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Euphrates Center discusses the results of the faltering economic transformation in Iraq
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The Euphrates Center for Development and Strategic Studies discussed at the weekly news forum a topic under the title (stumbling economic transformation in Iraq: problems and machinations) on Saturday, August 3, 2019 at the headquarters of the news agency for culture and information in the holy city of Karbala, with the participation of some academic, human rights and media figures.
The main research paper at the forum was prepared by the researcher at the Center, Mr. Hamed Abdul Hussein Al-Jubouri, which highlighted the following: Responsible for achieving the goals ... Given the importance of the field of economy in addressing the economic problem, there is a set of economic systems aimed at addressing the problem of the economy.
"These systems are the socialist system, the capitalist system and the mixed system," Jubouri added. "The most important features of the socialist and capitalist system must be identified in order to compare them so that the picture of economic transformation will be clear later." The main features of the socialist system are public ownership, state intervention, central planning and the reduction of class inequalities. Among the most prominent features of the capitalist system are private property, state neutrality, market, competition and profit. Socialist system to the capitalist system "
"The economic transformation in Iraq is a formal shift, evidenced by a set of evidence, most notably, state ownership of the means of production, the most important land, its dominance over the oil sector, the ownership of factories and their cessation of work and the contribution of the public sector more than the private sector in capital formation."
The researcher focused on a set of problems, believing that it is the reason for the stumbling of the economic transformation, which is "double transformation (political and economic) and sudden and not gradual, which caused the magnification of the dose received by Iraqi society, the absence of social transformation, which should precede the political and economic transformation, because these two are based on society in the first place. The weakness of institutions, which caused corruption and poor investment climate and the recent volatility of public stability, all of which led to the reluctance of the private sector from economic activity and the failure of the banking system to exercise its basic function of mobilizing savings and lending to investors in the sector. For special. "
The paper concluded with a set of instruments resulting from the faltering economic transformation: "worsening unemployment rates, the fluctuation of economic growth, the decline of foreign reserves, the magnitude of hoarding, the migration of Iraqi capital out of the country, deteriorating infrastructure, and finally external debt."
To further shed light on the subject, the following questions were asked:
Question 1: What are the reasons for the faltering economic transformation?
Postpone the rapid transformation towards a market economy
- Dr. Haider Hussein Ahmed Al-To'meh, Lecturer at the Faculty of Administration and Economics at Karbala University, and the Executive Director of the Euphrates Center for Development and Strategic Studies believes that there are two main factors that contributed to impeding economic transformation in the short, medium and even long term. Thus, there is a curb on the smooth transition towards a market economy, meaning that the shift from the central economy to the market economy requires a reduction in the role of the state, but because of the political situation there is an expansion in the special grades and bodies and even in the employment of labor Satisfied with the transformation of an economy.
The second factor, the unilateralism of the Iraqi economy and its dependence on oil, the existence of a resource that helps the state to carry out its tasks led to the postponement of the rapid transformation towards a market economy and the status of the private sector as the engine of growth and employment generation as the oil resource contributed to the management of the economy.
The political and security complex problem
- Dr. Hussein Ahmed Sarhan, head of the Department of International Studies at the Center for Strategic Studies at the University of Karbala and a researcher at the Euphrates Center for Development and Strategic Studies, believes that the problem of political and security complex is the main reason to hinder the economic transformation, after 2003, Iraq went towards a democratic transition but at the level There is a strong faltering economy, and the pressure of international institutions (the World Bank and the International Monetary Fund) was behind the simple steps, especially after the approval of these institutions on the Iraqi debt schedule in 2004 and not the Iraqi authorities.
The other fundamental aspect is security according to the International Monetary Fund. Without security, we cannot work on economic transformation. Even social scientists point to the importance of security. The framework of the international coalition on the economic aspect in the subject of loans and others.
Ballasts of economic stability
Dr. Qahtan Al-Husseini, a researcher at the Future Center for Strategic Studies, argues that political stability is a prelude to economic stability and leads to economic development. Political and security instability gave politicians and the ruling elite primarily to think about security stability and thus completely overlooked the rentier economy. That provided them with the possibility of financing their activities without the purposeful, scientific and thoughtful planning of an influential economic renaissance.
The second point is the widespread financial and administrative corruption, which is an introduction to every economic confusion in Iraq.If we assume the absence or treatment of corruption, we will have economic theorists moving the Iraqi economy from the rentier economy to the productive economy by virtue of Iraq possessed great resources such as raw materials, labor, minds and others.
Another reason is the prevalence and dominance of the external will, which controls Iraq's economic decisions according to its interests.
Fear and fear and fear of private capital from investing in Iraq, where it is known that the capital cowardly because of the lack of an appropriate environment for investment in terms of economic decisions and in terms of the conditions placed and shackle of freedom of investment and contribute to curb all intentions and desires to invest inside Iraq, whether it is capital Local or foreign, we observe the goal of some decisions is to blackmail the investor and be a brake and investment.
The failed political transformation
- Dr. Ehab Ali Al-Nawab, a lecturer at Ahl al-Bayt University, sees the failure of the political system before 2003, where the London conference was held in 2002 in the presence of the political opposition and US Ambassador Zalmay Khalilzad. The biggest mistake was to dissolve the military, security and media apparatus. Since the political transition is a failed one, it will be followed by a failed one towards a market economy.
A very important aspect, we should not forget the role of society in thwarting the political and economic transformation in Iraq, why? By virtue of the context of the society, which should play the role of the corrector, with the political forces in the destruction of the country, managed by the most important drivers of society are the religious and clan, where these two engines could take the hand of society towards safety.
The laws are invalid
-Al-Haqouqi Ahmad Juwaid, director of the Adam Center for Defending Rights and Freedoms, says that the problem of economic transformation in Iraq is the aging of the legislative system. .
The absence of a unified economic vision that governments should draw, and since successive governments since 2003 have not formulated general economic policies well in the paths of economic transformation, the vision remained confused and contributed to the failure of planning and the continued stumbling of the transformation.
- Ali Hussein Obeid, a writer at Al-Nabaa Foundation for Culture and Information believes that the spread of consumerism among individuals through the transformation of the citizen from a citizen to a consumer citizen. The post-2003 government did not build a single factory, in addition to fighting or marginalizing the private sector, or limiting its potential.
Economic transformation depends on the nature of the elites
Dr. Khalid al-Ardawi, director of the Euphrates Center for Development and Strategic Studies, says that the political leadership to conduct social and economic transformation is an exceptional case like South Korea. This is related to the nature and conditions of society and the elite of the political system, but not all societies such as South Korea. Political transformation to frame the economic and social transformation, the economic and social transformation precedes the political transformation.
The transition to a market economy in Europe was preceded by a social transformation when the bourgeoisie became the leader of society rather than the feudal class, the steam engine became the alternative to manual loom, and when the economy shifted from agricultural to industrial, it took a long time and then the political transformation.
Governments and political elites in the Middle East often try to dominate the economic and social space, which makes any economic or social transformation dependent on the nature of the political elite, if the elite is failing and does not have the vision in unity decision-making and offer special interests over the interests of its people and communities as a result. It will reflect on the nature of economic and social transformation.
In Iraq today, society is not ineligible for transformation. Today, the political elites in Iraq themselves are not qualified to lead the economic and social transformation. This is a serious problem. Is it reasonable that the state today cannot overturn its 80% ownership decision? This means that the state does not want freedom for society, and the absence of a well-intentioned decision-maker to improve the investment environment to attract international companies.
Clans, clerics and religious institutions represent the old guard in social change and the old guard always tries to maintain the traditional production relations and the traditional economic and social reality and does not want to change. The civil state is based on the initiative of the citizen and the effectiveness of the citizen and behavior. And new values based on the individual, the will and freedom of the individual under the umbrella of laws that safeguard rights and freedoms.
Real pillars of the economy
Adnan al-Salhi, director of the Center for the Future of Strategic Studies, the lack of real stability in the political side in order to build the state, if there is an intention to build, we need to draw a long-term plan with real pillars of the economy, all discussed is how to continue the budget.
The other side, which is the private sector is engaged in how to import benefit from profit, but on the part of how to develop the Iraqi economy and how to develop national products there are no ingredients to support the private sector by the state.
Question 2: What are the solutions to correct the economic transformation in Iraq?
The main solutions that the participants focused on were:
1- Reforming the political side as a prelude to achieving political stability and then achieving economic transformation.
2. Fighting corruption by strengthening relevant institutions.
3. Educating the citizen economically through self-reliance and leaving the culture of dependency.
4- Creating an investment climate that encourages the localization of local private sector investments and attracting foreign investments.
5. Operate state-ready factories.
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