Extent to Which Domestic Savings can be Activated to Achieve Economic Development in Iraq

Abstract

The current situation of local savings in the Iraqi economy, which is regarded as one of the important pillars of financing economic development, is investigated in this research. The constraints to growth in savings are also explored to understand the feasibility of activating savings in Iraq and the use of savings to solve the financing problems currently faced by the Iraqi economy. In the context of the transition from a comprehensive economy to a liberal economy connected to the global economy, policies and regulations that focus on national interests must be followed to promote economic development. Thus, local sources of financing that can reduce the negative impact of dependence on external borrowing must be sought. Especially in Iraq, many imbalances are apparent in the economic structure; the country’s economy is also highly dependent on oil resources for financing. The conclusions and recommendations of this study focus mainly on the fundamental role played by commercial banks in mobilizing savings and channeling them into productive investment channels, thereby promoting capital accumulation at the macroeconomic level. However, banking services and their role in attracting deposits have not yet reached the expected level. One of the most important recommendations is the need to develop the financial system, which is a key factor in economic development, to encourage and pool local savings, promote savings awareness, and invest them by providing credit facilities for agricultural, industrial and other productive projects.