Economy Updates – Baghdad
Mazhar Mohamed Saleh, the Financial Adviser to the Prime Minister, has confirmed the government’s proactive measures aimed at revitalizing Iraq’s manufacturing sector.
In his recent statement, Saleh emphasized that advancing the manufacturing industry in Iraq is a multifaceted strategic imperative. He outlined that the industrial landscape, encompassing enterprises of all sizes—small, medium, and large—plays a crucial role in absorbing approximately 60% of the workforce. This highlights the importance of the manufacturing sector as a cornerstone of economic vitality.
Saleh further articulated that addressing sustainable unemployment necessitates economic diversification, which should originate from strengthening Iraq’s manufacturing base. He noted that forming partnerships with the private sector is vital for enhancing industrial activities. This partnership can take various forms, including financial support, ownership arrangements, and joint ventures. Achieving a balance between public interests and private gains is essential, alongside fostering a transparent regulatory environment that promotes effective collaboration in a structured social market.
The advisor noted that collaboration in management and ownership between governmental and private entities fosters innovation, stimulates technological advancements, and encourages research and development initiatives. Additionally, there is a strong impetus for investing in cutting-edge manufacturing technologies such as automation, artificial intelligence, and 3D printing.
Saleh underscored the importance of financial partnerships, particularly for small and medium enterprises (SMEs) in the manufacturing realm, as they constitute an essential lever for operational success. He elucidated that the national development plan is committed to rebuilding the foundations of the processing industry via genuine partnerships with the private sector. The state is poised to cover 85% of the funding for manufacturing initiatives, with the remaining 15% contributed by private industrial projects.
He continued by detailing a five-tier financing strategy focused on industrial projects, prioritizing those aligned with reconstruction, housing, and developmental needs, followed by sectors such as pharmaceuticals and petrochemicals. Saleh explained that the government’s economic approach emphasizes cooperation between the state and market mechanisms backed by extensive social security frameworks. This aligns with the principles of social market theory and serves to mitigate the risks associated with outright economic liberalism.
To support this vision, a leadership bank has been established with state backing to offer small and medium loans specifically to youth entrepreneurs. This initiative follows the Prime Minister’s leadership initiative, which has already provided numerous loans to youth sectors to spur innovation. Such efforts are anticipated to improve the regulatory and investment climate in the country, encouraging competitive practices while streamlining bureaucratic processes that may hinder manufacturing development.
