By Dr Amer K. Hirmis.
Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
Will crashing oil prices mean the collapse of Iraq's economy? No.
Will the Iraqi economy (and people) suffer? Yes, a great deal...
Since the crash in Iraqi oil prices from US$61.0 (per barrel) at the end of January 2020 to US$20.7 by mid-April 2020, a crisis compounded by the spread of COVID-19 virus, political vacuum, failed ethno-sectarian polity, to mention but a few, the country has been grappling with quasi-existentialist questions?
- First, can/should Iraq as a country and an economy continue to be so massively crude oil-export-dependent?
- Second, can/should Iraq continue to have no real control of its economy, given that oil prices/production is overwhelmingly determined by OPEC + and others, operating in the oil global market, rather than sovereign Iraqi decision makers?
- Third, is the current oil prices crisis an existentialist reminder that the economy must be diversified from this point in time onwards in favour of other productive sectors by engaging the private sector in a significant way/scale, which has been undermined for over nearly 60 years now?
- Fourth, given the failed post-2003 (ethno-sectarian) political system, which has severely undermined the 'state of Iraq' in favour of self-serving plutocratic political class, what form of political system should Iraq have instead? What sort of polity would genuinely represent Iraqi people, listen to, and act upon professional independent economic advice, and initiate economic development for current and future generations?
As insinuated above, Iraq, of course, needs to address multiple major, well-recognised, challenges facing it at present: COVID-19 virus; filling the vacuum left by a resigned prime minister and his cabinet; regaining sovereignty as an independent country; reducing unemployment; stopping widespread violence against women, and applying the rule of law against those advocating marginalising women's position in society, economics and politics, alleviating poverty for a third of its population, etc. etc. To this add open interference by other countries in decision-making processes at all levels, undermining sovereignty and the livelihood of millions of Iraqis.
This note, however, focuses, albeit briefly, on the first three questions. Whilst the fourth question is critical in addressing the first three questions, it is outside the scope of this note, and more the province of specialist political scientists and professional politicians.
Dr Amer K. Hirmis is Principal at UK-based consultancy CBS Ltd. (2008-present). In October 2009, Amer began a 20-months assignment as Senior Development Planning Advisor to the Ministry of Planning in Iraq (funded under the DANIDA programme for 'peace and reconstruction' in Iraq). The posts Amer has assumed include Chief Economist and Head of Policy at the London Chamber of Commerce and Industry (1992-5), Economic Advisor to UK South West Regional Development Agency (1996-8) and Associate Director and then Head of Consulting and Research (Middle East) at the global firm DTZ (1998 to 2007).
Dr Amer K Hirmis is the author of 'The Economics of Iraq - ancient past to distant future'