Imported Goods Crowd Out Local Production

By Wassim Bassem for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Qasim al-Rubaie, a teacher from Babil province, told Al-Monitor in front of a grocery store, “You will not find any Iraqi grown vegetables and fruits. Instead you’ll find imported goods from Jordan, Turkey, Iran and the Gulf countries.”

In fact, Iraqi agricultural products are not found in many local grocery stores, as if Iraq is no longer producing food products. The same applies to locally manufactured products, such as tissues, luxury items and drinks, which cannot be found in the markets. Yet, markets are overflowing with all sorts of imported goods.

This phenomenon is not new, according to Alaa Najm, a merchant. He told Al-Monitor, “The presence of domestic goods in the markets began to decline in the late 1980s. The reason for that was the former regime’s military expenditures. Then agricultural and industrial production decreased, and the government’s support for these sectors vanished, factories became obsolete and agricultural land reclamation projects no longer exist.”

Najm began traveling to China in 2003, along with hundreds of Iraqi retail and wholesale traders, to import goods at a cheap price. Because of the traders’ import activities, foreign products have become abundant on the Iraqi market, in the absence of mechanisms to protect local production, obsolete production techniques and an unimplemented customs tariff law on imported goods.

In an interview with Al-Monitor, Maytham Elaibi, an economist and academic researcher at the University of Baghdad, said that the major collapse in the domestic production of goods is attributed to “the economic policies that have failed to support factories and farm owners in making their products profitable.”

Elaibi said, “The low salaries have prompted workers to move from the private to the public sector, which increased disguised unemployment, which is unproductive.”

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