Shafaq News
Slowing growth,rising unemployment, and shrinking investment have pushed Iraq's economicdebate past the familiar quarrel over budgets and oil prices toward a morebasic question: Is the country held back by the absence of modern economic legislation,or by the way its economy is run? Officials, lawmakers, and economists gaveShafaq News sharply different answers.
The questioncarries weight because Iraq remains a rentier economy, drawing most governmentrevenue from oil exports (about 90%), while non-oil production— agriculture,manufacturing, and industry— stays weak, according to the World Bank.
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For MudhhirMuhammad Salih, economic adviser to Iraq's prime minister, the fix begins withthe legal framework rather than fiscal or monetary adjustment; reform, in hisframing, "does not begin with numbers, but with law." He wants theinvestment regime rebuilt around simpler procedures, less bureaucracy, and firmlegal guarantees for local and foreign investors, and treats a public-privatepartnership law as the central piece, a framework letting the state share longprojects, often running 30 to 35 years, with private capital to relieve thebudget.
Because suchcontracts blend public and private law and must divide risk and returnprecisely, they need a dedicated economic judiciary to settle disputes andtighter oversight to block corruption, in his view, or “they turn into a sourceof conflict rather than a tool for development.”
Kadhimal-Shammari, a member of the Parliamentary Committee on Economy, Industry andTrade, wants the state to retreat and private business to lead, arguing that“years of bureaucratic interference drained the private sector's productivity.”His remedy is laws that shield private firms from public-sector encroachment,with an industrial investment law and a partnership law at the top of the list;the public sector itself he dismissed as "backward and cannot be reliedupon to lead development."
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Ahmedal-Janabi, an economic researcher, casts the crisis as “a deep structural problem,”not a matter of liquidity or budgeting, pointing out that an economy"built on oil rent and weak real production" needs the state-marketrelationship redrawn outright. His prescription bundles a modernized investmentlaw, a working partnership framework, tax reform, food-security legislation,and faster digitization with a sovereign wealth fund for future generations,financed by oil revenue to channel part of that wealth into long-terminvestment, though none of it, he cautioned, “works without real political willand an executive that applies laws in practice rather than on paper.”
Mahmoud Dagher,a financial and economic expert, traced Iraq's troubles to "the largestcollapse in public revenues since 2004," which has slowed growth, drainedreserves, and deepened domestic debt, and located the deeper fault in howpublic money is spent rather than in any missing statute. Iraq, by his account,needs to reorganize spending, diversify revenue away from oil, tightencollection of electricity, water, tax, and customs receipts, and cutoperational waste; laws alone will not fix a crisis rooted in resourcemismanagement, and the present course may not hold to year's end.
Those domesticarguments track warnings from the World Bank and IMF. The Bank recorded IraqiGDP falling 2.4 percent in the first nine months of 2025, driven by a 5.7percent contraction in oil output under OPEC+ limits, while non-oil growthslowed to 1.5 percent amid water and electricity shortages and a liquiditycrunch from falling oil revenues.
The IMF's April2026 outlook projects a steeper contraction of 6.8 percent for the year. Thefactors both flag mirror the experts' own: Near-total reliance on oil, weaknon-oil sectors, heavy operating spending, and regional tension, and anyrecovery, by these assessments, will depend on the government deliveringlegislation, management, and investment reforms together rather than any onealone.
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