Assessment of the Financial Sustainability of External Debt in Iraq: an Econometric Analysis
DOI:
https://doi.org/10.26668/businessreview/2022.v7i5.e704Keywords:
Blended learning, Management education, Executive education, Bibliometric analysis, Management and Business EducationAbstract
Purpose: This paper aims to study the possibility of external debt achieving financial sustainability by learning the most important economic variables affected by external debt and possible scenarios to achieve financial sustainability.
Theoretical framework: The sustainability of external debt is one of the critical issues in economies, especially emerging ones. Establishing structural projects, infrastructure projects, and economic investment is one of the essential factors in achieving financial sustainability. However, Iraq has resorted to external borrowing to confront the economic, political, and security crises represented by the drop in global oil prices.
Design/methodology/approach: The research seeks to explore developments related to Iraq's foreign debt and analyze developments related to financial sustainability in the Iraqi economy. To achieve the research goal, the paper uses an analytical approach by analyzing external debt and economic variables for the period 2004-2021 and interpreting indicators of external debt and financial sustainability in Iraq for the period 2004-2021 using the econometric model.
Findings: The results show that the external debt is not optimally exploited and directed towards consumer spending and imported goods. A few of them are towards projects with low income, which led to the lack of real financial sustainability in the Iraqi economy. Furthermore, the increase in reliance on public borrowing to finance the budget deficit led to a rise in the internal debt, especially in 2020, which means an increase in financial obligations on the state not only abroad but also internally, which made the revenue structure burdened with financial commitments internally and externally, as well as not directing domestic savings to contribute In building the economy and working on its consumption, which prevented the achievement of financial sustainability.
Research, Practical & Social implications: This paper contributes to the search for an alternative standard model capable of effectively explaining the financial sustainability of the external debt in Iraq.
Originality/value: This is one of the first papers that examine the possibility of achieving the financial sustainability of external debt in Iraq using the econometric approach.
Downloads
References
Abd AL, A. P. D. M., & Salman, H. A. (2021). The crime of excavating antiquities without consent. AL-Mouhaqiq Al-Hilly Journal for legal and political science, 13(4).
Alebadi, N. J. A., & AlSaadi, S. H. F. (2021). The Iraqi Economy: Reality, Challenges and Proposed Solutions for the Period 2003-2020. Review of International Geographical Education Online, 11(5), 3479-3493.
Kadhim, F. A., & Hussein, R. I. (2022). Analyzing the Hypothesis of Financial Dominance and Its Monetary Effects in the Iraqi Economy Duration (2004-2021). Specialusis Ugdymas, 1(43), 6965-6981.
Kasidi, F., & Said, A. M. (2013). Impact of external debt on economic growth: A case study of Tanzania. Advances in Management and Applied economics, 3(4), 59.
Lin, J. Y. (2011). New structural economics: A framework for rethinking development. The World Bank Research Observer, 26(2), 193-221.
Mohsin, M., Ullah, H., Iqbal, N., Iqbal, W., & Taghizadeh-Hesary, F. (2021). How external debt led to economic growth in South Asia: A policy perspective analysis from quantile regression. Economic Analysis and Policy, 72, 423-437.
Sharaf, M. F. (2021). The asymmetric and threshold impact of external debt on economic growth: new evidence from Egypt. Journal of Business and Socio-economic Development.
Wray, L. R. (2009). The rise and fall of money manager capitalism: a Minskian approach. Cambridge Journal of Economics, 33(4), 807-828.
Zarate-Hoyos, G. (2022). An Analysis of the Macroeconomic Determinants of Peruvian Remittances. Remittances Review, 7(1), 49-69.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Mahdi Bashir Mahmoud Al-Obaidi
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
Authors who publish in this journal agree to the following terms: the author(s) authorize(s) the publication of the text in the journal;
The author(s) ensure(s) that the contribution is original and unpublished and that it is not in the process of evaluation by another journal;
The journal is not responsible for the views, ideas and concepts presented in articles, and these are the sole responsibility of the author(s);
The publishers reserve the right to make textual adjustments and adapt texts to meet with publication standards.
Authors retain copyright and grant the journal the right to first publication, with the work simultaneously licensed under the Creative Commons Atribuição NãoComercial 4.0 (http://creativecommons.org/licenses/by-nc/4.0/), which allows the work to be shared with recognized authorship and initial publication in this journal.
Authors are allowed to assume additional contracts separately, for non-exclusive distribution of the version of the work published in this journal (e.g. publish in institutional repository or as a book chapter), with recognition of authorship and initial publication in this journal.
Authors are allowed and are encouraged to publish and distribute their work online (e.g. in institutional repositories or on a personal web page) at any point before or during the editorial process, as this can generate positive effects, as well as increase the impact and citations of the published work (see the effect of Free Access) at http://opcit.eprints.org/oacitation-biblio.html
