Challenges of the collapse of the national economy and the recovery strategy

by **claud39** Sun Jan 31, 2021 9:02 am

Challenges of the collapse of the national economy and the recovery strategy

01/31/2021

Challenges of the collapse of the national economy and the recovery strategy 25917

* Samir Al-Nasiri

For seventeen years, the Iraqi economy has been suffering from cumulative and complex challenges and repercussions due to systematic, political and security reasons.

This is because our economy relies on oil revenues as a basic resource for the general budget and constitutes around 93% of total revenues, and constitutes 57.68% of GDP at fixed prices and the failure of the government agencies concerned to stimulate And activating the productive economic sectors, which official data indicate that the percentage of the agricultural and industrial sector’s contribution to the GDP is 4.77% and 1.67%, respectively, which are very weak ratios, and the 2021 budget was born in difficult and complex circumstances, including a 10% decrease in the gross domestic product and the debt is more Of 60% of GDP, according to the World Bank report, with a deficit of 16% and an increase in poverty rate of more than 30% and exceeding 40% in some southern governorates such as Nasiriyah, Maysan and Muthanna, with an addition of up to 10 million new poor people in the current economic and epidemiological conditions.

The unemployment rate increased at an average rate of more than 31% of those who were able to work with a clear deficit in the balance of payments, which led to a state of depression and economic contraction.

This confirms that the Iraqi economy, according to these official ratios, is still a rentier economy by relying on crude oil activity as a primary source of income, and that oil imports represent a major source of financing the budget. In addition, the effects of political tensions, security crises, war on terror, the Corona pandemic, deficiencies in the country's health system, underdevelopment of education, and failure to give the private sector the space required to participate in economic decision-making are all major challenges and obstacles for the transition of the national economy from collapse to the stage of reform and recovery.

The strategy for the advancement and reform of the Iraqi economy after all these years has passed requires exceptional efforts, programs, mechanisms and government procedures in partnership with the private sector and the competent national competencies, and most importantly, the sincere and real intentions for change towards the desired economic advancement with an emphasis on supporting the banking sector as the first basic link in the economy.

What supports this is to allow the national expertise of specialization and the national executive economic experience to contribute and participate in drawing and implementing the strategy of economic transformation and reform during the next ten years with a focus on finding solutions and speedy remedies to enable the elements of implementing the economic advancement and that these treatments have a rapid effect to create relative stability in the financial system The monetary system and re-control over the distribution of public money, get rid of mismanagement and choose the right man in the right place, and thus will facilitate the way to implement the strategy of advancement as a central goal in accordance with the vision of Iraq 2030.

* An economic and banking advisor

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