n Journal of Emerging Trends in Economics and Management Sciences - Sharing the agriculture and industrial sectors in the economic growth of Iraq : an Ordinary Least Squares (OLS) application

Volume 6, Issue 5
  • ISSN : 2141-7024
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Iraq has great resource potential that may not be available in other countries. It has a great potential of various resources that date back to thousands of years. Iraq is one of the areas that have diversity in terms of natural resources and industrial components. Due to these resources, in 1970, Iraq was among the best countries in producing and exporting wheat and barley as well as in providing industrial goods. This helped increasing the gross domestic product (GDP). Since 1980, Iraq passed three wars and economic blockade which had an extensive negative impact on economic development. Moreover, Iraq is one of the most important oil-exporting countries in the world and while its oil revenues dominate the overall countries' economic activities of the country, there has been directly and indirectly less attention given to the development of other sectors such agriculture and industrial. As a result, the contribution of agriculture and industrial sectors in Iraq's economic growth suffered from fluctuation and instability; likewise, such sectors minimally contribute to the GDP growth of Iraq. Hence, the purpose of this study examines and analyze factors (Agriculture and Industrial Sectors) that affecting economic growth of Iraq. Research on agriculture and industrial in Iraq reveals strategies and solutions to overcome the obstacles confronting the Iraqi economy by diversifying the economy. To achieve study objective the Ordinary Least Squares (OLS), multiple regressions - Double log with economic analysis were applied in the study and the secondary data from 1980 to 2014 was used to estimate the contribution level of economic sectors to economic growth. The empirical result shows that political and security instability had negative effects on the agriculture and industrial sectors as well as on the economic growth. This study also found that both agriculture and industrial sectors had positively effected on gross domestic product (GDP). Nevertheless, the effect of industrial sector was smaller, if compared to agriculture sector. Iraqi government should give opportunities to extensively develop Agriculture and Industrial sectors and in the process help to increase gross domestic product (GDP). Furthermore, government should consider agriculture and industrial diversification as necessary strategies to develop Iraq's economy. This study contributes to the body of knowledge because this study attempts to present a clear picture of the agriculture and industrial sector of Iraq. The study also identifies the problems that facing the Iraqi economy and selects the necessary policy to solve the problems. Moreover, to the best knowledge of these researchers, no current international academic journals have published papers on the same subject.

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