The Iraqi economy in 2024: Prospects and challenges
The Al-Manbar Center for Studies and Sustainable Development hosted its periodic seminar entitled “The Iraqi Economy in 2024: Prospects and Challenges.” Event organizer Mr Ibrahim Alibadi Distinguished guests included:
– Dr. Mahmoud Dagher, professor at the University of Baghdad and former director general of the Central Bank of Iraq’s Financial Operations and Debt Management division. Currently chairs the board of South Islamic Bank.
– Mr. Aqeel Al-Ansari, who holds an MA in International Trade and Development from the University of London. works at risk management department in a notable bank in UK.
– Mr. Eng. Manar Al-Obaidi, executive director of Iraq Future Company for Economic Studies and Consultations.
The seminar opened with a research presentation by Dr. Dagher titled “Iraqi Foreign Reserves at the U.S. Federal Reserve and the Dollar Exchange Rate Crisis.”
Dr. Mahmoud Dagher commenced his research by stating: “Iraq possesses financial strength yet persists in economic fragility.” He explained that while Iraq’s foreign reserves are presently at their highest point in contemporary history, estimated at over $110 billion, the nation lacks the capability to sustain growth and transition to a productive economy through private sector development.
While Iraq’s reserves are a milestone of financial strength, the nation lacks the ability to sustain growth beyond reliance on oil rents. Though budgets regularly conclude in surplus, these funds have regrettably not been re-invested or transformed into a productive economy and lasting development, with projects limited to necessary services like street paving and basic infrastructure. Such initiatives fail to spur the private sector and ensure the government remains in sole control of the economy.
Fluctuations in the dollar exchange rate and disparities between official and market prices stem from erroneous decisions that altered the dollar’s value, including mismanagement of transfer platforms and transfers to parties subject to external sanctions.
Mr. Aqeel Al-Ansari’s research was entitled “Financing Iraqi Trade in Light of the Central Bank’s New Instructions.”
The issue stems from Iraq’s banking sector lagging behind its developed global counterparts in both knowledge and technology. Cognitive deficiencies arise from decades preoccupied with war, unable to keep pace. Technological shortcomings relate to lack of need due to Iraq’s rentier economic structure with limited trade relations.
Problems financing Iraqi trade truly emerged post-2003 as Iraq previously lacked such financing, with sole government control over imports and exports. Sudden, rapid liberalization combined with inexperience led to imbalanced trade financing methods and struggles with regulating exploitation of loopholes in the window system for non-official trade purposes.
In Mr. Manar Al-Obaidi’s research entitled “Growth and Investment Indicators and the Risks of Oil Price Fluctuations,” he noted the problem lies not solely in economic realities but in Iraq’s state management. This is compounded by a lack of future vision, with most decisions reactive rather than strategically proactive in nation-building.
Absent foreign investment introducing hard currency led to dollar dependence on government-offered rates fulfilling salary and resource obligations rather than market need. Reliance on oil revenues for dollars also depends on institutions beyond Iraq’s control like OPEC and OPEC Plus, forcing adherence when prices fluctuate.
Despite pledges since 2011 to maximize non-oil income, indicators show such revenues declining due to deficient strategies and management plans.
The seminar concluded with participant questions and discussion relevant within research and debate parameters to derive desired results and solutions.
For a complete recording of the webinar, visit: