National Economy
Transitioning the Iraqi economy from a rentier model to a value-creation model, through re-engineering the relationship between the state and the market, building a diversified productive base, and shielding the budget from oil price volatility.
Introduction
The Iraqi economy rests on a fragile equation: oil finances salaries, and salaries feed imports. This file presents a roadmap for a gradual transition toward a productive economy, while maintaining financial and social stability throughout the transformation phase.
Key Challenges
- Budget dependency on oil revenues exceeding 90%.
- Bloated public sector relative to a stunted private productive sector.
- Weakness of the banking sector and its limited role in financing the economy.
- Absence of a stable investment environment and inadequate protection of property rights.
- A broad cash-based economy that impedes financial inclusion and digital transformation.
Vision
A diversified Iraqi economy built on four pillars: a manufacturing industry connected to energy sources, modern agriculture along water corridors, advanced services, and a trusted financial sector that finances production — all within a framework that protects vulnerable groups and rewards initiative.
Action Axes
Sustainable Fiscal Policy
Establishing a sovereign wealth fund for future generations, to which surplus oil revenues above a legally defined reference price are transferred, and restructuring public expenditure by separating operational from capital spending.
Banking Sector Reform
Strengthening central bank independence, unifying the exchange rate, raising the efficiency of financial intermediation, and expanding financial inclusion through digital transformation and financial technology.
Investment Environment
A unified investment law that eliminates the duplication of licensing authorities, shortens approval cycles, and protects intellectual and contractual property rights.
Subsidy Restructuring
Transitioning from commodity subsidies to conditional cash transfers for the most vulnerable households, while expanding the social protection network based on accurate data.