Accession Number:

ADA525789

Title:

The Neoliberal Model's Planned Role in Iraq's Economic Transition

Descriptive Note:

Corporate Author:

NAVAL POSTGRADUATE SCHOOL MONTEREY CA CENTER FOR CONTEMPORARY CONFLICT

Personal Author(s):

Report Date:

2003-08-01

Pagination or Media Count:

12.0

Abstract:

Iraq has been blessed with abundant economic and human resources. It has the second highest proven oil reserves in the world at around 112 billion barrels, after Saudi Arabia with 262 billion barrels. However, despite its wealth, Iraq has experienced continuous economic deterioration since 1980 and has become one of the regions least developed economies. A country that could have been a model of development for the Arab world turned out to be a devastated case of economic decline, mismanagement and massive corruption Azzam, 2003. In addition to the obvious factors such as three major wars and a decade of crippling sanctions, what factors accounted for Iraqs economic disaster In a seminal paper on Middle Eastern economies, Jahangir Amuzegar 1974 examined what he termed the growth-through-ideology thesis in an attempt to determine if one economic system produced consistently better or worse economic performance in the Middle East context. Acknowledging variations by country, Amuzegar classified the regions countries into three major economic systems Arab Socialism, comprised by Egypt, Syria and Iraq capitalist Lebanon and Saudi Arabia and an in-between group including Turkeys etatist regime leaning toward free enterprise and Irans positive nationalism or private enterprise assisted by the state. From the vantage point of 2003, its clear that the Arab Socialist model was a major failure not just in Iraq, but also in Egypt and Syria. State companies tended to be less efficient than their private sector counterparts. Lacking market motivation, state companies were less productive and innovative and therefore registered low returns or losses. They were often launched in sectors in which the country had no comparative advantage and thus required subsidies explicit or implicit. Fiscal deficits resulting from losses or subsidies led to underinvestment any investment that did take place was often misallocated and driven largely by non-economic criteria B

Subject Categories:

  • Economics and Cost Analysis

Distribution Statement:

APPROVED FOR PUBLIC RELEASE