INTERNATIONAL CENTER: IRAQ HAS AN OPPORTUNITY TO ACCELERATE ECONOMIC DIVERSIFICATION EFFORTS
The International Trade Centre (ITC) believes the current phase presents an opportunity to accelerate Iraq’s economic diversification efforts. Eric Bouchot, the ITC’s program director in Iraq, told Al-Sabah newspaper that the closure of the Strait of Hormuz, along with regional developments, this has led to a sharp reduction in oil exports, the sector on which Iraq relies for most of its export revenues, and has also caused significant disruption to imports, including food and basic commodities.
He added that these developments have significant implications for trade and the private sector. On the one hand, the disruption of oil exports leads to a decrease in revenues, increased pressure on liquidity and public finances, and an impact on payments to suppliers. On the other hand, increased import costs and delays in the arrival of goods are likely to restrict companies’ ability to obtain inputs, maintain production, and meet market demand, with small and medium enterprises being particularly exposed to these challenges.
He explained that this crisis highlights the structural weaknesses in the Iraqi economic model, as the heavy reliance on oil exports and the limited trade routes and markets reduce the ability to withstand external shocks.
Bushout noted that at the same time this stage represents an opportunity to accelerate economic diversification efforts by expanding non-oil exports, enhancing local production, and building a more competitive private sector. He considered the development of trade and exports a key element in this transformation, along with financial reforms. He added that strengthening integration into international trade frameworks can support Iraq in building a more flexible, transparent, and rules-based trading environment.
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