Research on World Agricultural Economy

The Impact of Structural Imbalances of Iraqi Agricultural and Industrial Sectors on Strengthening Iraq‑Turkey‑Iran International Relations: An Economic Analysis

Muhannad Khalifa Obed

Department of Economics, College of Administration and Economics, University of Fallujah, Fallujah 31002, Iraq

Hanan Shaheen Hussein

Department of Accounting, College of Administration and Economics, University of Fallujah, Fallujah 31002, Iraq

Muhannad Khamis Abed

Department of Economics, College of Administration and Economics, University of Fallujah, Fallujah 31002, Iraq

Faez Hlail Srayyih

Department of Financial and Banking Sciences, College of Administration and Economics, University of Anbar, Ramadi 31001, Iraq

Faisal Ghazi Faisal

Department of Finance and Banking, Al‑Idrisi University College, Ramadi 31001, Iraq

DOI: https://doi.org/10.36956/rwae.v6i2.1586

Received: 13 December 2024 | Revised: 13 January 2025 | Accepted: 18 February 2025 | Published Online: 25 April 2025

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Abstract

The Iraqi economy faces structural Imbalances, manifested in weak economic diversification and heavy reliance on the oil sector. This reliance exposes the Iraqi economy to fluctuations in global oil prices. It hinders the development of other sectors, especially the agricultural and industrial sectors, which have great potential for development and contribute to strengthening regional economic relations. Hence, this study aims to identify the impact of structural imbalances in the Iraqi agricultural and industrial sectors on international relations between Iraq, Turkey, and Iran, using time series data for the period (2003-2023) based on the Autoregressive Distributed Lag (ARDL) model. The research results showed a strong correlation between structural imbalances and the strength of dependence on the economies of Iran and Turkey due to the rentier component of Iraq's crude oil exports. The error correction coefficient CointEq (-1) is (-1.14) which is negative and significant, confirming the existence of joint integration and long-term equilibrium between structural imbalances in Iraq and Turkey's trade balance during the research period. The error correction coefficient CointEq (-1) is (-0.32) which is negative and significant, confirming the existence of joint integration and long-term equilibrium between structural imbalances in Iraq and Iran's trade balance during the research period. Based on these findings, the study recommends paying attention to investment sources and encouraging the work environment by attracting local and foreign capital and working to employ it in various investment channels in infrastructure projects.

Keywords: Structural Imbalances; Declared International Relations; ARDL Model; Iraqi Economy

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