World Bank: The government has a new opportunity for necessary economic reforms.

[RJG]

World Bank: The government has a new opportunity for necessary economic reforms.

2022-11-22

POSTED ON2022-11-22 BY SOTALIRAQ

 

Translated by / Hamed Ahmed

A new report of the Iraq Economic Observatory of the World Bank stated that the Iraqi economy is currently witnessing a recovery due to the increase in production accompanied by the rise in oil prices, indicating at the same time that while Iraq is considered among the countries in the world most dependent on oil in its economy, it is without radical structural reforms and diversification of the sources of the economy This leaves him vulnerable to the consequences of fluctuating crude prices in the global market.

The report stated that after the economic growth rate in Iraq expanded during the year 2021 by 2.8%, the annual GDP growth of the country increased during the first half of 2022 to 10.5%. Higher oil revenues resulting from the increase in export quantities and prices have strengthened the country’s financial position. in a big way.

Despite several reform initiatives in the country, Iraq is still one of the most dependent countries on oil in the world. High dependence on oil coupled with mismanagement leaves Iraq vulnerable to fluctuating oil prices, and although oil is the source of most of the government’s resources, the oil sector occupies only 1% of the labor force in Iraq. The public sector is the largest official place of employment, accounting for 37.9 percent of the country’s workforce. As for the private sector, it is still a poor, informal sector that is stunted from growth. The report confirms that the legacy of conflicts, political instability, and poor management of state institutions has increased the decline in investment in this sector and hampered its growth.

The report indicates that the new government’s assumption of its duties in October 2022 represents a new opportunity to implement reforms in order to diversify the sources of the economy, taking advantage of the good financial situation that it now enjoys to achieve a sustainable growth path that is able to withstand the shocks of fluctuating oil prices and the growing challenges of climate change crises in the country. . Preserving part of the oil revenues to face any decline in economic activity is crucial to achieving sustainable growth, and laxity in the economic reform process during this period would deepen the structural economic challenges.

 

The report states that the absence of approving the 2022 budget has hindered taking advantage of the rise in oil prices to implement new investment projects. In addition, with a weak business environment, inefficiency in public sector investment, mismanagement, corruption, and lack of adequate infrastructure, all these factors constitute major obstacles to attracting foreign investment, despite some progress in recent years.

The white reform paper prepared by the previous government had included measures to improve the public investment network and redefine the public investment management system based on the best international experiences in this field, but so far these plans have not been fully implemented.

With regard to the consequences of climate change, the report indicated that Iraq is exposed to direct and indirect effects of this issue, as the increase in water scarcity and the decrease in agricultural crops are problems that affect the rate of economic growth and increase the risks of food security, and that this has an additional impact on the socio-economic challenges for the people of the country.

The report calls for the adoption of effective measures to cope with climate change, focusing on better ways of using the water allocated to agriculture for the purpose of its sustainability, which contributes to the continuity of economic income for farmers and the provision of job opportunities while maintaining food security at the same time. To achieve this, there are three main points; It is improving the infrastructure, enhancing innovation and developing administrative work.

These challenges are getting more severe as the country remains completely dependent in its economy on oil only, which leaves that country vulnerable to new economic risks amid the world’s trend towards non-carbon alternative energy, whereby oil loses its role at this stage as a source of imports with the decline in demand for it.

https://www.sotaliraq.com/2022/11/22/%D8%A7%D9%84%D8%A8%D9%86%D9%83-%D8%A7%D9%84%D8%AF%D9%88%D9%84%D9%8A-%D8%A3%D9%85%D8%A7%D9%85-%D8%A7%D9%84%D8%AD%D9%83%D9%88%D9%85%D8%A9-%D9%81%D8%B1%D8%B5%D8%A9-%D8%AC%D8%AF%D9%8A%D8%AF%D8%A9-%D9%84/

[Fairways&Greens]

22 minutes ago, RJG said:

the oil sector occupies only 1% of the labor force in Iraq. The public sector is the largest official place of employment, accounting for 37.9 percent of the country’s workforce. As for the private sector, it is still a poor, informal sector that is stunted from growth. The report confirms that the legacy of conflicts, political instability, and poor management of state institutions has increased the decline in investment in this sector and hampered its growth

Iraq’s problem is simple. The private sector can’t get traction. 
 

1. The people not in government are poor and poorly educated in professions and trades. They lack experience, capital and incentive to participate in building the private sector.  
2. The government doesn’t trust the people with capital to start and run businesses. So the government tries to “run” the private sector.
3. Corruption and inefficiency kill any progress and the private sector never has a chance. 

Iraq needs:

 

1. Education

2. Currency with real value

3. Application of free market economic principles. 
 

Maybe an RV/RI could stimulate the private sector enough to move their economy forward. 🤷🏻‍♂️

[RJG]

 

The Iraqi Ministry of Finance is making "broad changes" at the level of general managers (document)

communitybreakingMinistry of FinanceChange officials

 2022-11-21 11:35

 

Shafaq News/ A document issued by the General Secretariat of the Council of Ministers revealed that extensive changes have been made in the departments of the Iraqi Ministry of Finance.

According to the document received by Shafaq News agency; 6 general managers have been assigned to manage 6 departments in the Ministry of Finance.

The document indicated that the assignment was made according to the request of the Minister of Finance, Taif Sami, and the approval of the Prime Minister, Muhammad Shia'a Al-Sudani. 

The document did not reveal the fate of the managers who were at the head of these departments before this order was issued.

https://shafaq.com/ar/مجتـمع/وزارة-المالية-العراقية-تجري-تغييرات-واسعة-على-مستوى-المدرا-العامين-وثيقة

[keylime]

33 minutes ago, Fairways&Greens said:

Iraq’s problem is simple. The private sector can’t get traction. 
 

1. The people not in government are poor and poorly educated in professions and trades. They lack experience, capital and incentive to participate in building the private sector.  
2. The government doesn’t trust the people with capital to start and run businesses. So the government tries to “run” the private sector.
3. Corruption and inefficiency kill any progress and the private sector never has a chance. 

Iraq needs:

 

1. Education

2. Currency with real value

3. Application of free market economic principles. 
 

Maybe an RV/RI could stimulate the private sector enough to move their economy forward. 🤷🏻‍♂️

An RV/RI would stimulate my private sector 

[ametad]

1 hour ago, Fairways&Greens said:

Iraq’s problem is simple. The private sector can’t get traction. 
 

1. The people not in government are poor and poorly educated in professions and trades. They lack experience, capital and incentive to participate in building the private sector.  
2. The government doesn’t trust the people with capital to start and run businesses. So the government tries to “run” the private sector.
3. Corruption and inefficiency kill any progress and the private sector never has a chance. 

Iraq needs:

 

1. Education

2. Currency with real value

3. Application of free market economic principles. 

Sounds just like you defined where I’m living in The United States of America. It’s uncanny, ironic and makes me laugh out of . . . well, the parallels to the local government are ridiculous. Unfortunate.
 

Yes, EDUCATION is the key. Knowledge is power and wisdom is freedom. 
 

Greed and corruption is the problem, human nature. When human beings can justify desire as human nature and greed as a choice, then perhaps we can evolve. But, I’m not betting on seeing that kind of shift in my lifetime.

[Fairways&Greens]

1 hour ago, ametad said:

Sounds just like you defined where I’m living in The United States of America. It’s uncanny, ironic and makes me laugh out of . . . well, the parallels to the local government are ridiculous. Unfortunate.

We’ll said! Our government too has waste and inefficiency (understatement). Our private sector was raped and pillaged during COVID while the big businesses remained open. Our currency is worth less than we realize. Very unfortunate indeed!