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

摘要

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 region's 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 Iraq's 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 region's 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 Turkey's 'etatist' regime leaning toward free enterprise and Iran's positive nationalism or private enterprise assisted by the state. From the vantage point of 2003, it's 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.