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The rentier economy in Iraq reveals the weakness of the state and planning

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2020/11/14 12:20     Readings 213     Section: Reviews


The rentier economy in Iraq reveals the weakness of the state and planning

Baghdad / Obelisk:
Abdul Zahra Shabib


The Iraqi economy is characterized as a rentier, consumer import economy par excellence that depends entirely on the export of crude oil and the proceeds from selling it in the global markets, which are the main source of the country's economy.

Historically, the only rentier economy has contributed to the consolidation of power and the disruption of political participation and the democratic development of the country, as public spending has focused on establishing and modernizing the state's repressive apparatus to secure the continuation of the ruling system and confront any opposing forces that could pose an existing challenge to the established order, as happened with the killing of peaceful protesters.

Relying on a single source such as oil reveals the weakness of the state and planning, as oil prices fluctuate between rise and fall and are unstable and affected by global markets as is happening now, as the country suffers due to low oil prices in world markets from a severe economic crisis, so that it has been unable to pay employees' salaries. With reliance on loans to solve the country's financial problems..

The successive governments since the change in 2003 until today have not done anything to find other sources of national income and activate the non-oil economic sectors, as industry, agriculture, tourism, mining and other economic sectors have been marginalized.

Agriculture in Iraq suffers from underdevelopment and is seen as a secondary sector and Iraq has turned from a producer to an importer. For his food basket from neighboring countries and other countries.

As for the industry, it is dead, except for some small consumer industries, and there was no ambition for the influential ruling powers to transform the country into an advanced industrial country despite the availability of the components of industry in Iraq due to the lack of economic and strategic visions and the rampant administrative, financial and economic corruption.

As for the tourism sector, Iraq is a country of multiple archaeological and historical sites as well as religious sites, and this sector needs support and upgrading it, both religious and historical, and making it a center of attraction for tourists from all over the world.

The Iraqi economy is one of the fragile economies as it suffers from many problems such as unemployment, poverty, financial deficit, huge external debt, low total official reserves, weak infrastructure due to failure to follow sound policies that prevent or limit these problems, the state’s dominance of economic activity and the rentierness of the Iraqi economy, as well as widespread corruption.

The state, despite adopting a new philosophy in the Iraqi constitution within Article 112, secondly, (the federal government and the governments of producing regions and governorates together formulate the strategic policies necessary to develop oil and gas wealth in a way that achieves the highest benefit to the Iraqi people.

The latest techniques of market principles and investment promotion)), but it is still far from achieving this, as it still dominates economic activity and still relies on oil very heavily to finance economic activity and has not improved the management of oil and the economy and did not do justice to the people's rights from oil despite That the constitution has also indicated within Article (112)

First: ((The federal government shall manage the oil and gas extracted from the fields

The current with the governments of the producing regions and governorates provided that their imports are distributed equitably with the population distribution throughout the country, with a specific quota set for the affected regions, which were unfairly deprived of them by the previous regime and which were subsequently damaged in a way that secures the balanced development of the different regions of the country. By law)). Was this achieved???

One of the deepening economic problems that all successive governments have been unable to solve since 2003 until today, which led to the popular uprising of the masses in various Iraqi cities, which expressed their suffering, which the current government faced (contrary to the democracy it claims and contrary to the Iraqi constitution) with repression, live bullets, water cannons and tear gas And batons, and the prosecution and arrest of civil activists and assassinations of lawyers and others:

1) Unemployment: Unemployment has increased in a very large way and in all its forms and coverage for holders of higher degrees, graduates of colleges and institutes, and others.

The statistics have varied about it, but it ranges between 25 - 40% and this is a very large percentage as the economic permissible should not exceed 5%, and all have stopped Successive governments after 2003 are helpless in the face of this worsening problem.

2) Poverty: According to the statistics of the Ministry of Planning, the extent of poverty in Iraq has increased to 30% in 2016 due to the decrease in oil prices and the terrorist occupation of ISIS in many areas of Iraq that have been liberated but are still suffering.

Despite its richness in natural resources, Iraq is one of the poorest countries due to mismanagement, the spread of corruption in all its forms, and the adoption of the notorious quota system.

3) The public budget deficit: where the budget recorded a large deficit, as it reached 13.6 billion dollars in 2013 and 22.6 billion dollars in 2016, and in (2017) reached 21 billion dollars and 10.6 billion dollars in 2018, and this deficit is covered by internal borrowing And external, and the external debt of Iraq, if accumulated, would constitute a threat to Iraq.

4) Total external debt: as the proportion of Iraq's external debt has increased in relation to the gross domestic product, and Iraq has resorted in recent years to external loans to face its deficit in its budget through the International Monetary Fund and the World Bank, which are trying to impose their conditions and ready-made descriptions that Iraq should apply in return for it

This is what confuses the country's economy and makes it subject to foreign agendas that affect sovereignty.

5) The decline in total official reserves: they started to decrease from (66.7) billion dollars in 2014 to (42.4) billion dollars in 2016 according to the report on investment climate in the country.

And for Al Arabiya for 2016, this indicates that there is a problem in the economy that is draining this reserve, which should be increased, not decreased, to be used in critical times.

6) Infrastructural collapse: The presence of strong infrastructure, including transportation, means of communication, electric energy, production technologies, etc., is an important factor in the possibility of achieving economic development.

In Iraq, because of the circumstances that went through, the proportion of investment expenditures allocations has decreased from the total government expenditures for Iraq, and it is known that these expenditures are allocated for the purposes of developing the country's infrastructure.

Iraq's budgets are characterized by a high percentage of consumer expenditures on investment expenditures, which will negatively affect the infrastructure.

7) Financial and administrative corruption: which is considered one of the major pests that hinder the process of socio-economic development and lead to economic decay from the inside and thus its rapid collapse.

According to Transparency International, Iraq has occupied the first ranks among the most corrupt countries, and not all successive governments have been able to Addressing corruption and putting an end to it, but on the contrary, it spread to most of the civil and military joints of the state in light of the government's inability to implement its promises in combating corruption..

The issue of combating corruption and bringing senior corrupt persons to trial was one of the demands of the popular masses.

8) Inflation: that is, a decrease in the purchasing power of money or an increase in the prices of goods and services while it is on the rise.

The problems of the Iraqi economy were not born today. Rather, they are due to accumulations that extend to decades, and were helped to deepen them by the fall in oil prices and the despicable quota system.

The problems of the Iraqi economy are major structural problems that have contributed to creating this deficit now in the federal budget.

Ways must be found to develop the Iraqi economy and move it from a distorted economy to a developed economy.

The state of deficit in the budget is inseparable from the problems of the economic system in the country, which is represented by relying on oil as a single resource for the state's budget and neglecting other sectors such as agriculture, industry and tourism, which represent important resources for the country and which can transform the country, in addition to oil, into a producing and exporting country, not a consumer, if better Manage it.

It is necessary in this regard to develop radical solutions and not the prosthetic, as is happening now, and unrealistic solutions tainted by corruption, which reinforced the features of the class distinction between the citizen and the official who guaranteed his social benefits and privileges.

The industrial, agricultural and tourism economic sectors must be completely restructured so that their revenues become parallel to oil revenues and not rely on oil as the only source of national income, and that building an economy that does not depend on oil alone will double the country's wealth.

In order to put an end to the deterioration and advancement of the Iraqi economy, it is necessary:

1) Work to implement what was stated in the constitution in a real and serious manner by transforming the state's role from hegemony in managing economic activity to the participation of the private sector and entering with it in investments to stimulate and encourage the private sector.

2) To get rid of the unilateral character of the rentier Iraqi economy and work to diversify sources of national income and to activate industry, agriculture, tourism, and fair and progressive taxes.

Oil revenues must be properly managed to ensure the achievement of economic diversification.

3) Providing resolute political will to adopt reform programs capable of achieving economic efficiency and the rule of law.

4) Providing expertise and skills capable of carrying out the reform process.

5) Reforming the legislative and legal frameworks to regulate the functioning of financial markets and the circulation of capital, stocks and bonds for public and private projects.

6) Restructuring the Iraqi economy and making room for the private sector to carry out its activities in partnership with the public sector.

In this regard, the Iraqi Communist Party sees, according to what was stated in its program:

((The necessity of adopting a sustainable development strategy and adopting medium and short-term development plans in conjunction with the regional and local governments aiming at expanding, diversifying and modernizing the economy base, developing human capabilities and rational and efficient use of the country's resources in order to achieve a better level and quality of life for all citizens, while establishing an effective economic policy and undertaking reforms.

It is necessary to secure the coordination and complementarity between fiscal and monetary policy, develop mechanisms for setting the general budget, planning and implementing investment programs, combating inflation and stimulating growth.

The party also sees the necessity of employing oil revenues for the purposes of investment and development in the basic degree, ensuring supervision and supervision over them by representative institutions of the people, combating unemployment, developing human resources, confirming the role of the working class and other workers, rebuilding the countryside, developing its productive forces, advancing the agricultural sector, and paying attention to the state sector as it is a major base for the economy.

National, standing in the face of the call to consider privatization to be able to solve the problems of the economy while encouraging the private sector and its initiatives, fighting administrative, financial and economic corruption, supporting specialized supervisory bodies and their independence, modernizing and expanding the banking system, both governmental and private, combating money laundering operations, providing guarantees of a decent life for citizens and protecting them from poverty and destitution, And reforming and activating the tax system, addressing the housing crisis, preserving the rights of retirees, securing a decent life for them, implementing the public civil service law, and rebuilding economic relations with Arab and regional countries and other countries of the world based on common interests.

The party stresses the importance of resisting the pressures of international monetary and financial institutions to impose the program and conditions of the International Monetary Fund and the World Bank aimed at restructuring and implementing other liberal economic reforms, ensuring that foreign capital does not flow for speculative purposes, and emphasizing foreign direct investment that creates productive capacities.

And job opportunities that contribute to the transfer of technological and administrative expertise and knowledge.

The Iraqi Communist Party also believes the need to ensure state support for industrial projects with a high technological component and large financing requirements as well
Reconsidering the laws of agriculture, agrarian reform, and the advancement of the agricultural and tourism sector, among others.

What will the government white paper do in this area???!!!

 Observation of the obelisk

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