By John Lee.
Iraq’s former planning minister, Mahdi Al-Hafez, has told Asharq Al-Awsat that Iraq must diversify to reduce its decades-long reliance on oil as the main contributor to its GDP.
He told the news agency:
“The desired tasks for economic reform require the reduction of the domination of oil revenue on the economic situation and the adoption of a policy of diversifying the economy and developing other productive sectors such as industry, agriculture, communications and tourism, to make them genuine productive sectors which can contribute effectively to GDP.
“The priority in the forthcoming change in Iraq must start with the economy because our problems start and end with it . . Since the massive political change in 2003, the tasks of economic reform have emerged as the most prominent in economic development, due to the signs of underdevelopment which blighted the national economy before that date.”
The country’s economy is expected to grow 6 percent this year, according to IMF predictions, on the back of rising oil production and exports, but despite its optimism, the IMF also said the country needs to scale down its bloated public sector and restructure a number of state-owned banks in order to give private companies more of an opportunity to compete for government business.
Hafez also sees the private sector as playing a central role in the economy’s future:
“Among the important tasks are to develop the private sector and the middle class in Iraq on the grounds that a market economy relies mainly on making the private sector a leader in the economy ... Some recent statistics indicate that the share of the private sector is around 33 percent of GDP and that the majority of workers in this sector are contractors for government institutes and totally dependent on their resources, and therefore, all opportunities and incentives must be made available to develop the private sector and its institutions.”
(Source: Asharq Al-Awsat)