Social justice under the rent economy Iraq and Norway - an example

Hamed Abdul Hussain Khudair Jubouri / Al-Furat Center for Development and Strategic Studies



The rent economy is the economy that depends on its monetary income on the outside world as a result of the export of primary resources characterized by fluctuation and low demand elasticity. on her.

The dependence of the economy on the generation of its cash income on the basis of external rent generates many political, economic, social and other problems, in the absence of a strategic vision and the absence of efficient management and the real will of decision-makers and government officials. In spite of the interplay of these problems between the rental economy, we will focus as much as possible on the issue of the lack of social justice under the economy, while addressing other problems as much as necessary.

That the increase in the contribution of oil to finance the development of consumption at the expense of production development leads to the absence of social justice between the members of the current generation on the one hand (who has to do with the government and who has nothing to do with it) and the absence of social justice between the current generation and future generations, Because oil is a rich and non-renewable wealth, the process of extracting and monetizing it and distributing it in a consumer manner to all those connected with the government will increase the well-being of those who have been deprived, while depriving others of the present generation, as well as depriving future generations of them because of their depletion or low economic importance. Due to the technological development of the search for alternatives that enrich the oil, which is slowly developing, and oil and gas rock, but the credibility of these alternatives.

At the present time, oil is the main element of the external rent for the oil countries, including Iraq. Therefore, the Iraqi economy is always described as the rental economy. In order to prove the extent of the Iraqi economy as such, it is necessary to resort to some important economic indicators such as GDP, And to know the extent of the contribution of oil in them, the higher the population of the contribution of oil in it whenever this indicates the rise of the economy and vice versa. For the first indicator, it ranges between 45-55% of the output, and more than 90% of the general revenues and commodity exports as well.

In light of these percentages, which confirms the Iraqi economy, the most prominent that emphasizes the absence of social justice among members of the current generation is the benefit of individuals who work with the government, even if the proportion of oil while those who do not work with it can not get the right of oil But in return for showing allegiance to it. In this way, the phrase "oil is a public wealth for all" becomes empty of content and the reality of the situation is "oil wealth of the government and those who show their loyalties."

With oil coverage rising to more than 80%, which includes almost 3 million people under the so-called Centralized Workforce 2016, as well as retirees and social welfare, the total number of beneficiaries of the oil wealth is now a result of its association with the government of nearly 7 million people, Or about 20% of the population of 36 million, so that more than 80% of the Iraqi people do not enjoy their rights to oil, but suffer from poverty, which amounted to 22.5%, according to the Ministry of Planning, as well as high unemployment rate ranging Between 30-40%, and even worsened between healthy B) High qualifications, poor services, infrastructure and others.

The absence of justice between the current generation and future generations can be ascertained by the high proportion of consumption of oil wealth for the benefit of the current generation, which did not achieve justice among its members, as noted above. Iraq currently has 143 billion barrels [1] and assuming that the average production will be at 4.5 million barrels, the age of oil does not exceed the duration of his stay more than 89 years, let alone if the average oil production more than this rate ?! Or its economic importance declined before it was depleted by the creation of competing alternatives.

The absence of social justice is worse than the indebtedness of subsequent generations as an additional burden of not having the oil financial rights as a result of the oil's penetration or the decrease of its importance or lack of investment by the current administration in a way that guarantees the rights of subsequent generations. Governments that do not aspire to the interest of the people and their future by investing oil wealth in building a solid economy capable of guaranteeing the rights of the present and future generations, as Norway and others have done.

We should not forget that the absence of social justice lies not in the same oil revenues as in the mismanagement of these revenues, the lack of real will, and the lack of a strategic vision through which to build a healthy economy and a fair distribution of wealth between present and future generations.

This is evidenced by some international experiences, including the Norwegian experience, where Norway worked to establish a fund to manage the proceeds of oil, thus contributing to social justice while avoiding the Norwegian economy from the Dutch disease, and this avoidance of the Dutch disease leads to the continuation Provide employment opportunities for current generations as well as improve the quantity and quality of education, health, infrastructure and other services provided to them.

It is a tool to manage the financial challenges of the elderly population and the decline in oil revenues but under a limited framework, that is, withdraw from the fund to finance the public budget when oil prices fall, not to exceed 4-3% of its revenues in order to maintain its capital value, Achieving social justice between the present generation and subsequent generations.

The Norwegian Fund, known as the Global Government Pension Fund, which was established in 1990 and began actual investment in 1990, is now worth $ 1 trillion [2]. It has been able to achieve social justice as subsequent generations can The funds are used for the benefit of the Fund when the oil wealth is implemented or decreased, and among the current generation, a certain percentage of it may be used when the economic disturbances occur to ensure the protection and continuity of the economy.

While Norway has a lower oil wealth than Iraq, taking into account the difference in population, Iraq's population (36.936 million) [3] is more than 7 times the population of Norway (5.170 million) [4] But it was able to achieve social justice between the current generation and the future through the sovereign fund, which amounted to one trillion dollars, as noted above.

While Iraq, despite its large oil wealth (143.07 billion barrels), which is more than 27 times Norway's (5.14 billion barrels) [5] and its daily production of 3481,000 barrels compared with Norway's production of 1577.1 thousand barrels per day, Considering the difference in population, but it has not yet achieved social justice, not only that, but still suffer from debt even if some of the competent authorities that the size of Iraqi debt does not constitute a danger within the acceptable limits! Successful experiences do not accept this logic. The right choice is to compensate future generations rather than accept low levels of the burden of the current generation.

The absence of efficient management, weak national will and the loss of the strategic vision that makes the image of the future present to all at the present time are the reasons behind the absence of social justice.

The solution lies in building an efficient management with a national will and has a strategic dimension to know where it wants to go, with the interest of providing an investment climate that encourages the private sector to enter the real production and compensate the state's entry instead of the state's interest in entering the production cycle itself and the depletion of oil resources Resources for future generations and rely on them only when necessary and only a specific framework as Norway did.

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