Publication: Iraq Economic Monitor, Spring 2016: Laboring through the Crisis
Loading...
Published
2016-06
ISSN
Date
2016-10-17
Author(s)
Editor(s)
Abstract
Iraq is facing daunting challenges of Islamic State of Iraq and Syria (ISIS) insurgency, political upheaval, and profound economic and humanitarian crises. Compounding the ISIS-related crisis, the sharp decline in global oil prices has resulted in significant decline in oil export revenues. Implementation of political reforms, announced in August 2015, has been slow due to constitutional constraints and systemic resistance to changes. Iraq’s economic prospects are subject to significant risks. Iraq has recently achieved some important steps towards strengthening its investment climate, but much remains to be done. An attractive investment climate is integral to economic growth and poverty reduction. A key task of the government is to balance the interests of society and individual firms. A stronger investment climate does not equate with a more comfortable life for individual firms. The government must manage these trade-offs: global analysis of the World Bank’s investment climate surveys shows that firms facing strong competition are on average fifty percent more likely to innovate than firms reporting no such pressure. Innovation, in turn, is a key ingredient for productivity improvement. The special focus section explores the different aspects of the investment climate in order to better understand their importance. With this background, the authors then look at Iraq’s investment climate and recent efforts to strengthen it. Finally, the authors look at priorities for improving Iraq’s investment climate going forward.
Link to Data Set
Citation
“World Bank. 2016. Iraq Economic Monitor, Spring 2016: Laboring through the Crisis. © World Bank. http://hdl.handle.net/10986/25176 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Iraq Economic Monitor, Spring 2022(Washington, DC: World Bank, 2022-06-01)Iraq’s economy is gradually emerging from the deep recession caused by the pandemic and the plunge in oil prices in 2020. Higher oil revenues pushed Iraq’s overall fiscal and external balances into a surplus in 2021. The turnaround in oil markets has significantly improved Iraq’s economic outlook in the medium term. Iraq’s fiscal and socio-economic fragilities underscore the urgency of wide-ranging structural reforms by the new government. Iraq’s existing food security challenges have intensified with the recent surge in global commodity prices. To plug the food supply gap, Iraq has become increasing reliant on imports for more than half of its food consumption, which has increased the country’s exposure to global food price and supply shocks. Subsidies and direct transfers, including recently new measures announced by Government of Iraq (GoI), partly mitigate the impact of rising global prices in the short term. However, achieving food security calls for coordinated efforts to improve domestic production including through raising the efficiency of irrigation water, reducing and rehabilitating soil degradation, improving land management, and implementing climate change adaptation and mitigation measures including the adoption of climate-smart agriculture.Publication Lebanon Economic Monitor, Spring 2021(World Bank, Washington, DC, 2021-05-31)The Lebanon financial and economic crisis is likely to rank in the top 10, possibly top three, most severe crises episodes globally since the mid-nineteenth century. This is a conclusion of the Spring 2021 Lebanon economic monitor (LEM) in which the Lebanon crisis is contrasted with the most severe global crises episodes as observed by Reinhart and Rogoff over the 1857-2013 period. The Lebanon economic monitor provides an update on key economic developments and policies over the past six months. Monetary and financial turmoil are driving crisis conditions, more palpably through interactions between the exchange rate, narrow money, and inflation. Real gross domestic product (GDP) growth is estimated to have contracted by 20.3 percent in 2020, on the back of a 6.7 percent contraction in 2019. The deliberate depression has further undermined already weak public services via two effects: (i) it has significantly increased poverty rates expanding the demography that is not able to afford private substitutable (the way citizens had previously adapted to abysmal quality of public services), and are thus more dependent on public services; and (ii) threatens financial viability and basic operability of the sector by raising its costs and lowering its revenues. Lebanon urgently needs to adopt and implement a credible, comprehensive, and coordinated macro-financial stability strategy, within a medium-term macro-fiscal framework. This strategy will be based on: (i) a debt restructuring program that will achieve short-term fiscal space and medium-term debt sustainability; (ii) comprehensively restructuring the financial sector in order to regain solvency of the banking sector; (iii) adopting a new monetary policy framework that will regain confidence and stability in the exchange rate; (iv) a phased fiscal adjustment aimed at regaining confidence in fiscal policy; (v) growth enhancing reforms; and (vi) enhanced social protection.Publication Lebanon Economic Monitor, Spring 2025(Washington, DC: World Bank, 2025-06-20)Lebanon’s economic outlook for 2025 is shaped by a fragile stabilization in the political and security environment. This follows the end of the conflict and the resolution of a two year political paralysis with the election of a president and the formation of a reform-oriented government. While this renewed momentum presents an opportunity to begin addressing Lebanon’s overlapping financial, economic, and institutional crises, the outlook remains highly contingent on sustained improvements in the security situation and tangible progress on key reforms. The real GDP contraction for 2024 has been revised downward to 7.1 percent, bringing the cumulative decline since 2019 to nearly 40 percent. The conflict and its aftermath have exacerbated poverty and vulnerability in Lebanon. Agriculture, commerce, and tourism, sectors accounting for 77 percent of economic losses, are key income sources for low-wage and informal workers now at risk. Reconstruction efforts remain slow, constrained by Lebanon’s ongoing financial crisis and a lack of external financing, which is unlikely to materialize without comprehensive reforms. Drawing on two decades of policy dialogue, technical assistance, and World Bank-financed projects, the Special Focus offers a contribution to the government’s reform agenda by outlining a targeted one-year policy action plan. The ministerial statement sets out four high-level overarching priorities: (i) halting financial and economic deterioration and identifying growth enablers; (ii) strengthening social security; (iii) combating waste and corruption; and (iv) preparing a fair parliamentary elections law (the latter falls outside the scope of the Special Focus). To support government reform, the Special Focus offers a comprehensive one-year policy action plan that brings together and distills key lessons from years of World Bank engagement and policy dialogue in Lebanon into a set of feasible, high-impact actions that align with the government’s stated objectives and can be implemented within its limited tenure. Proposed policy actions prioritized restoring macro-financial stability, rebuilding citizens’ trust, and laying the foundation for a new, successful economic development model.Publication Iraq Economic Monitor, Spring 2020(World Bank, Washington, DC, 2020-05-04)Iraq, once again, is facing a combination of acute shocks which the country is ill-prepared tomanage. The collapse in oil prices has considerably reduced budgetary revenues and reversed the fiscal surpluses accumulated since 2018. COVID-19, and the lockdown measures needed to contain the pandemic have dealt a severe blow to economic activities especially the services sectors like transport, trade, banking and religious tourism, which constitute around half of the non-oil economy. The growing discontent over poor service delivery, rising corruption, and lack of jobs persists and is coupled with political impasse over the formation of a new government. Iraq's pre-existing conditions going into this crisis limit its ability to manage and mitigate the socio-economic impact. A large dependency on oil revenues coupled with built-up budget rigiditieslimit Iraq's fiscal space to respond to the COVID-19 outbreak and offer a stimulus package to re-start the economy. An undiversified economy, highly dependent on oil outcomes, as well as large presence of the state in economic and commercial activities, make it hard to create the needed private sector jobs for a predominantly young population. Furthermore, rampant corruption and weak governance and service delivery fueled large scale protests across the country calling for better public service delivery and jobs. As a result, all signs indicate that this multifaceted crisis will have a protracted impact. The outlook for Iraq, which was already negative prior to the COVID-19 shock, has markedly worsened since. Near-term economic growth will be subdued by low oil prices, a new OPEC agreement that has reduced oil production quotas, and unfavorable global and domestic conditions including disruptions from COVID-19 spread. As a result, the economy is projected to contract by 9.7 percent in 2020, down from a real GDP growth of 4.4 percent in 2019, with both oil and non-oil sectors contracting by 13 and 4.4 percent respectively. This special focus on digital economy (DE) highlights the importance of digital transformation for Iraq and the urgency behind it. Iraq's economic condition was gradually improving following the deep economic strains of the last three years. However, the recent protests and unrest highlight the continued fragility of the country and the high priority of improving economic opportunities, particularly for youth. Leveraging the DE will help Iraq address some of its citizens' concerns as well as accelerate the achievement of its development objectives.Publication Iraq Economic Monitor, Spring 2021(World Bank, Washington, DC, 2021-05)Recognizing the severity of the crisis, the GoI devised a national reform plan (the white paper) that sets out a old blueprint of structural reforms to achieve sustainable medium-term growth through economic diversification and boosting private sector growth and private sector job creation. The GoI has also devised an implementation and governance framework for the white paper in which it proposed a detailed reform matrix and launched a High Reform Council headed by the Prime Minister to accompany the implementation. Actions have already been realized starting with the reforms adopted in the 2021 budget law and other areas including in the business environment and the financial sector. The ultimate success of the reforms though depends on the political will and public support to implement the proposed measures and lead the country out of a long-standing fragility trap. Iraq's economic outlook hinges on global oil markets prospects, the implementation of the white paper reforms, and on the evolution of COVID-19 (coronavirus). The economy is forecast to gradually recover on the back of rising oil prices and rising OPEC+ production quotas. GDP is projected to grow by 1.9 percent in 2021 and 6.3 percent on average over the subsequent two years (Table 1). Non-oil GDP is forecast to recover in 2021, growing by 5.5 percent before converging to historically low potential growth trend in 2022–23. The currency devaluation is estimated to push inflation to 8.5 percent in 2021 due to limited capacity for import substitution. This will present an additional pressure on Iraqi households' wellbeing. The fiscal stance remains expansionary with only limited reform measures being included in the 2021 budget law after an extended deliberation in the Parliament. Higher oil revenues in tandem with the devaluation effect on those receipts are projected to narrow the fiscal deficit to 5.4 percent of GDP in 2021. Financing needs are forecast to remain elevated compared to pre-COVID-19 levels, averaging at 13.7 billion Dollars per year (7.5 percent of GDP) in the outlook period (2021–2023). The 2021 approved budget includes limited reforms such as new consumption taxes and better targeting of PDS transfers which are in line with the GoI white paper. If implemented they could help moderate the fiscal deficit and exchange rate pressures. However, more structural issues such as public wages and pension rigidities remain unaddressed.
Users also downloaded
Showing related downloaded files
Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.