Economy News – Baghdad
Mazhar Mohamed Saleh, the Prime Minister for Financial Affairs, announced on Tuesday the Iraqi government’s strategic aim to gradually reduce the unemployment rate to 4%, implementing three key policies designed to support economic development while fostering growth.
In a statement, Saleh highlighted two principal objectives of the government’s economic policy: enhancing GDP growth, specifically non-oil GDP, to a minimum of 5%. This target surpasses the benchmarks set in the National Development Plan for 2024-2028. Additionally, the government aims to systematically lower unemployment, aspiring to reach the target rate of 4% in the near future.
Saleh emphasized that to achieve these goals—diversifying the economy and combating unemployment—focused investment in economic development priorities is essential. He identified the manufacturing sector as a critical element, noting that industries across all levels could absorb approximately 60% of unemployment, thereby fostering diversification of national income sources and promoting accelerated local economic activity.
Three principal policies are being adopted by the government to align with the current economic climate. The first is the implementation of youth loan initiatives, which have already benefited numerous grassroots youth groups, effectively mobilizing the productive workforce. The second initiative involves establishing a ‘leadership bank’—a private financial institution that will receive substantial government backing to facilitate loans for small and medium-sized industrial projects.
Furthermore, the third strategy is the formation of a sovereign guarantees committee dedicated to bolstering major civil industries through bank financing. This financing will be secured from significant nations in Western Europe and Japan, backed by sovereign guarantees from the Iraqi state, thus covering 85% of the associated loan costs for importing advanced industrial production lines.
The government has prioritized development across five key industrial sectors, particularly focusing on infrastructure-related industries encompassing road development, reconstruction, and construction. Additionally, emphasis is placed on pharmaceutical manufacturing, petrochemical industries, and oil derivatives, along with advanced engineering industries that leverage cutting-edge technologies. The program also acknowledges the significance of expanding the investment base within the oil sector, notably in natural gas production, which is undergoing concerted efforts to maximize utility and contribute to the electricity generation industry.
Saleh acknowledged the pivotal role of newly established industrial cities in executing Iraq’s comprehensive industrial development strategy. He reiterated that this industrial renaissance is grounded in a strategic vision centered on a partnership between the state and the private sector, driven by an economic philosophy aimed at cultivating a social market.
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