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Economic Sustainability in Iraq: Diagnosis and Solutions DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Economic Sustainability in Iraq: Diagnosis and Solutions

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Economic Sustainability in Iraq: Diagnosis and Solutions Empty Economic Sustainability in Iraq: Diagnosis and Solutions

Post by Ponee Sat Oct 28, 2017 5:18 pm

Economic Sustainability in Iraq: Diagnosis and Solutions 59f41d22e50ba 

Taking the concept of sustainability at the present time is of great importance in most aspects of life and from various international and local development institutions because it has an important role in perpetuating and sustaining all the elements that drive current and future human life. It is unreasonable that current generations enjoy resources with consideration. On the negative effects that future generations will bear.

In addition to environmental and social sustainability, economic sustainability is one of the key indicators of sustainable development, which emphasizes that the actions of society must have long-term objectives to preserve the safety of subsequent generations from the negative effects of excessive economic processes Current effects are reflected on the current and future environment. As a result of the increasing importance of sustainable development at the present time, it is more important that indicators of sustainable development are equally important, including economic sustainability.

Economic sustainability and indicators

Economic sustainability, as revealed by Emirates International Aluminum Company (EGA), is based on its ability to optimize the use of economic resources so that it can contribute to meeting the needs of the society today and in the future by investing in employees, providing jobs, investing in the future, Investment in community programs, training and education, and support for national economic growth.

The United Nations Human Development Report also notes that economic sustainability is based on five indicators: depletion of natural resources, net savings, debt balance, R & D spending, and export concentration index. The report classifies these indicators into three groups: And the lower group. We briefly address the indicators as follows:

- depletion of natural resources, which means the monetary value of access to energy resources, mineral resources and forest resources, calculated in percentage of gross national income.

- Net savings adjusted, which equates to net national savings plus education spending minus energy depletion and forestry, and damage caused by carbon dioxide emissions and particulates. Net national savings are equal to GNP minus fixed capital consumption.

- External debt balance, ie, the proportion of non-resident debt paid in foreign currency, goods or services, of gross national income.

- R & D spending, current and capital expenditure (public and private) on innovative activities aimed at increasing knowledge, including comprehensive knowledge of humanitarian, culture and society issues, basic and applied, and pilot development.

- Export concentration index, which measures the concentration of exported products (also known as the Hernfeld-Hirschmann Index).

Diagnosis of economic sustainability in Iraq

The adoption of indicators of economic sustainability in Iraq will help to determine and diagnose the extent of its dependence on economic sustainability or not, and certainly this diagnosis will contribute to taking appropriate steps that can stimulate the trend towards economic sustainability in the absence or preservation of the case if identified.
- In the light of the first indicator, which is the depletion of natural resources in relation to GNP, 18.5% of the natural resources have been accessed in relation to GNP during the period 2010-2014. This is a large percentage that made Iraq classified according to this indicator in the lowest group.
- At the level of the second indicator is the net saving rate, instead of Iraq to achieve a large volume of net savings adjusted in proportion to its wealth and at the very least equivalent to the depletion volume, which was explained in the first index, it achieves a net savings rate of negative by 2.6% Gross national income during the period 2005-2014, which means that the net national savings less and the expenditure on education less energy depletion and forests larger as well as damage caused by carbon dioxide emissions of particles will be greater, and based on this the index was also included in the lower group as well.

- The third indicator of the external debt balance, where the report did not mention the balance of external debt because the data in this regard was not available to him, but according to other sources, the size of the external debt balance accounted for 34% of GDP at current prices in 2015 .

- The fourth indicator of expenditure on R & D. R & D expenditure represented 0.0% of GDP for the period 2005-2014. This reflected the society's view of the quality of education. Only 45% of the respondents were satisfied with the quality of education. As noted in the report in p. 254.

Iraq is also not included in the Global Innovation Report, which is a key element in sustaining the growth and productivity required to meet growing demand. Innovation is an important element in sustaining the economy (long-term economic growth) through its impact on innovation Four channels are capital deepening ie investment in intangible assets in addition to concrete, increase in labor force and human capital, growth in corporate productivity, and transformation of economic structures [2].

- The last indicator is an important indicator of the extent to which economic sustainability is achieved. It is the concentration of exports. The more concentrated the exports, the more economic diversification is not achieved, but rather the dependence on one item. This means that economic sustainability is not achieved, and vice versa.

The value of the Herfundal-Hirschmann index ranges between zero and one, ie, the closer it is to zero, the less the concentration of exports and vice versa. The closer the value of the index to the index, the greater the concentration and non-diversification of exports. 2014 that Iraq is suffering from export concentration. Especially if we know that this concentration is a commodity such as oil and not industrial or agricultural, which contribute to the real economic growth and reduce unemployment, the rental goods have negative effects on the economy as a whole and also to other areas of life, such as political and social and others.

In light of the above, it is clear that Iraq has not achieved economic sustainability and is in stark contrast to its enormous resources and very few achievements. It consumes its resources in a consumable manner that does not sustain its economy. It produces natural resources to consume it today without paying attention to what will happen. Tomorrow!


The solution lies in several points that can contribute to economic sustainability as follows:

- Diversification of energy sources ie resort to the use of renewable energy as well as fossil energy to reduce the speed of depletion of fossil energy and achieve social justice between current and future generations of fossil energy because it is a national wealth for all.

- Investing in human capital through interest in education and health. This, in combination with the first point, stimulates and reduces carbon emissions from the source on the one hand, and treatment on the other.
- The development of a policy to deal with debt, such as to be placed under control, not to exceed the value of some, by reducing the consumption of consumer spending and increase the efficiency of investment spending with the imposition of taxes in accordance with the circumstances of the individual and country.

- Focusing on the issue of innovation by increasing R & D allocations in all fields. The interest in innovation, as mentioned above, leads to long-term economic growth and is the goal of economic sustainability.

- Work on achieving economic diversification through interest in the various economic sectors such as agriculture, both animal and plant, and industry, both extractive and conversion, especially, and trade in both internal and external, and tourism in all its branches, and others.

- All of the above needs to build an attractive investment climate stimulates and encourages investors to come capital to invest in the country.

* Department of Economic Studies / Al-Furat Center for Development and Strategic Studies / 2004-Ⓒ2017




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