This article reveals the condition of the economy in Iraq after the War. The government had adopted economic reforms in Iraq to improve upon several sectors of the economy. The strength of the Iraq economy has been recognized. Also identified are the various hindrances or obstacles in the path leading to Iraq’s economic reform.
The National Development Strategy is one of them. Iraq is well known for its natural resources. Three strengths have been recognized in the economy of Iraq. The first one being its oil reserves, the second one being its large workforce followed by abundant water. By a harmonious combination of the above three, the country is expected to move ahead.
However, there are few speed breakers on the way, which hinder the country’s economic progress. There are various channels through which economic reforms may be effected.
Economic reforms in Iraq can be effected by the removal of state dominance and making the economy more market oriented.
Avoiding any kind of disputes and rehabilitating the economy is the need of the hour.
Iraq’s dependence on the oil sector ought to be removed and the economy should radiate out in various other trades.
It is being increasingly felt that an economic reform in Iraq is urgently required but security lapse is a major problem being encountered by the Iraqis. There are few areas, which need to be reformed or restructured. Export activities and production of oil have not yet attained the status, which it earlier enjoyed prior to the war. Moreover, the non oil segment of the economy has not been able to keep pace as compared to the oil sector of the economy. High rates of unemployment and poverty are two major problems affecting the economy of the country. The social protection rendered to the people of Iraq is also not sufficient. Since the year 2003, Iraq has been subjected to frequent bouts of crime and violence due to which implementing any economic reform in Iraq has not been possible. Studies reveal after comparing the gross domestic product per capita of the countries, which were engaged in a consistent economic reform scheme that these nations perform much better than those countries not opting for consistent and cohesive economic reform. At one point of time, poverty severely affected the people. It was estimated that 8% to 10% of the people were already living in absolute poverty and around 12% to 15% of the people were susceptible to poverty. During the period 2003 to 2004, the country made some headway in matters related to institutional as well as policy reforms. Economic reform in Iraq during the same period comprised reforms pertaining to financial systems, public finances, business climate and trade.
Objectives of economic reform in Iraq during 2003 to 2004:
The main aim of the reforms were:
Increase the efficiency as well as effectiveness of the economy.
Enhance competitiveness in all sectors of the economy.
Eliminate distortions in prices.
Economic reform in Iraq pertaining to the financial system of the country in 2002 included:
A program of stabilization, which was backed by the International Monetary fund or the IMF. During the course of this stabilization program the country put in a requisition for membership to the World Trade Organization. Debt rescheduling was also dealt with.
The National Development Strategy was declared by the government in the year 2004. The strategy works out the prioritized areas of economic reform in Iraq. The reform envisaged that there should be a presence of a strong private sector in the country thereby hinting at privatization. The private sector should also be backed by the public sector, whose modus operandi would be transparent. The economic reform in Iraq should also create job opportunities in the country thereby engaging the workforce. This would to a great extent minimize poverty in Iraq.
In a nut shell, the following three main objectives need to be achieved:
Working up on pension systems in the country thereby protecting the needy.
Incentive systems pertaining to employment opportunities in the private sector need to be looked into.
Bringing about improvement in public management. This could be achieved by adopting anti corrupt means, by bringing about reforms in the public finances as well as managing human resources efficiently.
However, the speed with which the economic reforms in Iraq is implemented would depend on the prevailing conditions of the economy. Reforms should also aim at fiscal savings.
Last Updated on : 26th June 2013