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Oil prices collapse, economic reforms falter;

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1Oil prices collapse, economic reforms falter; Empty Oil prices collapse, economic reforms falter; on Tue Mar 10, 2020 2:38 pm

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Oil prices collapse, economic reforms falter;


- Two days past  [200308]  

Researcher Shatha Khalil*


The collapse of oil prices in the world markets, brings the economic and societal disaster to Iraq, due to this collapse expected in the next two months;

The absence of planning and indiscriminate use of resources and wealth, organization, coordination, guidance, follow-up and censorship has resulted in chaos and confusion of decisions by the prime minister, parliament, officials, gangs, corruption and the ignorant that will destroy the Iraqi state.

Lack of investments and world bank report

Economic investments of any country are working to grow and develop and make it strong, especially internal investments such as the establishment and development of various industries and infrastructure in addition to stimulating foreign investments at home that directly affect economic growth, most studies have confirmed that the relationship A package between foreign investment and economic growth in the short and long term.

But Iraq remains with all the enormous potential of oil wealth, minerals, agriculture and unique human resources, it cannot build a strong base of investments to boost the economy from sudden fluctuations and crises and attributes the cause to mismanagement and corruption at this stage in the country.

Investment is one of the topics on which many points of view have been raised, and long-term capital flows have been considered the most important instruments that have supported their development programmes through the mechanisms of the external gap surplus on which most countries almost rely on competitive advantages in their trade or Its services within the balance of payments

The World Bank issued the annual report for doing business for 2020 to rank countries and the best environment for the exercise and attracting investment and economic business, and shows the ability of the Iraqi economy to attract foreign capital that works in the field of influencing the joints of the real economy, and puts Iraq within The approach to the world in this regard, and this necessity was based on the attention to the overlap between foreign direct investment and monetary policy.

The presence of factors of strength between economic activities and minimizing the ramifications of rents should be noted, which would enhance the chance of benefiting from foreign investment and reduce reliance on domestic resources.

The Iraqi economy is showing that it has not achieved the required level of economic growth in a manner that is equivalent to its wealth.

The report indicates that the ranking of the countries of the world as well as the Arab and Gulf countries, and the countries that are troubled in reform such as Iraq, have improved.

New Zealand came in first place as it offers the best business environment, followed by Singapore and Hong Kong, Denmark came in fourth this year, south Korea came in fifth place while America and Britain came in sixth and eighth respectively, while Somalia is ahead of Eritrea and the Republic of Venezuela.

As for the share of the Arab countries in this report, it was as follows:

According to the report, Iraq ranks 172nd out of 190 countries in the World Bank's Easy Business Index, which shows that Iraq is an investment-repellent environment, while Saudi Arabia has achieved a qualitative achievement, advancing 30 rankings, becoming the most advanced and reformed country among 190 countries around the world and has managed to console Yaz the country's competitiveness has increased its ranking in global reports, and world bank experts stated in the report that saudi reforms included the establishment of a one-window system for the registration of companies, the introduction of a law on guaranteed transactions and the law of bankruptcy and improved protection of minority investors and procedures to include more Women into the workforce, explained that two or three years ago when these countries began working on some of those reforms oil prices were unstable.

The UAE has strengthened its lead in the Middle East and North Africa (MENA) region in the Ease of Business index and has advanced five places globally from its previous ranking to 16th place.

Arab countries rank

The report found that the most Arab countries that experienced an improved business climate were Saudi Arabia, Jordan, Bahrain and Kuwait. Egypt's absence from the top 10 in the Arab world despite the economic harvest, which it recorded throughout the last fiscal year thanks to a tough reform package, is remarkable.

Bahrain ranked second in the Arab world and 43rd in the world, with bahrain carrying out the largest number of reforms globally, with improvements in 9 of the 10 areas measured in the report, while Morocco was third in the Arab world and 53rd globally. Oman ranked fifth in the Arab world and 68th in the world.

Qatar ranked seventh in the Arab world and ranked 77th in the world. In eighth place in the Arab world, Tunisia ranked 78th, Kuwait followed with 83rd place, while Djibouti ranked 10th in the Arab world and 112nd in the world.

As for Iraq, it ranked 172nd out of 190, and this is against logic and rationality because of a country like Iraq with its enormous potential, and one of the most important reasons that brought the country to this dangerous slope is corruption, quotas, religious parties and gangs, not to mention mismanagement.

Iraq lives on the responsibility of the rentier State and its disastrous machinery, while the political forces, armed groups and centres of influence, which have built their large presence in the body of the Iraqi State and worked to weaken and destroy them.

Where Iraq is moving towards an economic disaster without starting with radical reform, as there are 75 percent of its population depending on the salaries provided by the state and consume about 80 percent of the single oil budget within an economy that is permanently dysfunctional, this is a fact that all Iraqi officials, aware of all the forces influencing the investment decision, are fully understood by the partisan and armed groups that wage relentless war on foreign investment.

A war that begins with pushing these groups to increase the sagging functional mass in the country to obtain the loyalty of electoral votes, through the attempt to be party companies, not the state, a partner for every investor coming to Iraq in exchange for its protection, not to end up linking investment to political evidence, and the deficit of the middle Political decisions are tough but necessary for the future, such as starting administrative decentralization, empowering the private sector, and improving Iraq's reputation on the international map.

At that last point, Iraqi officials are cynically dealing with the World Bank's international reports, which can be said to lack statistical accuracy today and based on the data of previous years.

At its worst, it can be said that this official disdain is part of the war on investment, otherwise the countries that plan for their future after they develop the plans for advancement, set annual budgets to invite researchers, specialized centers and various media to encourage the writing of fair, balanced and realistic reports that put Investors around the world face realities in this or that country, not just impressions, the greatest risk is the oil budget that may find itself in years in the face of an expected collapse in oil prices

The first step begins from speaking out about the harsh realities, and one of these facts is that Iraq, in its current economic situation, is exposed in the coming years to major setbacks that hit the last remaining remaining security, unity and existence, and the threat will not necessarily be terrorist like ISIS or any subsequent development, but the greatest danger is With the oil budget, which may find itself in the face of an expected natural collapse in oil prices, Iraq's rentier economy is unable to find alternatives and is completely surrendering to pre-state forces.

Economic Studies Unit
Center for Links for Research and Strategic Studies

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