Financial advisor: The government has developed plans aimed at increasing non-oil revenues to 45%
The financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed on Friday that the government’s economic direction focuses on transitioning from a rentier economy that relies on the distribution of oil revenues to a productive economy, by strengthening the role of the private sector, diversifying revenue sources, and financing infrastructure projects. Salih told the official news agency that “Prime Minister Ali Falih al-Zaidi’s economic vision stems from identifying two fundamental issues: first, the weak role of the private sector in productive activity, and second, the weakness of non-oil revenues in the budget due to the nature of the rentier economy.” He explained that “the goal is to move from a distributed and consumer economy to a productive and consumer economy, because sustainable consumption requires production.” EconomicReform analysis
He added that “the vision is based on dealing with oil as a productive asset and not a resource that goes to consumption, by seeking to add about two million barrels per day to Iraq’s production from its natural oil quota,” noting that “the proceeds of this additional production will be directed to a fund called the Energy and Development Fund.”
He also explained that “the Energy and Development Fund will allocate its proceeds in two main directions: first, developing strategic infrastructure, and second, supporting economic development,” noting that “Iraq needs infrastructure in the education, health, housing, energy and water sectors, in line with the expected growth in population and young workforce.”
He also pointed out that “the young workforce in Iraq will constitute a large percentage of the population in the coming years, and may reach about 60 percent by 2037, which represents a demographic gift that can turn into a large productive force if it is trained and provided with the requirements for living and working.”
Saleh stressed that “electricity is a fundamental pillar of the infrastructure, and no economic revival can be achieved without stable electrical power,” while also emphasizing the importance of “organizing and managing water resources for irrigation, drinking, and various developmental uses.”
He also noted that “investment will begin with the energy sector as a source of cash flows, while working to increase Iraq’s share of oil production,” explaining that “the government seeks to make OPEC understand Iraq’s need to restore its natural role in the oil market, after its share was affected during the past decades by geopolitical conflicts and instability.”
He explained that “the private sector has an important role in the Energy and Development Fund, as it is a sovereign fund directed towards domestic production and construction,” noting the possibility of “using part of the fund’s money as guarantees for the private sector to enable it to borrow from local and international financial markets and contribute to the advancement of the economy.”
He also added that “the Prime Minister chairs a number of councils and bodies concerned with market development, investment and combating corruption, which will contribute to drawing a roadmap for the role of the private sector in development and improving the business environment.”
Saleh emphasized that “the goal is to increase the private sector’s contribution to economic activity and raise non-oil revenues from 10% to 45% by 2037, which represents an important demographic turning point for Iraq, with the increasing proportion of the working-age population.”
He stressed that “the next stage requires investing in the demographic dividend and transforming it into a productive force by providing infrastructure, education, health and job opportunities, in order to ensure the building of a more diversified, sustainable and less oil-dependent economy.”
Burathanews.com