part One
Hamed Abdul Hussein Khudair Jubouri
Al Furat Center for Development and Strategic Studies
The diversification of economic resources and the increasing number of sources of income are increasing in studies, seminars and conferences in monopolistic countries that depend on one supplier, especially in the oil countries, because diversification is of great importance to the characterization and sustainability of the economy. On the one hand, and meet the requirements of the community on the other.
The work on achieving economic diversification lies in the achievement of several economic, social and strategic goals, which seek to achieve them and can be summarized in successive articles, and we will limit this article to the economic goals. There are many economic goals that economic diversification seeks to achieve, but some will be mentioned as follows:
Sustainable economic growth
Economic growth is one of the main objectives that all economies seek to achieve and increase their rates constantly because of the great importance that is reflected in many economic, social, political and other variables, and to have a positive impact on these variables must be real economic growth and not imaginary As is the case in most rental countries, as a result of possessing vast mineral wealth in conjunction with the absence of efficient management and the real will and loss of strategic dimensions that make the image of the future now available to work towards achieving.
The objective of economic diversification in the one-source countries is to strengthen economic growth, where economic growth is known to increase the production of goods and services regardless of its components, but in the monolithic countries, especially oil, economic growth depends on the production and increase of oil, economic growth is unstable and not durable and long lasting , Because it depends on one source is exposed to the risks of fluctuations in prices as a global commodity can not be controlled by its producers, and therefore the diversification of economic diversification of sources of economic growth so as to avoid and compensate for what could lead to the collapse of growth if the Ka The source is alone, and diversification makes growth robust and resistant to collapse.
B. Financial Sustainability [i]
The financing of diversified fiscal requirements by relying on a single financial resource or very limited resources, especially if they are rentable, can not be achieved. Even if this funding is met to meet diverse fiscal requirements, it is only in the short or perhaps medium term, In addition to the negative effects it has on the economy, known as the phenomenon of Dutch disease, which increases the fragility of the economy and low competitiveness in world markets.
The single resource or very limited resources, especially rent, are international strategic resources, which are internationally controlled and can not be controlled by the producing State individually, that is, beyond their control and thus can not be controlled in the way that serves their interests They are unstable for a long time, fluctuating between rise and fall, depending on international, economic and climatic changes.
As a result of the adoption of the financial vernacular on a very large, this is why the public finances are also experiencing the volatility that affects their revenues, especially on which they depend very heavily, and this affects the programs of the Convention or resort to unusual revenues such as loans or new cash issue or aid And international grants, which means that the state does not enjoy financial sustainability. It is unreasonable to rely on them for a long time, so the search by the state on the revenues of the ability to continuity, to finance its activities immediate and future without recourse to debt and other burdens of the state and subsequent generations, through raising the efficiency of public expenditure and diversify the sources of revenue and Support and direct them directly to their beneficiaries [ii].
As financial sustainability can not be achieved under a single-resource or very limited economy, financial sustainability has become one of the objectives of economic diversification.
Improving foreign trade
Economic diversification aims to improve foreign trade in exports and imports. The dependence of the economy on one resource or very limited resources in dealing with the external factor in terms of exports, while relying on the outside world to meet its domestic requirements in a variety of ways, And this leaves them with the imbalance. This leaves many negative effects on the economy as a whole, such as the depletion of limited and unreliable resources reserves, foreign reserves, low competitiveness of national products, increased unemployment, etc.
Therefore, avoiding these effects of the disruption of foreign trade on the economy as a result of dependence on a single source of export and import varied, lies in improving the performance of foreign trade through the elimination of unilateral exports and work to diversify them and reduce imports and work to raise the quality of the import of goods and services that contribute In economic development, in addition to importing goods that do not have comparative advantage.
Since the achievement of diversification of exports and unilateral imports can not be achieved without the existence of economic diversification and the improvement of foreign trade is one of the objectives of economic diversification because it will address many of the problems that take place under the monopolization of the economy.
What to do before economic diversification
Going to achieve economic diversification in a single economy can not be achieved in the absence of the conditions for launching the process of economic diversification, which is often expressed as “investment climate” or “investment environment”, which means providing all that encourages the investor to invest in the economy Infrastructure, roads, bridges, airports, etc., as well as the importance of providing human capital that contributes effectively to economic diversification.
The absence of an investment climate will complicate economic diversification and make it more difficult to implement it on the ground. The investor does not invest in a country that does not provide him with the facilities, privileges and guarantees. If he invests in the absence of an investment climate, Costs and may be bankrupt and forced to refrain from investing in this country and in this case did not lose the investor to the extent that deprives the country of the character of the durability of its economy and the loss of mechanisms of confrontation is trapped in economic dependence.
In addition to the importance of providing an investment climate to achieve economic diversification, we must work on two important things:
First: activating the private sector in the management of the economy, but after entering the country as a participant in the management of the economy so that he can later be able to manage it on its own, while maintaining the supervision of the state to ensure that it does not go out of the public interest of the country, .
Second, attention to the management of national wealth, which is the basis of the unilateral economy, on the basis of ensuring economic justice between generations, being limited to one generation without another and one individual without another is unacceptable to economic logic. Moreover, the absence of economic justice for national wealth Contributes to the occurrence of conflicts, coups and wars, which is unacceptable to social and political logic.
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Sources
[i] means the financial situation in which the State is able to continue its existing tunnel and revenue policies in the long run without reducing its future financial programming for all its facilities, bankruptcy, or non-fulfillment of its future financial obligations. Abdul-Jabbar Al-Nouri, “Financial Sustainability and the Iraqi Economy”, published at: http://www.iraqakhbar.com/iraq-news/652903[2] Heba Abdel Moneim, The Performance of Arab Economies over the Past Two Decades: Stability Profiles and Policies, Arab Monetary Fund, January 2012, p. 8.
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