Economic experts trace the current decline in local Iraqi production to the lack of any legislation in Iraq that regulates the exchange of products with neighboring countries, which has effectively taken such
In other matters, Dr. al-Halafi spoke of the difficulty of estimating losses in the agricultural sector, in light of the Iraqi market being flooded by produce from neighboring countries. Many farmers have become despondent as a result of this; in Basra, hundreds of tons of tomatoes and cucumbers are imported daily from Iran, and many farmers in Zabir and Safwan (that are part of the province of Basra) have just abandoned farming, particularly after the government's failure to come to their aid with loans or farm subsidies.
Dr. al-Halafi affirmed that "the Iraqi state does not have any clear long-term economic strategies. Even if it had, the matter does not depend on proper planning, but rather on proper implementation." He gave as an example local governments who have not spent more than 10-15% of their regional development budgets, meaning that the rest returns to the state coffers.
Al-Halafi believes that "the central bank's fiscal policy is not in the best shape, and this has rebounded badly upon the Iraqi economy because the value of the Iraqi dinar has been downgraded with respect to the dollar, and meanwhile, the dollar is losing currency value with respect to other international currencies, such as the euro." Official estimates indicate that Iraqis have transferred approximately three billion dollars to Jordan, which has covered a quarter of that country's budget deficit. Iraqi money transfers have helped fuel the real estate markets in Jordan and the United Arab Emirates, since Iraqi traders fled the country with millions of dollars in their briefcases. Al-Halafi stresses the necessity of "the Iraqi government subsidizing the private sector, and to enter into joint public-private sector partnerships, since this would reassure Iraqi businessmen and encourage them to return home."
On the subject of the shutdown of foundries, factories, slaughterhouses, and chemical fertilizer/chemical industry plants in Basra, which had previously been described as major strategic projects, Dr. al-Halafi said, "all these factories have aged terribly, and their production cycles are over. However, it was a mistake to shut them down, since they could have been rehabilitated in various ways."
On the subject of the Iraqi government's proposal to export crude oil to Iran in exchange for refined oil, the Iraqi economist said that such procedures fall under the banner of "politico-economic exchanges", but that they do effectively fill a gap and address a need in the Iraqi market. Al-Halafi added that, "it is in the Iraqi government's interest at the moment to have such exchanges, in order to meet the Iraqi market's need for fuel. The Basra refinery has aged, and its production capacity has diminished. It is unequipped to produce 350 barrels of oil a day."
Al-Halafi had earlier announced that the Iraqi oil reserve is far greater (perhaps even double) than 115 billion barrels, based on governmental primary estimates from the early 1980s. He confirmed that a massive oil field had been discovered, in a location he refused to name in southern Iraq, with reserves estimated at anything between 21-25 billion barrels. He believes that this exceeds the petroleum reserve of Saudi Arabia's Ghowar field.