Private sector in Iraq between the promises of plans and the denial of policies

by **claud39** Wed Mar 06, 2019 7:31 pm

https://annabaa.org/arabic/economicarticles/18488

Private sector in Iraq between the promises of plans and the denial of policies

Private sector in Iraq between the promises of plans and the denial of policies 5c5fe9c9c57e9

The unregulated and non-transparent consumption of financial resources derived from the oil sector led to the waste of these funds, without benefiting the economy or the citizen alike. The current decline in world oil prices has become even more complicated as the state is embarrassed by funding to facilitate broad public sector activity. In contrast to the goal of applying the principle of "small state", the limited role of the state in the economy and the reality of a broad public sector and what it requires Of the large funding, which led to the decline of the ability of the state to meet its obligations to individuals, so the situation requires the search options to get out of that crisis, the structural imbalance, in a manner that develops the output and exceeds the imbalance of its structures and enhance their contribution to alleviate the budget deficit and provide Jobs chances.

Also, for decades, the public sector has been in control of all economic functions in the country, regardless of the level of performance that did not achieve productivity commensurate with the large funding that is absorbed in budget allocations and for many reasons political economic and security, The private sector has been and is still less fortunate in influencing the economic process in Iraq. But this does not mean neither of them has the potential to influence economic activity, and because of this, the need here is to work together, in a conditional partnership to meet the development aspirations of the country.

Moreover, because Iraq is in transition from the state intervention in economic activity to the market mechanism, Iraqi governments realized this after 2003 and with the help of state economic institutions such as the IMF and the World Bank. In the face of such a structural imbalance, the role of the private sector is still being sought. These governments adopted national development plans and poverty alleviation and included signs to enhance the role of the private sector, as well as developing several strategies aimed at developing the role of the private sector in GDP and enhancing its contribution to the formation of fixed capital and its ability to create more jobs. But policies often contradict these plans, so there is a mismatch between the fiscal budget strategy of past years and those plans and strategies.

After 2003, a three-year strategy (2007-2010) was drawn up to draw up development plans and investment programs based on four main pillars of development activity:

- Strengthening the foundations of economic growth.

- Revitalizing the private sector.

- Improving the quality of life.

- Strengthening good governance and security in the country.

The strategy focused on making the private sector the engine of employment, balanced economic growth and the expansion of state imports, addressing economic reform programs, privatization and restructuring of state-owned enterprises and banks, encouraging integration of existing investment projects and further implementation of accession procedures to the WTO.

The National Development Plan 2010-2014 also considered the private sector as a partner in the development process and expected 46% of the investments required to achieve the visions and objectives of the plan. The sectors and activities that the private sector (local and foreign) were able to invest in were identified.

The General Secretariat of the Council of Ministers has given this trend great importance through the formation of a committee comprising a number of experts and specialists in order to prepare a draft law for partnership between the public and private sectors and has included in the Federal Budget Law article stipulating the contract between the public and private sectors (2017 and 2018). The Secretary-General of the Council of Ministers, in December 2017 Mahdi Al-Alaq, according to a statement of the Secretariat, the end of the State Council of auditing the draft law of partnership between the public sector and the private sector and referred to the Council of Ministers after the audit of the legal department in the Secretariat.

The government program indicates that the current government plans to start the transition from the rental economy to production during its next session, in line with the strategy of developing the private sector for the years (2030-2014) the second phase (2018-2022), diversification of resources and reducing dependence on oil as a main revenue source . This phase included the goal of the private sector contributing about 45% of the GDP and providing 35% of the work. And the unemployment rate to fall to 6%. And improve the investment climate and enhance the business environment in Iraq to improve the position of Iraq in the World Bank's annual Doing Business report.

In order to achieve this, there must be a clear role and a decree to involve the private sector in the management of the economy and economic and development decision-making. This is achieved through the rebuilding of the institutional and legal structure of the private sector in the legislative, motivational and procedural aspects in a manner consistent with the objectives of the government program The private sector for the years (2014-2030) launched by the government in February 2015, to start these programs immediately, the establishment of mechanisms to involve the private sector in the national economic decision-making, in particular the development of private banking sector and the completion of construction of Tin and sober and restore confidence to deal with him and to attract the monetary mass compacta outside the banking system, which constitute up to 77% of the monetary mass in circulation according to a comprehensive look to stimulate in all production sectors, including mainly in agriculture, and that the government and the representations of the private sector to adopt programs and contributions and operating procedures calculated and supported financially And legally, and that the years (2018-2022), the second phase of the strategy already years of support and activation and development of the private sector. The first phase (2014-2018) of the mentioned strategy, which did not achieve its objectives, should also be utilized.

But with all these implications in the plans and strategies, we note - and according to official statistics - that there has not been an increase in the proportion of the contribution of the agricultural sector in the gross domestic product to Apple decreased. Which remained low and even below the levels in the years before the strategy (2014-2030) entered into force and implementation. (3.98%) in 2015. It decreased to (3.84%) in 2016, and this percentage dropped to (2.78%) in 2017 (at current prices) according to the statistics of the National Accounts Directorate in the Central Bureau of Statistics in the Ministry of Planning.

While it requires the current government to meet the requirements of its second phase (2018-2022), it has failed to do so, especially in the process of overcoming the routine and complex obstacles facing the private sector in various fields. The draft budget law of 2019 did not provide clear texts in this context. But rather a shy, hesitant and unclear text in Article 14, which was submitted by the House of Representatives. Which proves that the country's policy makers are far from the plans and strategies developed in various sectors, including the economic sector.

Therefore, after the adoption of the budget law requires that the government put a procedural plan and to the extent of its powers to address the obstacles that stand in the face of the private sector. And to move towards activating the work of laws related to the development of private sector contribution to GDP and fixed capital formation. As well as the draft law on partnership between the public and private sectors, which was audited by the Council of State and is currently in the Secretariat General of the Council of Ministers.

* Researcher at Al-Furat Center for Development and Strategic Studies (2004-2019)
www.fcdrs.com

Private sector in Iraq between the promises of plans and the denial of policies

Private sector in Iraq between the promises of plans and the denial of policies

* Researcher at Al-Furat Center for Development and Strategic Studies (2004-2019) www.fcdrs.com

* Researcher at Al-Furat Center for Development and Strategic Studies (2004-2019)
www.fcdrs.com