IEF Project by Matthew Tan https://padlet.com/matthewtan420/r85da59oj094cbu4 en-us 2020-05-15 05:53:44 UTC 2020-07-31 06:36:05 UTC hello@padlet.com matthewtan420 https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/574278011 The Padlet must contain:
●      Title, Group members, Tutorial Class
●      Basic outline of project paper (e.g. Introduction, Issue #1, Issue #2, Conclusion)
●      At least 3 key points / main topics to be covered
●      At least 3 supporting research papers / news articles / any other relevant material (link or citation) to support each key point or case study
]]> 2020-05-15 05:57:25 UTC https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/574278011 matthewtan420 https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/574369278 Oil-rich countries in the Middle East (i.e. Saudi Arabia, Bahrain, Iraq, Iran, Syria, Kuwait, Qatar, the UAE, Oman, and Yemen) have a natural resource that many other countries do not.


Pick ONE of these countries and research on the history of their economic growth and development in the last 3 decades (1990-2019), giving your opinion on whether the abundance of oil has been a blessing or a curse.

]]> 2020-05-15 07:14:08 UTC https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/574369278 Iraq s10177349 https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/576782117 Group Members: Aaron Tan, Jovan Tan, Matthew Tan, Darius Ong, Lewis Lew, and Wesley Yu (S10177349J)

Tutorial Group: TI03]]> 2020-05-16 14:54:30 UTC https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/576782117 Issue #2 (Over-reliance on oil) s10186641 https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/662696825 On 21st April 2020, price of oil has plunged to -$37.63. And in 2020, the oil industry contributes to 97.1% of  Iraq’s exports while the gems and precious metals and fruits and nuts contribute to 2.1% and 0.1% of Iraq’s exports respectively. This shows that the oil plays an important role in determining the country’s balance of payment. With the recent Covid-19 pandemic, it has caused huge financial trouble to Iraq. The drop in price is due to Covid-19 which caused a standstill in the world’s economic production. Thus, the demand for oil exports from Iraq is low as production comes to a halt. 

The country typically exports around 3.5 million barrels per day. Even with the huge drop in oil prices, Iraq’s oil production has only dropped roughly 800 BBL/D/1k. Many oil companies in Iraq are not stopping their oil production as the costs incurred when halting the production will cost more than if the company continues to produce oil. Thus, there was not a huge drop and it will continue to rise again.

Having an abundance of oil to export, creates a surplus in Iraq’s current account. However,due to the plunge in the price of oil, the export value of oil has dropped by alot. As compared to the value of Iraq’s imports, it did not drop as much as the exports. The value of its imports was less affected by Covid 19 as compared to the oil value since the majority of its imports are machineries, jewelleries and cars. Thus, leading to the current account deficit which they are facing.

Based on the current account to GDP graph, the current account to GDP of Iraq has dropped from a surplus of 4.90% in 2018 to -1.20% in 2019. It is estimated that Iraq will need to use approximately $60 billion from their reserves to cover the deficit.

Related Articles/Materials:
1. https://www.aljazeera.com/ajimpact/oil-price-crash-compounds-problems-facing-iraq-government-200506232414949.html

2. https://oec.world/en/profile/country/asirq#:~:text=Product%20Imports,-%23permalink%20to%20section&text=The%20most%20recent%20imports%20of,Refined%20Petroleum%20(%241.62B).

3. https://tradingeconomics.com/iraq/current-account-to-gdp

]]> 2020-07-26 15:07:37 UTC https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/662696825 Issue #1 (Distribution of revenue earned from oil) s10177349 https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/664082209 With the abundance of oil in Iraq, it is said that Iraq will account for 45% of global supply growth of oil in the next two decades. This will make Iraq the next Saudi Arabia figuratively.

Iraq's exports might triple in amount from the abundance of oil, potentially amounting to more than 6 million barrels a day by 2035 from the current amount of 2.6 million barrels a day.  Iraq will surpass Russia and become the second-largest oil supplier to the entire world, along with becoming the sixth-largest exporter of natural gas, surpassing Qatar as a result. With the increasing amounts of exports, Iraq may potentially be earning near $300 Billion a year by 2035, and have the GDP Per Capita of Saudi Arabia, which is 22,533.26 USD.

With Iraq potentially having a high amount of GDP Per Capita in the future, it can be said that the country will be rich and wealthy. With such a high level of wealth, many countries such as the United States of America have suggested Iraq to distribute its wealth to the people and citizens of the country. However,  the Governing Council and higher ups in Iraq are reluctant and refuse to distribute the wealth, as they want to use the country's finances and resources on other aspects such as healthcare and education. As such, their current GDP Per Capita is a low USD5955.

However,  slow economic growth, poverty, corruption, and violent conflicts such as Civil Wars are consequences of not distributing the country's resources with the people.

Related Articles/Materials:
1. https://qz.com/13345/iraq-will-flood-the-global-oil-market/

2. https://www.nytimes.com/2003/09/10/world/struggle-for-iraq-iraq-s-wealth-popular-idea-give-oil-money-people-rather-than.html

3. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=IQ ]]> 2020-07-28 12:12:02 UTC https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/664082209 Basic Outline s10186641 https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/665552092
1. Introduction                                                                                                                     
1.1 Background of Iraq

1.2 Iraq Economic Changes from 1990- 2020

1.3 Iraq Oil Reserves

2. Main issues

2.1 Distribution of revenue earned from oil

2.3 Corruption and Waste

3. Conclusion
]]> 2020-07-30 03:38:04 UTC https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/665552092 Issue #3 (Corruption and Waste) LeeHsienLoong https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/665903769 Due to Iraq’s oil abundance, petroleum sales account for around 90% of the government’s revenue as of 2016. However, mismanagement of funds alone has led to about US$60 billion of the US$99 billion budget going to areas like state employee wages and subsidies for failing state-run companies instead of using the funds for the rebuilding of infrastructure and investment in education, hindering economic progression.

Ironically, even though Iraq has large reserves of petroleum and natural gas, it still needs to import fuel and natural gas from other countries in the world. This unusual situation is due to state-run natural gas powered stations burning roughly 1.9 billion cubic feet of gas annually due to obsolete technology, forcing it to import natural gas from neighbouring Iran at a cost of US$4 billion annually to produce the demanded amount of power by the population. Oil refineries are largely destroyed or dilapidated due to internal civil wars and resulting in Iraq being unable to produce enough fuel for domestic consumption. This forced Iraq to spend US$5 billion annually to import fuel. Iraq’s subsidies on fuel has also raised demands, causing shortages and forcing people to purchase on the black market at exorbitant prices and fueling corruption. All these could be avoided if Iraq had not mismanaged funds and had invested part of its annual budget to rebuild infrastructure.

Corruption is another factor hindering Iraq’s economic progression despite large reserves of oil and natural gas. Black markets thrive due to the mismanagement of funds by the Iraqi government as the government is unable to meet demand for resources such as fuel. Reports have suggested that criminal networks including government officials and high-ranking religious figures are involved in the smuggling of oil into such black markets, making large amounts of profits in the process. This further reduces the amount of oil exported or refined, potentially costing the government billions in the process.

Another instance of corruption in Iraq is through an old program called “Oil-for-Food” by the United Nations during the Saddam Hussein regime. This program was enacted in the 1990s through Saddam Hussein’s demise in 2003 to enable Iraq to continue exporting oil in exchange for food and medicine due to the large amount of sanctions imposed on Iraq after the Gulf War. However, a large amount of these supplies were corrupted by government officials leaving very little to the population. After Saddam Hussein’s demise, sanctions against Iraq were largely lifted as Iraq was under the military control of the Allied Forces, mainly the United States. The period of military occupation was when foreign drilling companies, mainly American companies, were able to exploit Iraq’s vast reserve of oil and American firms were estimated to have profited at least tens of billions of dollars during this period. This was due to American firms paying bribes to then-government officials in exchange for extremely profitable deals. The deals included Iraq paying highly inflated sums to these American drilling firms to drill oil wells for the extraction of petroleum in Iraq’s oil firms. The actions cost Iraq billions in dollars and hindered its economic progression.

Related Articles/Materials

1. https://nationalinterest.org/feature/mismanagement-killing-iraq-15991 

2. https://www.ganintegrity.com/portal/country-profiles/iraq/ 

3. https://www.globalpolicy.org/political-issues-in-iraq/oil-in-iraq/50768--iraqi-oil-transparency-and-corruption-.html?itemid=id ]]> 2020-07-30 15:03:32 UTC https://padlet.com/matthewtan420/r85da59oj094cbu4/wish/665903769