Economic understanding of infrastructure development

Posted on 2018-07-21 by sotaliraq


Dr.. Ahmed Abrehi Ali / Al-Furat Center for Development and Strategic Studies

This article deals with a conceptual framework for the development of infrastructure in the context of investment in the macroeconomic sense. However, the aim of this approach remains practical in an attempt to find an alternative to the current arrangements for managing investment programs and infrastructure tasks that have not been successful and can be said to have failed. This article is not disconnected and is not self-sufficient but is relevant to many previous studies.

National Capital and Infrastructure:

At the aggregate level, in the macroeconomic sense, capital or capital stock is defined as the sum of assets accumulated to participate in the generation of goods and services in a country.

Fixed capital is those assets, excluding stocks of goods, finished and semi-finished goods and raw materials. The addition is called Fixed Capital Formation, and here it is useful to distinguish between the total composition of fixed and net capital and the difference between them is extinction, that is, the function of capital formation is compensated for sputtering and net addition.

We note that the formation of capital at the national level is investment and sometimes the real investment is said to be a distinction from financial investment. As long as we are in the context of macroeconomic analysis, the formation of fixed capital is fixed investment and is intended to add to the physical assets producing goods and services.

The assets (assets) that comprise fixed capital are: buildings and constructions, plant and equipment, plant and equipment, etc., other assets in business and service units, non-personal use vehicles and all actual and assumed balance sheet assets of all business units, Money, commodity stocks, financial assets, land and other non-productive assets. There is always a correlation between fixed capital and GDP or national income.

According to international comparison data, fixed capital ranges in the medium to long term between 3 and 4 times GDP. From a simulation experiment to the Iraqi economy (conducted by the writer) fixed capital can be estimated at 3.4 times net domestic product, or 340 percent of it, for the next two decades with an average level of efficiency in investment and employment.

If fixed capital defines production capacity as the maximum output, GDP in turn restricts the course of development of fixed capital, because the latter increases by the composition of fixed capital, which is part of the output (income) that other uses, private consumption and government consumption, To the commodity inventory.

For this reason, the average gross fixed capital formation of the world's GDP is about 23 percent, but it is more than 30 percent of the output in the successful development experiences of East and Southeast Asia and more than 40 percent in China. In Iraq, the total fixed capital formation required, on an annual average, is estimated at 36 percent of GDP in the economy, excluding crude oil, and 27 percent of GDP for the whole economy. This is for the non-oil GDP growth at an annual rate of 8.04 percent and total output, 6.81 percent annually until 2040 (the writer's growth scenario).

The total gross fixed capital formation, shown above, includes compensation for ants estimated at 4 percent of fixed capital per annum and equivalent to about 12 percent of GDP. Compensation for net construction and net additions are part of the fixed capital formation and will be reflected in Iraq.

Infrastructure components and demand gap or requirements:

Infrastructure means the rule on which it bases itself, in the language, and is widely used in this sense. Development studies classify capital as Indirect Productive Capital and this is a second category called under construction. For example, irrigation networks and baselines are under construction. Agricultural mechanization, animal production and horticulture are part of the capital produced directly; in the transport sector, the road and the bridge are under construction, while trucks and passenger buses are direct productive capital. The concept gradually takes the meaning of activities that provide all other sectors with basic inputs, such as electricity and water systems, or capital, which provides the essential services necessary for production and trade activities in general, urban life, population movement and communication at the local and national levels and outreach to the outside world. The examples mentioned above: the road network, electricity, etc., are described as economic infrastructure in exchange for social infrastructure.

At present, the infrastructure includes: irrigation systems, mooring, soil reclamation, dams, reservoirs, water resources management and management; roads, bridges, ports, airports and railways; drinking water supply systems and city sewage systems; electricity generation, transmission, distribution. In addition, the so-called social infrastructure, which includes the buildings of education, health and the homes of social welfare, may be included in the concept of infrastructure construction all the buildings of public administration in addition to the above. In any case, regardless of the limits of definition of the concept, broad or narrow, it remains moving within the national fixed capital and is part of it.

In other respects, governments usually undertake infrastructure tasks because it is a capital that produces a public service called public good, which is available to all according to their nature,: For the activities of the economy and the lives of the people, and therefore the society bears the costs of production, which the state. This theoretical concept may not apply equally to all components of the infrastructure, with the fact that the population and production activities differ from the use of this or that infrastructure. Recent studies of human development, social economy and infrastructure have dealt with measures of inequality such as availability of electricity, drinking water, sanitation and other services, including distance to the nearest school or health center and others.

Indeed, there is a close correlation between levels of well-being, economic activity and attractiveness of areas for investment with the abundance and quality of infrastructure. It is clear that a large part of the national fixed capital is under construction and it is possible to imagine the size of the investment effort, that is, the fixed capital formation, required to compensate and add to the infrastructure. With the exception of the electricity system, almost all of the infrastructure is buildings and constructions, and more than 60 percent of all fixed capital is buildings and structures in Iraq and most of the world, similarly to more than 60 percent of fixed capital formation in buildings and constructions.

The high importance of the construction sector and its associated production branches and its imported inputs in capital formation and infrastructure development. It is not possible, for example, to imagine the presence and demand of traffic service on the road between Karbala and Baghdad throughout the day and night, and the price changes in order to balance the demand for service and width of the road, and when the price rises above a certain level rises The expected return on investment adds new lines ... and so on.

Therefore, the expression of need here is closer to the reality of demand, and the needs are also appreciable. In general, there is agreement on the inability of the infrastructure in Iraq in most of its categories. However, the disability assessment reference varies from one field to another. Sometimes the deficit is defined as the difference between what is desired and what people are looking for compared to developed countries and the reality of the situation; or between the capacities of the appropriate infrastructure for higher levels of economic activity that Iraq aspires to reach and the actual existence.

Besides these approaches, The urgent needs of the community in its daily life, the most prominent examples of which are inadequate education buildings, roads within the cities and the sewage network. And meet in the absence of electricity all approaches, and the inadequacy of networks of perfusion and the organization of water and sewage is an economic standard in the first place ... and so on. The lack of electricity has contributed to the reduction of industrial investment and even the operation of the productive capacities of many factories, which was one of the reasons for wasting the chances of well-being of the Iraqi family. The estimate of the need for electricity depends not only on the gap in the current situation, but on the expected or planned path of the economy in terms of overall growth and the sectoral structure of production.

Assuming immediate economic, accelerated and expanded economic development, Iraq will need between three and four times the current generation, 2040 or at least 35 thousand megawatts generation capacity, this approach to the perception of the scale of the need for Order of Magnitude.

The accumulated deficit of the school buildings is mainly due to the long-term construction failure along with the growth of the high population, so that the cohorts entering the educational stages, all of them, are more than the exiting groups, which requires an increasing number of new buildings to meet the requirements of population growth. After another. In the sewerage system, the deficit was large in primary condition, where coverage was not more than 30 percent in 1997, and network expansion was the slowest pace of residential growth.

Therefore, many new residential neighborhoods lack such services, which reduces the value of investment in housing, especially when roads are also not paved. In the "slums" may not even reach the drinking water services. These are examples of population-based needs such as education, lifestyles in the present, as well as the economic function of electricity, roads, water drainage systems ... and other infrastructure assets with socio-economic functions.

In the agricultural sector, it is impossible to maintain and increase agricultural land without adopting permanent programs for the development of irrigation and sewage systems and soil reclamation, which is the need for infrastructure derived from development opportunities and requirements. The economically viable area may expand or decrease in terms of the relationship between the value of yield, which depends on the productivity of the area unit on the one hand and the cost of agriculture on the other.

Infrastructure development programs and projects in agriculture are subject to evaluation and inputs: capital costs of the underground construction as well as maintenance and operation costs; on the revenue side the additional agricultural area and the increase of the surplus (profit) per unit of cultivated area.

On the other hand, there is repeated talk about industrial zones complete with infrastructure to encourage investment, in the sense of creating electrified areas, paved roads, railways, water, sanitation and communications systems so that industrial production units can be set up and operated at attractive rates of return on investment.

CAPITAL FORMATION AND ECONOMIC BUILDING DEVELOPMENT:

Capital formation is clearly a flow to maintain and develop the existing capital. This flow is investment. In order to realize the exact process of conceiving a closed economy or the economy of the entire world, the annual output (income) is the value of the final products, consumer and investment goods and services, that is, the output of the economic system in its total operations is what is consumed and invested. Thus, capital formation is closely related to the total output capacity expressed by GDP. And Ramp

The most efficient method of linking investment activity with the national production system was by dividing the economy into two sectors: the production of means of production (ie capital formation flows) and the production of means of consumption ie consumer goods and services.

Economist Domar adopted this method in his two-sector growth model, It is the second model1957 was not a common model Harrod-Domar. He says it was a rephrase of the ideas of the Russian economist Feldman in the 1920s, after dealing with technical errors, according to my reading of Dumar and his excerpts, and developed that pioneering attempt to become his model.

But the classification of economic activity into two sectors was known before Feldman's attempt, before and after the second Domar model. What is important is that all the models that dealt with growth by dividing the economy into two sectors clearly demonstrated and quantitative quantitative relationships that both capital formation and growth depend on the output capacity of the production sector, ie the productive capacities of all activities that contribute to the production of the flow vocabulary we call capital formation.

The awareness of this objective reality can greatly help to develop the design and management of investment programs. It remains to refer to the condition of the total balance related to investment is that the investment is always and always and the definition equals savings plus the deficit of the ongoing foreign operations.

In other words, capital formation in Iraq is only savings by the extent of the external current account deficit financed by net foreign inflows, which is usually limited. Hence the importance of savings and the vitality of the concept of savings, which is also known as that portion of non-disposable income. The issue is clear to accelerate GDP growth.

It is necessary to accelerate the building of additional productive capacity, which means increasing capital increases and infrastructure. These increases in capital are the annual capital formation. If it is necessary to pay attention to all activities producing the capital formation elements of their cards, organizational forms, techniques and foreign inputs, and develop them in a clear and intentional manner, thus ensuring rapid growth in capital formation, including sustained and accelerated growth in capital and infrastructure. Ie, the transition from the current approach, which depends on the demand side and its tendencies, and the neglect of the supply side and the conditions of production towards an alternative approach.

This alternative approach is based on the dynamic positive cycle that contains the supply and demand sides and takes the production capacity of the vocabulary of capitalist formation as its starting point. Institutional traditions will initially face this transformation if not faced with marginalization, and perhaps defamation, while challenging challenges will require strenuous efforts to re-read and adapt economic, financial and administrative knowledge, and to make a successful alternative to the current management of investment and development programs.

And the failure to explore alternatives to what was happening and is on the other hand to devote to failure and the rooting of the culture of work consistent with him.


The activities producing capital formation profiles, including infrastructure development inputs, are: construction and construction as a whole, manufacturing subsidiaries equipped with construction inputs, capital goods, transportation, design and engineering consultancy units, assistance activities, technical capabilities and import channels ... It is very important.

Those productive activities, for training residues, are both within the public sector and in the private sector. On the other hand, the diagnosis also touches upon the organizational formulas through which Iraq has been involved in the process of capital formation in general and in infrastructure in particular. In the government, the construction projects are carried out by several departments and departments engaged in the preparation of project documents, advertising, transmission and supervision of the "implementation". These departments and departments, including the contracting sections of projects and equipment contracts, have become judged inefficient, requiring no evidence, at least, for the least of the achievements.

There are many signs of inefficiency, which have been mentioned on several previous occasions, including: high costs in terms of financial allocations and expenditure over levels described as reasonable, even compared with standard costs showing the extent of waste of resources; significant deviations from technically accepted standards and standards, Even on the minimum of those specifications and standards; lengthening the duration of completion of projects, which leads to a decline in the feasibility of the stability of the impact of other factors, and also projects have spent resources and stopped work on a long period, which led to erosion and deterioration in the sections completed previously, Has not been implemented at all despite the payment of initial payments to the contracting company.

Contributing to the accumulation and aggravation of these negatives is the apparent lack of engineering control units and field costs and the expert in project management. It is clear that this format is waiting for a comprehensive reconstruction of the modalities that will help the specialized knowledge and the Iraqi and international experience. One of the most pressing demands is strict adherence to high standards and standards, perfect and optimal designs, and in all cases accurate costing for all project components in general and infrastructure in particular.

We return to the supply side. After investigating the activities producing the investment elements and taking note of their technical and managerial credentials, direct root treatment is required for a comprehensive reorganization. It is possible to ask, for example, that the government can not initiate a comprehensive assessment survey of all construction companies and engineering units that are capable of developing the infrastructure and implementing the projects of the government investment program. And the mobilization of qualified engineers, technicians and skilled workers from the employees of companies dissolved and frozen, and the completion of the formation of capable companies to operate efficiently and impartially and the best modern approaches to serve Iraq in this vital area. This trend helps to make use of what is currently spent on these companies, units and affiliates. The cost of additional project expenditures is limited, and the costs of developing the infrastructure may decrease dramatically under optimum conditions, ie when designing the process well and based on a precise calculation.

There is a lot of work in the sector of private and foreign sayings and branches equipped for shops and import channels. The bottom line is reform Reducing costs and raising quality is required because resources are limited and the infrastructure deficit is substantial. Iraq needs not to be deferred to raise the investment effort in the sense outlined in this paper to unusual levels to compensate lost opportunities.



https://www.sotaliraq.com/2018/07/21/%d8%a7%d9%84%d9%81%d9%8e%d9%87%d9%85-%d8%a7%d9%84%d8%a7%d9%82%d8%aa%d8%b5%d8%a7%d8%af%d9%8a-%d9%84%d8%aa%d8%b7%d9%88%d9%8a%d8%b1-%d8%a7%d9%84%d8%a8%d9%86%d8%a7%d8%a1-%d8%a7%d9%84%d8%aa%d8%ad%d8%aa/

Economic understanding of infrastructure development

Dr.. Ahmed Abrehi Ali / Al-Furat Center for Development and Strategic Studies



This article deals with a conceptual framework for the development of infrastructure in the context of investment in the macroeconomic sense. However, the aim of this approach remains practical in an attempt to find an alternative to the current arrangements for managing investment programs and infrastructure tasks that have not been successful and can be said to have failed. This article is not disconnected and is not self-sufficient but is relevant to many previous studies.

National Capital and Infrastructure:

At the aggregate level, in the macroeconomic sense, capital or capital stock is defined as the sum of assets accumulated to participate in the generation of goods and services in a country. Fixed capital is those assets, excluding stocks of goods, finished and semi-finished goods and raw materials. The addition is called Fixed Capital Formation, and here it is useful to distinguish between the total composition of fixed and net capital and the difference between them is extinction, that is, the function of capital formation is compensated for sputtering and net addition. We note that the formation of capital at the national level is investment and sometimes the real investment is said to be a distinction from financial investment. As long as we are in the context of macroeconomic analysis, the formation of fixed capital is fixed investment and is intended to add to the physical assets producing goods and services.

The assets (assets) that comprise fixed capital are: buildings and constructions, plant and equipment, plant and equipment, etc., other assets in business and service units, non-personal use vehicles and all actual and assumed balance sheet assets of all business units, Money, commodity stocks, financial assets, land and other non-productive assets. There is always a correlation between fixed capital and GDP or national income. According to international comparison data, fixed capital ranges in the medium to long term between 3 and 4 times GDP. From a simulation experiment to the Iraqi economy (conducted by the writer) fixed capital can be estimated at 3.4 times net domestic product, or 340 percent of it, for the next two decades with an average level of efficiency in investment and employment.

If fixed capital defines production capacity as the maximum output, GDP in turn restricts the course of development of fixed capital, because the latter increases by the composition of fixed capital, which is part of the output (income) that other uses, private consumption and government consumption, To the commodity inventory. For this reason, the average gross fixed capital formation of the world's GDP is about 23 percent, but it is more than 30 percent of the output in the successful development experiences of East and Southeast Asia and more than 40 percent in China. In Iraq, the total fixed capital formation required, on an annual average, is estimated at 36 percent of GDP in the economy, excluding crude oil, and 27 percent of GDP for the whole economy. This is for the non-oil GDP growth at an annual rate of 8.04 percent and total output, 6.81 percent annually until 2040 (the writer's growth scenario).

The total gross fixed capital formation, shown above, includes compensation for ants estimated at 4 percent of fixed capital per annum and equivalent to about 12 percent of GDP. Compensation for net construction and net additions are part of the fixed capital formation and will be reflected in Iraq.

Infrastructure components and demand gap or requirements:

Infrastructure means the rule on which it bases itself, in the language, and is widely used in this sense. Development studies classify capital as Indirect Productive Capital and this is a second category called under construction. For example, irrigation networks and baselines are under construction. Agricultural mechanization, animal production and horticulture are part of the capital produced directly; in the transport sector, the road and the bridge are under construction, while trucks and passenger buses are direct productive capital. The concept gradually takes the meaning of activities that provide all other sectors with basic inputs, such as electricity and water systems, or capital, which provides the essential services necessary for production and trade activities in general, urban life, population movement and communication at the local and national levels and outreach to the outside world. The examples mentioned above: the road network, electricity, etc., are described as economic infrastructure in exchange for social infrastructure.

At present, the infrastructure includes: irrigation systems, mooring, soil reclamation, dams, reservoirs, water resources management and management; roads, bridges, ports, airports and railways; drinking water supply systems and city sewage systems; electricity generation, transmission, distribution. In addition, the so-called social infrastructure, which includes the buildings of education, health and the homes of social welfare, may be included in the concept of infrastructure construction all the buildings of public administration in addition to the above. In any case, regardless of the limits of definition of the concept, broad or narrow, it remains moving within the national fixed capital and is part of it.

In other respects, governments usually assume the tasks of infrastructure construction because it is a capital that produces a public service called public good, which is available to all according to its nature, that is, among the common needs of economic activities and people's lives. This theoretical concept may not apply equally to all components of the infrastructure, with the fact that the population and production activities differ from the use of this or that infrastructure. Recent studies of human development, social economy and infrastructure have dealt with measures of inequality such as availability of electricity, drinking water, sanitation and other services, including distance to the nearest school or health center and others. Indeed, there is a close correlation between levels of well-being, economic activity and attractiveness of areas for investment with the abundance and quality of infrastructure.

It is clear that a large part of the national fixed capital is under construction and it is possible to imagine the size of the investment effort, that is, the fixed capital formation, required to compensate and add to the infrastructure. With the exception of the electricity system, almost all of the infrastructure is buildings and constructions, and more than 60 percent of all fixed capital is buildings and structures in Iraq and most of the world, similarly to more than 60 percent of fixed capital formation in buildings and constructions. The high importance of the construction sector and its associated production branches and its imported inputs in capital formation and infrastructure development.

It is not possible, for example, to imagine the presence and demand of traffic service on the road between Karbala and Baghdad throughout the day and night, and the price changes in order to balance the demand for service and width of the road, and when the price rises above a certain level rises The expected return on investment adds new lines ... and so on. Therefore, the expression of need here is closer to the reality of demand, and the needs are also appreciable. In general, there is agreement on the inability of the infrastructure in Iraq in most of its categories. However, the disability assessment reference varies from one field to another.

Sometimes the deficit is defined as the difference between what is desired and what people are looking for compared to developed countries and the reality of the situation; or between the capacities of the appropriate infrastructure for higher levels of economic activity that Iraq aspires to reach and the actual existence. Besides these approaches, The urgent needs of the community in its daily life, the most prominent examples of which are inadequate education buildings, roads within the cities and the sewage network. And meet in the absence of electricity all approaches, and the inadequacy of networks of perfusion and the organization of water and sewage is an economic standard in the first place ... and so on.

The lack of electricity has contributed to the reduction of industrial investment and even the operation of the productive capacities of many factories, which was one of the reasons for wasting the chances of well-being of the Iraqi family. The estimate of the need for electricity depends not only on the gap in the current situation, but on the expected or planned path of the economy in terms of overall growth and the sectoral structure of production. Assuming immediate economic, accelerated and expanded economic development, Iraq will need between three and four times the current generation, 2040 or at least 35 thousand megawatts generation capacity, this approach to the perception of the scale of the need for Order of Magnitude.

The accumulated deficit of the school buildings is mainly due to the long-term construction failure along with the growth of the high population, so that the cohorts entering the educational stages, all of them, are more than the exiting groups, which requires an increasing number of new buildings to meet the requirements of population growth. After another.

In the sewerage system, the deficit was large in primary condition, where coverage was not more than 30 percent in 1997, and network expansion was the slowest pace of residential growth. Therefore, many new residential neighborhoods lack such services, which reduces the value of investment in housing, especially when roads are also not paved. In the "slums" may not even reach the drinking water services. These are examples of population-based needs such as education, lifestyles in the present, as well as the economic function of electricity, roads, water drainage systems ... and other infrastructure assets with socio-economic functions.

In the agricultural sector, it is impossible to maintain and increase agricultural land without adopting permanent programs for the development of irrigation and sewage systems and soil reclamation, which is the need for infrastructure derived from development opportunities and requirements. The economically viable area may expand or decrease in terms of the relationship between the value of yield, which depends on the productivity of the area unit on the one hand and the cost of agriculture on the other. Infrastructure development programs and projects in agriculture are subject to evaluation and inputs: capital costs of the underground construction as well as maintenance and operation costs; on the revenue side the additional agricultural area and the increase of the surplus (profit) per unit of cultivated area. On the other hand, there is repeated talk about industrial zones complete with infrastructure to encourage investment, in the sense of creating electrified areas, paved roads, railways, water, sanitation and communications systems so that industrial production units can be set up and operated at attractive rates of return on investment.

Capital formation and infrastructure development:

It has become clear that capital formation is the flow of capital to maintain and grow capital, and this flow is investment. In order to realize the exact process of conceiving a closed economy or the economy of the entire world, the annual output (income) is the value of the final products, consumer and investment goods and services, that is, the output of the economic system in its total operations is what is consumed and invested. Thus, capital formation is closely related to the total output capacity expressed by GDP. Perhaps the most efficient method of linking investment activity with national production is through the division of the economy into two sectors: the production of means of production (ie capital formation flows) and the production of means of consumption, ie consumer goods and services. Economist Domar adopted this method in his two-sector growth model, It is a second model of 1957 and not a common model Harrod-Domar. He says it was a rephrase of the ideas of the Russian economist Feldman in the 1920s, after dealing with technical errors, according to my reading of Dumar and his excerpts, and developed that pioneering attempt to become his model. But the classification of economic activity into two sectors was known before Feldman's attempt, before and after the second Domar model. What is important is that all the models that dealt with growth by dividing the economy into two sectors clearly demonstrated and quantitative quantitative relationships that both capital formation and growth depend on the output capacity of the production sector, ie the productive capacities of all activities that contribute to the production of the flow vocabulary we call capital formation. The awareness of this objective reality can greatly help to develop the design and management of investment programs.

It remains to refer to the condition of the total balance related to investment is that the investment is always and always and the definition equals savings plus the deficit of the ongoing foreign operations. In other words, capital formation in Iraq is only savings by the extent of the external current account deficit financed by net foreign inflows, which is usually limited. Hence the importance of savings and the vitality of the concept of savings, which is also known as that portion of non-disposable income.

The issue is clear to accelerate GDP growth. It is necessary to accelerate the building of additional productive capacity, which means increasing capital increases and infrastructure. These increases in capital are the annual capital formation. If it is necessary to pay attention to all activities producing the capital formation elements of their cards, organizational forms, techniques and foreign inputs, and develop them in a clear and intentional manner, thus ensuring rapid growth in capital formation, including sustained and accelerated growth in capital and infrastructure.

Ie, the transition from the current approach, which depends on the demand side and its tendencies, and the neglect of the supply side and the conditions of production towards an alternative approach. This alternative approach is based on the dynamic positive cycle that contains the supply and demand sides and takes the production capacity of the vocabulary of capitalist formation as its starting point.

Institutional traditions will initially face this transformation if not faced with marginalization, and perhaps defamation, while challenging challenges will require strenuous efforts to re-read and adapt economic, financial and administrative knowledge, and to make a successful alternative to the current management of investment and development programs. And the failure to explore alternatives to what was happening and is on the other hand to devote to failure and the rooting of the culture of work consistent with him.

The activities producing capital formation profiles, including infrastructure development inputs, are: construction and construction as a whole, manufacturing subsidiaries equipped with construction inputs, capital goods, transportation, design and engineering consultancy units, assistance activities, technical capabilities and import channels ... The details are very important. Those productive activities, for training residues, are both within the public sector and in the private sector.

On the other hand, the diagnosis also touches upon the organizational formulas through which Iraq has been involved in the process of capital formation in general and in infrastructure in particular. In the government, the construction projects are carried out by several departments and departments engaged in the preparation of project documents, advertising, transmission and supervision of the "implementation". These departments and departments, including the contracting sections of projects and equipment contracts, have become judged inefficient, requiring no evidence, at least, for the least of the achievements.

There are many signs of inefficiency, which have been mentioned on several previous occasions, including: high costs in terms of financial allocations and expenditure over levels described as reasonable, even compared with standard costs showing the extent of waste of resources; significant deviations from technically accepted standards and standards, Even on the minimum of those specifications and standards; lengthening the duration of completion of projects, which leads to a decline in the feasibility of the stability of the impact of other factors, and also projects have spent resources and stopped work on a long period, which led to erosion and deterioration in the sections completed previously, Has not been implemented at all despite the payment of initial payments to the contracting company.

Contributing to the accumulation and aggravation of these negatives is the apparent lack of engineering control units and field costs and the expert in project management. It is clear that this format is waiting for a comprehensive reconstruction of the modalities that will help the specialized knowledge and the Iraqi and international experience. One of the most pressing demands is strict adherence to high standards and standards, perfect and optimal designs, and in all cases accurate costing for all project components in general and infrastructure in particular.

We return to the supply side. After investigating the activities producing the investment elements and taking note of their technical and managerial credentials, direct root treatment is required for a comprehensive reorganization. It is possible to ask, for example, that the government can not initiate a comprehensive assessment survey of all construction companies and engineering units that are capable of developing the infrastructure and implementing the projects of the government investment program. And the mobilization of qualified engineers, technicians and skilled workers from the employees of companies dissolved and frozen, and the completion of the formation of capable companies to operate efficiently and impartially and the best modern approaches to serve Iraq in this vital area.

This trend helps to make use of what is currently spent on these companies, units and affiliates. The cost of additional project expenditures is limited, and the costs of developing the infrastructure may decrease dramatically under optimum conditions, ie when designing the process well and based on a precise calculation. There is a lot of work in the sector of private and foreign sayings and branches equipped for shops and import channels. The bottom line is to reduce costs and improve quality, which is required because resources are limited and the infrastructure deficit is substantial. Iraq needs not be deferred to raise the investment effort in the sense outlined in this paper to unfamiliar levels to compensate lost opportunities.

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