Iraq's economic reforms in perspective: public sector, private sector and the sanctions

Abstract

This paper considers the positions of the public and private sectors in key economic activities in Iraq during the quarter of a century running up to the 2003 invasion and occupation of the country. It questions the common assumptions upon which economic policies are being advocated, that of a public sector dominated economy in need of radical liberalising measures and privatisation. The paper outlines cumulative measures applied in a number of different sectors and economic activities over many years, subsequently followed by macro level institutional and policy changes that have opened wider avenues for the private sector activity. The paper also considers ambivalence of international sanctions in their different phases and in their consequences for private and public sector activity. It concludes that much of the current economic policy discourse is based on ignorance or is politically motivated. Generally speaking, economic performance had been undermined by political factors, inappropriate policies and structural weaknesses of the private sector, rather than by excessive state intervention and public sector predominance.