😊I find the following article VERY interesting is it titled “WHEN DO WE GET OUT OF THE RENTIER ECONOMY?”.
To begin to answer this question you must first ask what a rentier economy is and how Iraq go their in the first place. A “rentier” economy is based solely on one form of revenue. Its dependence on it can make it unstable if the one revenue stream changes drastically. It can become unpredictable.
So, for Iraq they entered this path to the “rentier” economy the day the .U.S. decided to kill it economy with sanctions and then the use of the petro-dollar. The next step was to kill its currency.
This put Iraq in a funny situation as it could only receive U.S. dollars and buy imports with U.S. dollars. Everything evolved around the U.S. If you re-read my definition of a “rentier” economy it clearly states one source of revenue stream.
Today it still the U.S. dollar. Although Iraq is making progress to diversify its holdings of other foreign currencies and is also now allowed to pay for imports with these other currencies.
This is all progress away from the “rentier” economy. But what about sources of revenue for stability’s sake?
In the article Jawad Al-Attar asks – When do we get out of the rentier economy?
I will leave it up to my readers to go read this entire article in the Articles Section. It is short and it does tell us that this won’t happen until Iraq can get off the petro-dollar as their main revenue stream.
As investors in our study of this situation we know that many measures in Iraq have already taken place to shore up the lack of revenues from a sole source of oil.
Just look at what is happening now and shock to their economy when oil dropped from $75 to $60. We learned about the future Customs and Tariffs revenues, tourism, the future Development Road project and all the minerals and agriculture yet to be tapped into. There is more but I can’t think of them now….lol..lol..
However, my point is to show you that until Iraq puts on its Big-Boy pants and takes control of these other sources, they will not get out of the “rentier” economy. They must do it. If we read all these recent articles about their economy, they are doing it and that is what I wanted to emphasis to you. All the article about this situation put more and more pressure on the govt to do something about it and to make the citizens aware of what is causing their lack of salaries and pensions being paid on time.
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