Our economy..and the black swan

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Our economy..and the black swan

Monday 02 August 2021 193

 

Dr.. Ahmed Al Husseini

 

The Iraqi economy still faces many crises, and the reason is due to its rentier nature and the spread of financial and administrative corruption in many of its joints, despite the attempts of successive governments after 2003 to find effective solutions to extricate the economy from its bitter reality, and because of this nature that colors this economy, the swan theory The black swan theory works according to specific mechanisms in the Iraqi economy, and the reader may wonder about the nature of the black swan? What is the relationship of the economy with swans, whether they are black or white?

In general, the so-called black swan is an event that has three main characteristics: it is episodic, it is beyond expectations, or it is difficult to predict, and it includes very severe effects with strong and potentially catastrophic repercussions at times. In order for an event to take the character of a black swan, it must be sudden, unpredictable, and have a great impact, and then after its occurrence, interpretations, expectations and analyzes appear. Therefore, all disasters, internal and external wars, and epidemics, can be called a black swan, especially since it occurs without precedent. Warning and be sudden and unexpected, and have negative effects and consequences on the overall economic activity. And Iraq, as part of the global economic system, was affected by the global recession, which led to a decrease in demand for crude oil, which led to a decline in its prices, down to $ 32 a barrel at the beginning of the pandemic, and the matter did not depend on crude exports, but rather because of social distancing measures and restrictions, which It was imposed on society, and global and religious tourism declined, which greatly affected the formations of the gross domestic product. The outbreak of the Corona pandemic was not a passing event like other waves of epidemics and diseases that struck the world, as neither the Great Depression nor all the waves of stagnation and crises over the past two centuries were with such great attrition and losses in just 6 months, and if we had called the black swans name Despite all the crises, events, disasters and epidemics that have passed on the global economy, the Corona crisis is a black swan that is different from its predecessors, due to its great economic and social repercussions on the entire global economy.