VOL. XLV
No 40
7-October-2002
IRAQ
Oil-Rich Iraq Now One Of The World’s Least Developed Countries
Iraq is endowed with abundant economic
and human resources and owns the second highest proven oil reserves in the
world. But despite this wealth it has witnessed continuous economic deterioration
since 1980 and has become one of the least developed countries in terms of
gross domestic product (GDP) per capita, according to Sabri
Zire al-Saadi, an economic
advisor, ex-United Nations employee and former holder of senior economic and
planning posts in Iraq. In a paper entitled Economic Deterioration, Waste of Oil Wealth
and Widespread Poverty in Iraq to be published in the Iraqi File (October, 2002), a monthly political documentary issued
by the Iraqi Studies Center in London, Dr Saadi says
that the country’s poor position highlights the gravity of policy failure on
Iraq and misuse of public finance by the ruling regime.
Iraq’s plight is illustrated in the
discrepancies between Iraqi Government and independent GDP estimates, Dr Saadi says. For decades, Iraq had systematically published GDP
estimates valued in Iraqi dinars, in both current and
constant prices. After 1980, the government stopped producing these estimates
in order to avoid exposing the high rate of inflation. Instead, a series of GDP
estimates in current US dollars was published in the authoritative annual Arab Unified Economic Report prepared
and edited by the Arab League, Arab Fund for Economic and Social Development,
Arab Monetary Fund, and the Organization of Arab Petroleum Exporting Countries.
Dr Saadi says his statistical
review of these figures, part of his “Economic Project for Change in Iraq”, reveals that the Baghdad authorities have deliberately
concealed the real value of domestic economic activities from the public, with
the aim of covering up the deep economic crisis of the 1980s and 1990s. For
this politically motivated purpose, it used the official arbitrary fixed
foreign exchange rates in converting GDP values of the non-oil sectors from
Iraqi dinars to US dollars.
Based on the real foreign exchange rates of the Iraqi dinar in the free market during the period under consideration,
the government estimates of non-oil contribution were highly overvalued and had
to be corrected, resulting in a significant reduction of both the published GDP
and GDP per capita figures. The extent to which the government’s GDP estimates
have been misleading is illustrated by comparing official and independent GDP
data for Iraq with that of other countries.
According to the government’s estimate for 2000 ($83,544mn), Iraq would have
ranked in third highest position after Saudi Arabia ($173,286mn) and Egypt
($95,801mn) and would have been ahead of the UAE, Libya, Morocco, Kuwait,
Qatar, and the rest of the 18 Arab countries for which statistics are available.
However, the author’s adjusted estimates of Iraq’s 2000 GDP ($6,597mn) put it third
from the bottom and ahead of only Djibouti ($549mn) and Mauritania ($986mn). Iraq’s real GDP was thus
below Saudi Arabia ($173,286mn), Egypt ($95,801mn), UAE ($66,117mn), Algeria
($53,801mn), Libya ($35,600mn), Morocco ($32,903mn), Kuwait ($27,780mn), Oman
($19,773mn), Tunisia ($19,435mn), Syria ($18,770mn) Lebanon ($16,491mn), Qatar
($16,454mn), Yemen ($8,532mn), Jordan ($8,340mn), and Bahrain ($7,971mn).
The independent GDP per capita estimate for 2000, at $289,
placed Iraq below all other Arab countries –
even trailing the fragile economies of Mauritania ($373), Sudan ($413) and Djibouti ($807). It was well behind Yemen ($1,033), Morocco ($1,145), Syria ($1,150), Egypt ($1,513), Jordan ($1,655), Algeria ($1,751), Tunisia ($2,033) Lebanon ($4,380), Libya ($6,312), Saudi Arabia ($7,864), Oman ($8,375), Bahrain ($11,569), Kuwait ($12,469), UAE ($21,273), and Qatar ($29,278).
The main conclusion from the analysis of such data, Dr Saadi says, is that Iraq has witnessed continuous economic
deterioration and its people have experienced severe economic hardship,
especially during the 1990s. The real GDP per capita data not only classifies
the country as one of the least developed countries in the world, but also
shows that the Iraqis are living below the $360 poverty line.
In order to address this problem, Dr Saadi
continues, Iraq must diversify its economic activities
and lessen its very high dependence on the oil sector. “Serious thought should
be given to the moral legitimacy of the politically imposed war reparation and
the economic viability of the current government’s commercial and financial
agreements,” he says, adding that the privileged oil grants and preferential
export arrangements made with foreign countries and companies should also be
re-examined.
GDP Estimates
($Mn)
|
|
Gov GDP Estimate
|
Author’s GDP Estimate
|
Gov GDP Per Capita
|
Author’s GDP Per Capita Estimate
|
|
Year
|
Current Prices
|
Current Prices
|
Estimate Current Prices
|
Current Prices
|
|
1980
|
53,590
|
28,368
|
3,688
|
2,143
|
|
1981
|
37,291
|
13,731
|
2,579
|
1,005
|
|
1988
|
64,443
|
14,783
|
3,142
|
857
|
|
1989
|
67,638
|
16,975
|
3,364
|
970
|
|
1990
|
74,933
|
12,975
|
4,252
|
718
|
|
1991
|
66,130
|
1,803
|
2,998
|
97
|
|
1992
|
66,130
|
407
|
3,973
|
21
|
|
1993
|
75,533
|
247
|
4,078
|
13
|
|
1994
|
76,668
|
458
|
3,910
|
23
|
|
1995
|
77,815
|
445
|
3,822
|
22
|
|
1996
|
78,064
|
949
|
3,748
|
46
|
|
1997
|
78,856
|
2,195
|
3,701
|
103
|
|
1998
|
79,530
|
3,288
|
3,649
|
151
|
|
1999
|
81,916
|
4,851
|
3,674
|
218
|
|
2000
|
83,544
|
6,597
|
3,663
|
289
|
For further statistical information, contact Dr Sabri Zire al-Saadi
on sabri_saadi@hotmail.com
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