, petrochemicals, plastics,
Pharmaceuticals, cement, agro-processing, poultry production, fisheries, etc.
(Compare with government program: 16; 24); Papers in economic development
Dr.. Amer Kokis Hormuz Economic Development Council for Iraq Page 5 of 12
2. The development of the agricultural sector, which requires strict management of water resources and the development of the skills of the forces
And developing stronger linkages with manufacturing industries. Food security is affordable and high
Rather than quality, to all Iraqis, efficiently productive, is crucial and from land fragmentation to
Small holdings, the program will benefit from the introduction of "agribusiness companies (srairaroirec")
On a large scale, and to reap the benefits of large production savings and long-term investment (cf.
Government curriculum: 22.3; 42);
3. The development of physical and social infrastructure (crsirwi re lacisrw) is the construction of roads
Bridges, airports, housing, schools, hospitals, etc. are key areas for job creation
With good wages, reducing unemployment and reducing poverty. As in other sectors,
Inculcating professional ethics and eliminating corruption or violence) Compare with the government curriculum:
30; 32);
4. The development corridors (rac sraai lolwrioleo) should be established outside urban centers,
To connect with each other and with rural areas. At the same time there must be a strategy
For housing, which creates flexibility in the movement of labor and capital across the country, and relieves pressure
Major urban centers provide services and infrastructure, such as Baghdad, Basra and Mosul
And Erbil.
Proposed Structure of the Economic Development Board
The proposed initial linkages of the EDB with key ministries /
Organizations representing the private economic and social sector have a direct impact on design
Economic development strategy and policy implementation. These links are illustrated in Figure 1 below.


See article for graphics


These links should be reviewed every three years to improve performance. Rules must be set
Operational activities. For example, directors should not serve more than two terms (each)
(Three-year period) The law should define the organizational structure of the EDB
Its responsibilities, budget and financial resources subject to the Board's use for development purposes, etc.
that. To fulfill its responsibilities fully, both the Iraqi Government and the Parliament must review the lessons
Of the planning experience. In this note it is proposed to allocate a percentage of oil revenues to the Council
Economic development to carry out planned projects and to encourage domestic and foreign private investment
Productive sectors of the economy. With the development of economic development in Iraq and the transformation of employment
From the public sector to the private sector, the need for an overly "operational budget" will be reduced
In the federal budget, and then more revenues (oil / taxes) will be allocated to the budget
Investment. "He said.  As described in the law. This means that the development board (rilarora) must not be the regulator
.) alblwrora (
Like the proposed links to the EDB, the structure should be carefully considered
Organizational structure of the EDB, so that it can advance to complex and evolving challenges
He has to face it. The board should be small and efficient, and have a superior staff
A professional reputation is above all suspicions. The EDB should be an effective organization
To ensure the implementation of its policies. The initial organizational structure of the Economic Development Board could be as follows
Figure 2 below:


See link for graphics


If Prime Minister Adel Abdul Mahdi's government wishes to give the private sector a free hand
(See Program 42), economic growth and development goals must be first addressed
Economic development process. This can be achieved partially through appropriate consultations Timely and meaningful with representatives of the private sector, for example "Chambers of Commerce"
"Federation of Iraqi Industries" as well as trade unions and professional in order to address issues from
Which will stimulate the private sector to invest in the productive sectors of the economy, where they may find graduates
Universities and vocational training institutes.
Moving to a market economy will take time out of hard work, with possible setbacks. In the same
At the time, Iraq's "Vision of 2030 - Economic Prosperity" seems unrealistically ambitious -
. The private sector is expected to contribute 56 percent of GDP
The conditions required to achieve this over the next 12 years are not available (see para
In addition, figures from the Central Bureau of Statistics show that a year ago,
1991, the contribution of the private sector to the gross fixed capital formation (GFCF) has declined
A key component of GDP, from 50% to 15% in 2014!
Instead of setting unrealistic targets for 2030, the most realistic scenario would be to create
An environment conducive to the private sector (domestic and foreign) to invest in productive sectors through
Partnerships or establishment of companies contributing to such an environment. Your investor weighs bonuses
Versus potential short / medium-term risks, as many studies show.
In short, such an environment (currently lacking in Iraq) includes eight elements
(Figure 3 below), which takes into account the private investor when investing.
A coordinated and coordinated effort from within the Government will therefore be needed to ensure / stimulate the sector
Private investment. In fact, the private sector (usually) will operate in an environment that helps protect
Its commercial interests under a proper legal framework applied by an impartial judicial body.
Changing the objective conditions to make the government curriculum more effective
Many of the substantive conditions must prevail to consolidate economic development in Iraq. Include
These conditions are the political will to change to a secular state, change the political system (iriwa) of the state,
Change the 2005 Constitution, make it secular, not religious, and open the way for the formation of political parties
Democracy / secularism and the activation of civil society; communities and trade unions
Representatives of private companies and real change towards girls / women education and market participation
Action, and elimination of tribal work ethic, especially in government, and last but not least, service
Iraq and the Iraqi people.
It is difficult to achieve these objective conditions in the short and medium term. If you start a process
Economic development, a gradual transformation will occur, which in nature may facilitate such
Changes, long-term.
At present, the establishment of the Economic Development Board can be a positive first step to
Front. For the Council to be effective in achieving its objectives, one of the basic conditions is a framework
Legal support can work within it. This means that all laws that affect the
The economic activity of individuals and companies as well as the public sector, to avoid random decisions
And contradictory. Examples of these are: Labor Law (37) for 2015; Investment Law 13
(2006); Corporate Law 21 (1997); Industrial Development Act 164 (1964);
Major projects 157 (1973) and the Economic Institutions Act 98 (1964)
"Development Board" revoked No. 33 (1950) some lessons when issuing the Development Council Act
Economic development? As mentioned above, the Council should not be the same as the organizer; otherwise, it will be
Spread the seeds of corruption easily.
Finally
In the proposal to re-establish the Reconstruction Council (State Curriculum 12), a prime minister must be appointed
Minister Adel Abdul Mahdi not to repeat the roles and responsibilities of ministries /Such as the Ministry of Planning, unless the latter is seen
As redundant in the light of the trend towards market economy. In this case, the
The Economic Development Board, with a specific investment budget of oil revenues, will replace
The Ministry of Planning.
If the government chooses this path, it is strongly advised to ensure that the new Economic Development Board
Becomes oarekmooroiol) for economic development. Shall have effective and effective Council)
Economic development with appropriate experience, acting in a purely professional manner, and reporting to a president
Ministers / Cabinet, Parliament must approve the proposed economic development program
3 years in the context of a strategy for economic development. He must have authority
And the budget for the implementation of the approved program. Parliament can and should be legislated to allocate a certain percentage
Of the oil revenues of the Economic Development Board to invest in strategic projects, and the use of part
Of funds to stimulate the private sector to invest in the productive sectors of the economy.
Finally, if the government is serious about initiating economic development, its strategy must be
Investment in manufacturing as its first priority, although this may conflict with the advice of organizations
. It should invest its second and third priorities in agriculture, infrastructure and social development
Respectively. This effort should be supported by an appropriate legal framework that can be achieved. If this happens,
The proposed Economic Development Board may have a good chance of success.
(*) An Iraqi economist living in Britain
(**) Translation by Dr Adel Kanish is required from English and a review by Dr. Barrak Shubar
Copyright ©️ Iraqi Economists Network. Reproduction is permitted provided that reference is made to
Source. 2 December 2018

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