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Abstract

This study aims to analyze the current state of the Iraqi economy through the lens of competitiveness to establish a general framework for a national strategy aimed at economic revitalization. The study posits that the Iraqi economy suffers from severe performance failures that are circumstantial and incidental rather than inherent, despite their persistence for decades. The prevailing weakness in economic activities is attributed to the absence of a long-term strategic vision capable of elevating these activities to competitive levels based on solid foundations. Furthermore, the study argues that classical free trade theory has become a fallacy, as its fundamental premise perfect competition remains unfulfilled due to various factors, most notably technological barriers and high investment costs. In the context of such imperfect markets, public policies play a pivotal role in determining competitiveness, overcoming market failures, and achieving equilibrium. This process is categorized into three stages: basic requirements, efficiency enhancers, and the innovation and knowledge stage, all within a framework that governs Foreign Direct Investment (FDI) to develop national capacities and align with development strategies. Over the past five decades, the structural framework of the Iraqi economy has faced continuous distortion due to political and military upheavals, the repercussions of ""Dutch Disease,"" and flawed economic policies adopted by successive governments. Through an empirical survey of a sample of business units in Iraq (excluding the Kurdistan Region) regarding twelve pillars of competitiveness, the study reveals a 60% general failure rate in competitiveness. Key deficiencies were identified in addressing corruption, political and security stability, labor force loyalty, and the clarity of tax regulations. The study concludes that current governmental efforts, primarily focused on investment laws and promising agreements, remain modest. Lasting economic reform necessitates restructuring the strategic decision-making process to ensure long-term political and security stability. The proposed competitiveness strategy outlines an Initial Phase (establishing a competitiveness task force and a National Competitiveness Observatory) and a Launch Phase focused on disseminating competitiveness concepts, benchmarking indicators against other nations, enhancing the business sector via technological chain analysis, and formulating sectoral policies to bolster investment attraction.

DOI

10.33095/jeas.v16i58.1484

Subject Area

Economics

First Page

104

Last Page

122

Rights

http://creativecommons.org/licenses/by-nc-nd/4.0

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