Economic development after 2003: Between rentierism and development problems

Abstract

The topic of economic development in developing countries, particularly in rentier states, received significant attention in the last quarter of the past century due to its role in bringing about radical changes in institutional and social structures and expanding the economic base, thereby achieving human welfare and greatly improving the quality of life for society, especially with the concurrent rise in oil prices and the growing oil revenues obtained by oil-exporting countries. In Iraq, economic development has mainly relied on oil revenue, indicating the dependency of the economy on the resulting rent. Development plans during that period were formulated according to the regime's strategy, political theory, and economic philosophy, with established programs aimed at achieving economic and social transformations and planning for economic growth. This had a significant impact on changing the economic and social conditions prevailing in Iraq. However, after the political change in 2003, successive governments were unable to achieve economic development that matched Iraq's material capabilities. What has been achieved could be described as slow and stalled development, as Iraq witnessed no structural changes in its economic frameworks or its economic and social institutions, which still resemble those of low-income fragile states. Oil revenues did not contribute to the development of the most important productive sectors in the economy; rather, they contributed to the underdevelopment of other economic sectors, especially agriculture and industry. This is due to a set of obstacles that hindered their growth, leading to their regression and collapse. There was no clear strategy for economic development in most of its development stages, which negatively affected the Iraqi economy through the decline of many of its essential indicators.