The Effects of Iraq Borrowing from International Financial Institutions

This research examines the effects of Iraq’s borrowing from international financial institutions, such as the International Monetary Fund and the World Bank, on the structure and performance of the Iraqi economy. It highlights how Iraq’s heavy dependence on oil as the primary source of revenue has made the country vulnerable to oil price fluctuations, prompting frequent recourse to external borrowing to cover budget deficits, finance operational and military expenditures, and fund reconstruction projects. The study traces the evolution of Iraq’s public debt from the monarchy period to the post-2003 era and analyzes its impact on savings, investment, economic development, monetary and fiscal policies, the private sector, and inflation. It also discusses the obstacles hindering the use of loans for productive projects, including administrative and financial corruption, security instability, and weak strategic planning. The research concludes that mismanagement of loans increases debt burdens without achieving sustainable development and stresses the need to direct borrowing toward productive projects that diversify the economy and reduce dependence on oil, alongside implementing structural reforms in financial and economic governance.