DOCSLIB.ORG

Iraq: Oil Prices and Economic Management

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Iraq: Oil Prices and Economic Management MEEA 15th International conference, Doha, March 23-26, 2016 Iraq: Oil Prices and Economic Management Joseph Sassoon ([email protected]) Abstract Iraq, undergoing transition politically and economically after the 2003 invasion, was blessed for a few years with rising oil prices, in addition to the huge amount invested by the US in the country. Yet, its economic management adversely suffered from endemic corruption and tremendous bureaucracy. Corruption reached such levels that Prime Minister Nuri al-Maliki was forced to resign when ISIL occupied parts of Iraq, and exposed the fallacy of large investments in building a strong Iraqi army. The paper begins by showing the utter dependency of the country (more than anywhere in MENA) on oil: non-oil sector constitutes barely 10% of the total GDP, and non-oil tax revenues are merely 2%. It proceeds to focus on how corruption prevented the country from benefiting from high oil prices. It addresses how the new government of Haidar al- Abadi is facing the mammoth task of reducing corruption while simultaneously fighting ISIL, all in an environment of low oil prices. The paper will underline how budget allocations were cut as a result of lower revenues in the last eighteen months. Needless to say, this is negatively impacting infrastructure development and having adverse socio- economic implications (for instance, brain drain has intensified in the last six months as a result of lack of opportunities.) Finally, the paper will deal with oil exploration in the country (ex-Kurdistan) and what the future of Iraq’s economy in the current environment of low oil prices. Overall, an important theme of the paper is to show how high oil prices and huge inflow of cash did not provide the panacea for Iraq’s economy in the decade following the invasion, and raises the question whether actually in this harsh atmosphere, the mangers of Iraq’s economy will be pushed to find durable solutions for their country rather than simply rely on exports from oil. A recent article in the New York Times carried the headline: “Iraq’s New Threat: Calamity from Falling Oil Prices,” and informed the readers that tough times lie ahead of the Iraqi people, and quoted Iraqi sources that warned that cutting salaries and pensions could sever “the last link between citizen and state.”1 What the newspaper did not tell its readers is what happened when oil prices reached $140. This paper will begin by showing 1 Tim Arango, “Iraq’s New Threat: Calamity from Falling Oil Prices,” New York Times, February 1, 2016. 1 the utter dependency of Iraq on oil, and then proceeds to analyze how the mismanagement of the economy prevented any bonanza form the high oil prices that prevailed for a number of years. Iraq is more dependent on oil than any other country in Middle East and Africa (MENA); oil production account for two-thirds of the country’s GDP almost 95 per cent of government revenues, and a staggering 99 per cent of total exports. With a breakeven oil price of $102 per barrel in 2012, which is among the highest in the region, Iraq is very vulnerable to a fall in oil prices. At the same time, the high level of current spending makes it difficult to adjust to external shocks without disproportionately cutting investment spending (IMF 2013: 14). A critical element for Iraq’s economy is that while the country is dependent on oil and 97 per cent of the state revenues are from oil, the sector employs only 80,000 workers out of a total of eight million in the labour force, roughly a total of 1 per cent of the total work force (United Nations Joint Analysis Unit 2014: 4, 6). This leads to the fact that unemployment in Iraq, as in many other countries in the region, is a serious challenge for the country and its economy. Iraq, as with many other countries in the region, is not managing to address the issue of unemployment in spite of its wealth. There is a wide divergence of statistics about unemployment, but suffice to say that unemployment hovers around 18 per cent with higher unemployment rates for those aged 15–29. Female employment is probably around 14 per cent, which is low compared to most other countries in the region (20 per cent in MENA and 37 per cent in Low and Middle Income Countries). To put these statistics in context, Iraq is the third largest Arab country in terms of population with roughly 34 million. Its population is growing at 1.8 per cent and roughly 58 per cent of the population is under 24. Similar to other countries in the region, the public sector is the major outlet for absorbing huge numbers of young graduates to the extent that army and security services have returned to the levels of the 1980 Iran–Iraq War with more than one million members. 2 Table 1: Iraqi Exports and Imports vs. Oil Prices, 2003-2014 2003 2005 2007 2009 2011 2013 2014 Total Iraqi $9.71 $23.70 $39.59 $39.43 $79.68 $89.77 $83.98 Exports Billion Billion Billion Billion Billion Billion Billion in US$a Total Iraqi $9.93 $23.53 $19.56 $41.51 $47.80 $59.35 $53.18 Imports Billion Billion Billion Billion Billion Billion Billion in US$b Brent Crude $28.85/ $38.26/ $72.44/ $61.74/ $111.26/ $108.56/ $98.97/ Oil Price Barrel Barrel Barrel Barrel Barrel Barrel Barrel in US$c Sources: a) Iraqi Central Bank. https://www.cbi.iq/documents/Binder12_f.pdf. b) Iraqi Central Bank. https://www.cbi.iq/documents/Binder12_f.pdf. c) U.S. Energy Information Administration. http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rbrte&f=a As illustrated in table one, Iraqi export revenue tracked oil prices closely between 2003 and 2014, underscoring the importance of oil to Iraq’s export economy. During periods of high oil prices, export revenues rose. Iraqi spending on imports remained largely detached from oil prices, but declined in 2014 in tandem with the recent oil price drop. Table 2: Iraq’s Reserves and Current Account Balances, 2005-2014 2005 2007 2009 2011 2013 2014 Iraq Total reserves (includes gold, current $12.20 $31.50 $44.30 $61.00 $77.70 $66.40 US$) Billion Billion Billion Billion Billion Billion Iraq Current account balance (BoP, current ($3.34) $15.52 ($1.13) $26.13 $7.90 ($11.90) US$) Billion Billion Billion Billion Billiona Billiona Source: World Bank, World Development Indicators, Iraq. http://data.worldbank.org/data-catalog/world- development-indicators. 2013 and 2014 Current Account Balance data from Iraqi Central Bank Annual Economic Report 2014. https://www.cbi.iq/documents/AnnualEconomic_report%202014_f.pdf, p. 4. 3 Iraqi total reserves and current account balance also reflect the impact of oil on the financial health of the country, as illustrated in Table 2. Iraq’s current account balance increased to $26.13 billion in 2011, a record high year for oil prices, but fell to -$11.90 billion in 2014 due in part to the steep fall in oil prices during the latter half of the year. Iraq’s total reserves mirror the change in current account balance. Table 3: Iraq’s Oil Production and Oil Exports in 2015 Month (2015) Iraq Crude Oil Iraq Crude Oil Iraq Crude Oil Export Revenues Exports (‘000 Production (US$) barrels/day) (‘000 barrels/day January $3.26 Billion 2,535 3,042 February $3.40 Billion 2,981 2,783 March $4.48 Billion 3,077 3,339 April $4.79 Billion 3,145 3,176 May $5.45 Billion 3,187 3,288 June $5.29 Billion 3,187 3,591 July $4.84 Billion 3,105 3,718 August $3.93 Billion 3,079 3,760 September $3.73 Billion 3,052 3,755 October $3.29 Billion 2,708 3,659 November $3.66 Billion 3,365 3,747 December $2.92 Billion 3,270b 4,130a Sources: Export revenues from Ministry of Oil https://www.oil.gov.iq/index.php?name=Pages&op=page&pid=77. Production and export data from JODI Database http://www.jodidb.org/TableViewer/tableView.aspx?ReportId=57431. a) December 2015 production figure pulled from OPEC Monthly Oil Market Report January 2016. http://www.opec.org/opec_web/static_files_project/media/downloads/publications/MOMR%20January%2 02016.pdf, p. 69. b) December 2015 export figure taken from Reuters. See http://www.reuters.com/article/iraq-oil- idUSL8N14I1LX20151230. As Table 3 shows, Iraqi export figures for 2015 highlight the challenging dynamic that Iraq is facing. Despite increasing oil exports and production to near-record highs in 2015, Iraq’s export revenues were far lower than the previous year, and declined even further near the end of 2015. Whereas average monthly oil exports of 3.18 million barrels per 4 day (b/d) in May 2015 got Iraq $5.45 billion in revenues, by December revenues had nearly halved, despite an increase in exports of 83,000 b/d. Furthermore, Iraq had proportionally less oil to export as a percentage of its total production by the end of 2015, as the country started paying back international oil companies (IOCs) in oil due to cash shortages, which ultimately cut into oil export revenues. In March 2015, Iraq exported approximately 92 per cent of its overall production for that month. In October, Iraq exported only 74 per cent of its monthly production. Iraqi budget: Iraq’s 2015 budget was based on oil projections of $56 per barrel and an average export rate of 3.3 million b/d.2 According to the EIA, Brent Crude averaged $52.32 per barrel and WTI averaged $48.66 per barrel, significantly below the country’s forecasts.3 Iraq’s 2016 budget is based on estimates of $45 per barrel oil and an export rate of 3.6 million b/d.4 Brent crude averaged $30.70 per barrel in January 2016,5 well below Iraqi projections.
Load more

Recommended publications
  • The Real Outcome of the Iraq War: US and Iranian Strategic Competition in Iraq
    The Real Outcome of the Iraq War: US and Iranian Strategic Competition in Iraq By Anthony H. Cordesman, Peter Alsis, Adam Mausner, and Charles Loi Anthony H. Cordesman Arleigh A. Burke Chair in Strategy Revised: December 20, 2011 Note: This draft is being circulated for comments and suggestions. Please provide them to [email protected] Chapter 6: US Strategic Competition with Iran: Competition in Iraq 2 Executive Summary "Americans planted a tree in Iraq. They watered that tree, pruned it, and cared for it. Ask your American friends why they're leaving now before the tree bears fruit." --Mahmoud Ahmadinejad.1 Iraq has become a key focus of the strategic competition between the United States and Iran. The history of this competition has been shaped by the Iran-Iraq War (1980-1988), the 1991 Gulf War, and the US invasion of Iraq in 2003. Since the 2003 war, both the US and Iran have competed to shape the structure of Post-Saddam Iraq’s politics, governance, economics, and security. The US has gone to great lengths to counter Iranian influence in Iraq, including using its status as an occupying power and Iraq’s main source of aid, as well as through information operations and more traditional press statements highlighting Iranian meddling. However, containing Iranian influence, while important, is not America’s main goal in Iraq. It is rather to create a stable democratic Iraq that can defeat the remaining extremist and insurgent elements, defend against foreign threats, sustain an able civil society, and emerge as a stable power friendly to the US and its Gulf allies.
    [Show full text]
  • War with Iraq with War
    WAR WITH IRAQ : COSTS , CONSEQUENCES War with Iraq , AND ALTERNATIVES Costs, Consequences, and Alternatives Carl Kaysen Steven E. Miller Martin B. Malin William D. Nordhaus John D. Steinbruner committee on committee on international security studies international security studies War with Iraq Costs, Consequences, and Alternatives Carl Kaysen Steven E. Miller Martin B. Malin William D. Nordhaus John D. Steinbruner ©2002 by the American Academy of Arts and Sciences All rights reserved ISBN#: 0-87724-036-1 The views expressed in this volume are those held by each contributor and are not necessarily those of the Officers and Fellows of the American Academy of Arts and Sciences or its Committee on International Security Studies. Please direct inquiries to: American Academy of Arts and Sciences 136 Irving Street Cambridge, MA 02138-1996 Telephone: (617) 576-5000 Fax: (617) 576-5050 E-mail: [email protected] Visit our Website at www.amacad.org Layout: Jordi Weinstock Contents vii PREFACE 1 CHAPTER 1 U.S. National Security Policy: In Search of Balance Carl Kaysen, John D. Steinbruner, and Martin B. Malin 7 CHAPTER 2 Gambling on War: Force, Order and the Implications of Attacking Iraq Steven E. Miller 51 CHAPTER 3 The Economic Consequences of a War with Iraq William D. Nordhaus 87 CONTRIBUTORS CHAPTER 3 The Economic Consequences of a War with Iraq WILLIAM D. NORDHAUS Armed with strong resolutions from the U.S. Congress and the UN Security Council, the United States is marching toward war with Iraq. The October 2002 Congressional Resolution authorizing the use of force describes U.S. policy, “to defend the national security of the United States against the continuing threat posed by Iraq and enforce all relevant United Nations Security Council resolutions regarding Iraq.”1 In early November 2002, the unanimous Security Council Resolution warned “Iraq that it will face serious consequences as a result of its continued violations of its obligations.
    [Show full text]
  • A Return to Baathist Economics? Escaping Vicious Circles in Iraq
    A Return to Baathist Economics? Escaping Vicious Circles in Iraq Strategic Insights, Volume III, Issue 7 (July 2004) by Robert Looney Strategic Insights is a monthly electronic journal produced by the Center for Contemporary Conflict at the Naval Postgraduate School in Monterey, California. The views expressed here are those of the author(s) and do not necessarily represent the views of NPS, the Department of Defense, or the U.S. Government. For a PDF version of this article, click here. "...the lack of law and order is bound to delay the country's economic rebirth. Yet without that rebirth, the country will remain sullen, resentful and a breeding ground for all sorts of undesirable developments. It is a vicious circle." - Al-Jazeerah commentary [1] "Everyone is aware of the risk of terrorism. But there are risks inside Iraq that are within our control and we're not managing them well. I would like to flag the de-Baathification process." - Samir Shakir Mahumoud, Interior Minister, Iraqi Interim Government [2] "We want to go back to the old healthy management of the 1970s." - Thamir Ghadhban, Oil Minister, Iraqi Interim Government [3] Introduction In the midst of the daily reports of suicide bombings, insurgents, coalition causalities, the relentless toll of civilian dead and wounded, and general all-around grief, any appraisal of Iraq's economy has seemed irrelevant when set against the greater military and security concerns.[4] Yet the long run health of the economy will be crucial in determining if Iraq will be able to transition to a stable democracy.[5] Many authorities on post-conflict reconstruction believe that the post-June 30Interim Government's most significant challenge will be delivering measurable improvements to the Iraqi people.
    [Show full text]
  • Understanding ISIS: the Political Economy of War-Making in Iraq" by Jacob LYPP
    "Understanding ISIS: The political economy of war-making in Iraq" By Jacob LYPP Course “The Political Economy of the Middle East and North” Taught by Eckart Woertz at Sciences Po Fall 2016 This paper has received the KSP Student Paper Award of the Kuwait Program at Sciences Po © The copyright of this paper remains the property of its author. No part of the content may be reproduced, published, distributed, copied or stored for public or private use without written permission of the author. All authorisation requests should be sent to [email protected] Jacob Lypp – PSIA 2016/2017 OCMO 2195 – The Political Economy of the Middle East and North Africa Understanding ISIS: The political economy of war-making in Iraq Introduction Public perceptions of the ongoing conflict in Iraq and Syria are heavily dominated by sectarian narra- tives. It is assumed that “[t]he way in which what is going on in the Middle East has become a reli- gious war has long been obvious” (Murray 2014). According to this view, present-day violence in the region is best understood as a resurgence of ancient hatreds, while political, economic, or other ‘ra- tional’ calculations comprehensible to the Western analyst take the back seat. Academic scholarship (see Fearon and Laitin 2000 for an overview), however, has consistently emphasised the shortcomings of such a primordialist perspective: in spite of the enduring nature of ethnoreligious cleavages, vio- lence is only episodic; simplistic arguments about ancient hatreds consequently fail to explain why ethnic or sectarian language is relied upon in any particular time and place while remaining unused in others.
    [Show full text]
  • Iraq Ten Years On’ Conference and at the Suleimani Forum at the American University of Suleimaniya, Both in March 2013
    Iraq on the International Stage Iraq on the International Stage Foreign Policy and National Jane Kinninmont, Gareth Stansfield and Omar Sirri Identity in Transition Jane Kinninmont, Gareth Stansfield and Omar Sirri July 2013 Chatham House, 10 St James’s Square, London SW1Y 4LE T: +44 (0)20 7957 5700 E: [email protected] F: +44 (0)20 7957 5710 www.chathamhouse.org Charity Registration Number: 208223 Iraq on the International Stage Foreign Policy and National Identity in Transition Jane Kinninmont, Gareth Stansfield and Omar Sirri July 2013 © The Royal Institute of International Affairs, 2013 Chatham House (The Royal Institute of International Affairs) is an independent body which promotes the rigorous study of international questions and does not express opinions of its own. The opinions expressed in this publication are the responsibility of the authors. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical including photocopying, recording or any information storage or retrieval system, without the prior written permission of the copyright holder. Please direct all enquiries to the publishers. Chatham House 10 St James’s Square London SW1Y 4LE T: +44 (0) 20 7957 5700 F: + 44 (0) 20 7957 5710 www.chathamhouse.org Charity Registration No. 208223 ISBN 978 1 86203 292 7 A catalogue record for this title is available from the British Library. Cover image: © Getty Images/AFP Designed and typeset by Soapbox Communications Limited www.soapbox.co.uk Printed
    [Show full text]
  • Economic Policy and Prospects in Iraq
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Crane, Keith; Block,, William; Foote, Christopher; Gray, Simon Working Paper Economic Policy and Prospects in Iraq Public Policy Discussion Papers, No. 04-1 Provided in Cooperation with: Federal Reserve Bank of Boston Suggested Citation: Crane, Keith; Block,, William; Foote, Christopher; Gray, Simon (2004) : Economic Policy and Prospects in Iraq, Public Policy Discussion Papers, No. 04-1, Federal Reserve Bank of Boston, Boston, MA This Version is available at: http://hdl.handle.net/10419/23447 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu No. 04-1 Economic Policy and Prospects in Iraq Christopher Foote, William Block, Keith Crane, and Simon Gray Abstract: This paper describes the Coalition Provisional Authority’s attempts to stabilize and reform Iraq’s economy along market lines.
    [Show full text]
  • Refugees from Iraq Their History, Cultures, and Background Experiences
    COR Center Enhanced Refugee Backgrounder No. 1 October 2008 Refugees fromIraq COR Center Enhanced Refugee Backgrounder No. 1 October 2008 Refugees from Iraq Their History, Cultures, and Background Experiences Writers: Edmund Ghareeb, Donald Ranard, and Jenab Tutunji Editor: Donald A. Ranard Published by the Center for Applied Linguistics Cultural Orientation Resource Center Center for Applied Linguistics 4646 40th Street, NW Washington, DC 20016-1859 Tel. (202) 362-0700 Fax (202) 363-7204 http://www.culturalorientation.net http://www.cal.org The contents of this Backgrounder were developed with funding from the Bureau of Population, Refugees, and Migration, United States Department of State, but do not necessarily represent the policy of that agency and the reader should not assume endorsement by the federal government. The Backgrounder was published by the Center for Applied Linquistics (CAL), but the opinions expressed herein do not necessarily reflect positions or policies of CAL. Production supervision: Sanja Bebic Writers: Edmund Ghareeb, Donald Ranard, and Jenab Tutunji Editor: Donald A. Ranard Copyediting: Jeannie Rennie Proofreading: Craig Packard Cover: Ellipse Design Design, illustration, production: Ellipse Design ©2008 by the Center for Applied Linguistics The U.S. Department of State reserves a royalty-free, nonexclusive, and irrevocable right to reproduce, publish, or otherwise use, and to authorize others to use, the work for Government purposes. All other rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher. All inquiries should be addressed to the Cultural Orientation Resource Center, Center for Applied Linguistics, 4646 40th Street, N.W., Washington, D.C.
    [Show full text]
  • Economic Policy and Prospects in Iraq
    No. 04-1 Economic Policy and Prospects in Iraq Christopher Foote, William Block, Keith Crane, and Simon Gray Abstract: This paper describes the Coalition Provisional Authority’s attempts to stabilize and reform Iraq’s economy along market lines. It argues that while security concerns remain serious, Iraq’s economy has not been crippled by violence. However, sustained economic growth will depend on whether Iraq’s future leaders pursue the pro-market approaches the Coalition has advocated. If the Iraqi economy is to reach its potential, it will need to go even farther than the Coalition did, implementing reforms the Coalition did not pursue because of security concerns. ______________________________________________________________________________________ Christopher Foote is a Senior Economist, Federal Reserve Bank of Boston, Boston, Massachusetts. William Block is an Economist, U.S. Department of the Treasury, Washington, D.C. Keith Crane is a Senior Economist, the RAND Corporation, Arlington, Virginia, office. Simon Gray is Adviser to the Governor, Bank of England, London, United Kingdom. All four of the authors worked at the Coalition Provisional Authority, Baghdad, Iraq. Their e-mail addresses are <[email protected]>, <[email protected]>, <[email protected]>, and <[email protected]>, respectively. This paper is available on the web site of the Federal Reserve Bank of Boston at http://www.bos.frb.org/economic/ppdp/index.htm and is forthcoming in the Journal of Economic Perspectives, 2004. The views expressed in this paper are solely those of the authors and do not reflect official positions of the Coalition Provisional Authority, the U.S. Treasury, the Bank of England, the U.S.
    [Show full text]
  • Oil & Gas Law of Iraq
    Introduction to the Laws of Kurdistan, Iraq Working Paper Series Oil & Gas Law of Iraq Iraq Legal Education Initiative (ILEI) American University of Iraq, Sulaimani Stanford Law School Kirkuk Main Road Crown Quadrangle Raparin 559 Nathan Abbott Way Sulaimani, Iraq Stanford, CA 94305-8610 www.auis.ed.iq www.law.stanford.edu TABLE OF CONTENTS I. INTRODUCTION ............................................................................................................... 2 II. BACKGROUND AND HISTORY ................................................................................... 4 A. Beginnings ....................................................................................................................... 4 B. History from 1918 to 1945 ............................................................................................... 4 C. History from 1945 to 1980 ............................................................................................... 5 D. The 1980s and 1990s: War Years .................................................................................... 6 E. The Coalition Provisional Authority and the Interim Government of Iraq ...................... 7 III. IRAQ’S OIL AND GAS LEGAL FRAMEWORK ....................................................... 8 A. The Constitution and Impact of Federalism .................................................................... 9 B. The Meaning of Article 111 ........................................................................................... 10 C. The Draft Federal Oil
    [Show full text]
  • The Economic Consequences of a War with Iraq
    The Economic Consequences of a War with Iraq William D. Nordhaus, Yale University October 29, 2002 Revised Introduction The drums of war are beating as the United States marches, two steps forward and one step backward, toward war with Iraq. The Congressional Resolution authorizing the use of force describes U.S. policy as “to defend the national security of the United States against the continuing threat posed by Iraq and enforce all relevant United Nations Security Council resolutions regarding Iraq.”1 The major benefits of a successful war are reckoned to be disarming Iraq of its weapons of mass destruction and removing a leadership that is unrelentingly hostile to the United States. But what of the costs? Even asking such a question may be thought a sign of insufficient resolve at best and appeasement at worst. However, although cost estimates are often ignored when war is debated, most people recognize that the costs in dollars, and especially in blood, are acceptable only as long as they are low. If the casualty estimates mount to the thousands, if the war pushes the economy into deep recession or requires a large tax increase, and if the United States becomes a pariah in the world because of brutal attacks on civilian populations, then decision makers in the White House and the Congress might not post so expeditiously to battle. Given the salience of cost, it is surprising that there have been no systematic public analyses of the economics of a military conflict in Iraq. This essay attempts to fill the gap. It is recognized that the estimates here are virtually certain to be wrong, for the fog of war extends far beyond the battlefield to include forecasts of political reactions and economic consequences.
    [Show full text]
  • J:\Mesopotamia\Abbasid Collpase-7.Wpd
    The Collapse of the World’s Oldest Civilization: The Political Economy of Hydraulic States and the Financial Crisis of the Abbasid Caliphate By Robert C. Allen Global Distinguish Professor of Economic History Faculty of Social Science New York University Abu Dhabi [email protected] Leander Heldring Post-doctoral Fellow Department of Economics Harvard University [email protected] 2016 We thank Mattia Bertazzini for outstanding research assistance and the Research Endowment Fund of New York University Abu Dhabi for financial support. The title of the paper is not too dramatic. Mesopotamia was the birthplace of civilization. Uruk was the world’s first city, and it was founded around 3500 BC. One great civilization followed another for the next four thousand years. Cities depended on a productive agriculture, and agriculture required irrigation. The irrigation system reached its peak under the Persian Sassanian empire, which lasted from 224 AD to 621 AD, when the Persians were defeated by the Arabs. The victorious invaders continued the tax and administration policies of the Sassanians and enjoyed remarkable success for two and a half centuries. Baghdad was founded and became the centre of the Golden Age of Islam in the 8th and 9th centuries. But then something went wrong. By the middle of the 10th century the irrigation system had collapsed and southern Iraq was largely depopulated. It remains like that today (Map 1). What happened? There’s no shortage of explanations, and they can be grouped under the trilogy of geography, culture, and institutions.1 Geography played a central role. Southern Iraq is a desert crossed by the Tigris and Euphrates rivers.
    [Show full text]
  • Coalition Provisional Authority on the Reconstruction of Iraq
    0 BACKGROUND GUIDE: CPA – THE RECONSTRUCTION OF IRAQ 1 BACKGROUND GUIDE: CPA – THE RECONSTRUCTION OF IRAQ Dear Delegates, It is with great excitement and pleasure that I welcome you to UTMUN 2018! My name is Mohid Malik, and I am your director for the Coalition Provisional Authority on the Reconstruction of Iraq. I alongside with my vice-director A.J. Davidson, my two crisis analysts John Zabbal and Omar Kittaneh, as well as my moderator Danna Aranda all extend our warmest welcome to you for a very exciting weekend of robust debate! I am currently a third-year student at the University of Toronto specialising in Political Science with a minor in History. This conference will mark my second year of being involved with UTMUN. I have also attended numerous conferences in cities all across Europe during my time as a high school student. My passion for MUN has been a significant part of my life for many years and I look forward to showcasing that passion through assisting you before and during the conference. My goal is to ensure that everyone leaves the conference feeling more confident in themselves with regards to public speaking. I am also hoping that everyone will not only grow as intellectuals, but more importantly, as people. The Coalition Provisional Authority committee will be discussing three topics that are of the utmost importance in helping facilitate the transition of Iraq from a war-torn country to a secure, economically stable, and democratic state. The first topic that you will be focusing on is the policy of de-Ba’athification.
    [Show full text]