Economic Reform And Poverty In Iraq

Abstract:
The article contains information pertaining to the the various ways in which poverty may be minimized in Iraq. It also highlights the incidence of poverty in different parts of the country. Economic reforms and ways to alleviate the same has been documented in the following article.
The condition of the economy prior to the reforms, the people who may fall prey to poverty and type of people prone to such shocks have also been mentioned. In the year 2006, the economy of Iraq was characterized by rate of employment being low, lack of proper security systems and poverty.

With regard to poverty it has been calculated that 8 percent to 10 percent of the Iraqi population dwelt in poverty in the year 2006. It was apprehended that another 12 percent to 15 percent were susceptible to poverty. In this context, it must be mentioned that non monetary factors as well as monetary factors of poverty were hampered.

Violence dominates the economic scenario so much in Iraq that susceptibility to poverty is not surprising. It has been identified that the following category of people are prone to poverty.
People who are not employed. They constitute 30% of the workforce in the country. The urban people constitute 50% of the workforce.
Ex military personnels who have lost their mobility in a war.
Victims of war who have become disabled.
Refugees and people who had left the country but returned to establish base again.

Since these events have taken place and have adversely affected the people of the country and in turn the economic output, importance of economic reform and poverty in Iraq has been felt by the government in Iraq. The first measure that was taken by the government in Iraq was to ascertain the expenses of the individual households. One notable factor is even though poverty was quite prominent in the country but inequalities were not dominant. The difference in the quintiles of highest as well as lowest income was 3.7 in the year 2003. This ratio went up to 5.3 in the year 2004.

Statistical information about the incidence of poverty in Iraq: It was observed in the year 2005 that higher income levels are generated by three Northern Kurdish regions as compared to Muthanna and Salah Al Din in Iraq. As per records, the difference between rural median income and urban median income was below 10% during the period 2003 to 2004. Such inter regional differences have also been observed pertaining to poverty indicators, which are non monetary like education as well as health.

Economic reform and poverty in Iraq can be referred to as compatible only when economic reforms meant for to alleviate poverty are successful. It was observed that due to socio political conditions and consequently economic conditions prevailing in the country, many reforms adopted by the government did not quite work out to as expected by the government in Iraq.

Economic reforms to alleviate poverty in Iraq:

Public distribution system in Iraq:

Public Distribution System constitutes the primary safety net of the people. Safety net can be referred to as a financial assurance or guarantee rendered by a measure or a policy of the government. It is a kind of security extended to the common people. Subsidies are usually extended to the people through the public distribution system in the country.

Cash transfer:

Another economic reform to alleviate poverty in Iraq comprises the cash transfer, which is done on a monthly basis. This assistance is usually extended to disabled as well as blind people, families having single parent and the elderly people in the household. Cash transfers of a lesser amount is extended to the individual (mainly military personnel) who has lost mobility in a war. Cash transfers are usually carried out by the Ministry of Labor And Social Affairs.

Safety nets in the informal sector:

In the year 2003, it was found that majority of the households depended on only one source of income. There were families with more than one sources of income but these were just a handful. Certain NGOs or Non governmental organizations have worked towards providing job opportunities or assisting individuals in getting involved with more than one occupation so that poverty can be handled to some extent.

Reforming pensions:

Economic reform to ease poverty in Iraq also comprises revamping the pension sector of the economy. As per norms of the government, people working for the public sector and people working for a private firm, which has more than five workers are assured of getting the following benefits.
Pensions
Benefits of maternity leave
Social Insurance
Disability
Medical Insurance
Illness

Availing of pension can be of immense help to the old people after retirement. However Iraq has executed most of the pension plans under emergency circumstances. As such, the pension reforms were not appropriately ascertained. This in turn questioned the financial efficiency, equity as well as financial sustainability of the reforms. Understanding the need to bring about changes, structural reforms pertaining to the pension plans were undertaken by the government in Iraq.

In addition to the economic reforms in Iraq, the political stability should also be taken into account in order to maintain a healthy economy in the country.

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Last Updated on : 26th June 2013

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