HEADLINES:

Iraq requires structural reform to overcome economic risks—World Bank

PM:01:25:22/06/2022

2416 View

+ -

SULAIMANI— The World Bank has warned Iraq of the economic impacts of climate change and has called for "structural" reforms to overcome economic challenges.

The representative of the World Bank in Iraq, Ramzi al-Naaman, said in a TV interview with al-Hurra on Tuesday (June 22) that Iraq must hasten the formation of its government that "adopts the path of reform" quickly.

Al-Naaman was commenting on a recent report by the World Bank published on June 16, which says while Iraq is coming out of a deep recession and its economy is expected to grow between 2022 and 2024, "the country's macroeconomic outlook is subject to a significant degree of risk due to high dependence on oil, budget rigidities, and delays in the formation of a new government."

The report highlighted the risks of oil dependency, which "also hurt the domestic drive for reforms, thereby deepening structural economic challenges."

The bank said Iraq needs to "undertake urgent, wide-ranging structural reforms by drawing on fiscal space resulting from its recent oil windfall."

"Reorienting government expenditure toward programs that improve growth is critical for economic diversification and job creation, and for addressing the country's human capital crisis."

Food security

The World Bank has said that Iraq's existing food security challenges have intensified due to the surge in global commodity prices as the country's domestic food production can not meet the demands of the rising population.

Iraq has faced a food shortage, and the Iraqi Parliament has debated a bill on food security and development to maintain a food-rationing program amid the increasing food price worldwide.

The bank added that climate change factors such as severe droughts had worsened the situation.

In addition, delays in government formation and barriers in private sector development have further exacerbated the risks.

Iraq's Parliament has failed to form a new government after the 2021 October election due to the political dispute between the political blocs.

"Further delays in government formation and in the ratification of the 2022 budget could restrict the use of the country's revenue windfall from oil as de-facto limits from the 2021 budget are reached, and new investment projects are put on hold, which could reduce economic growth."

(NRT Digital Media)