1) The article about the fate of oil producing nations in the Middle East only goes to show the complex nature of any economy. That is, the future circumstance of any economy depends on a lot of factors affecting it. A case in point is that of Iraq, whose gross domestic product (GDP) has dipped 11% in 2020 after reeling from the economic impact of the pandemic (Raval, Cornish, & Munshi). As one of the biggest components in GDP accounting, personal consumption, private investments, and net trade have been all affected by the dampened aggregate demand domestically and from around the globe. This is not the end of the struggle, however, for oil producing countries like Iraq.Economic externalities can also affect the performance of any economy. This is true with the mandate of the International Energy Agency (IEA) to have a net-zero emission level by the year 2050 (Raval, Cornish, & Munshi). This only means that aggregate demand for crude oil, which contributes about 90% of Iraq’s government revenues and a similarly large share to its GDP, will be replaced with substitute products in the form of renewable energy sources. As this develops, countries such as Iraq should find alternative sources of economic income to maintain the health of their economies.

2. Ali Allawi who is Iraq’s finance minister explains how the coronavirus pandemic largely effected employees and the countries economy. Unfortunately, Iraq is depended mostly on theirs sells of crude oil. During the pandemic, the demand for oil was cut and so prices for the sell of oil started to fall very low. Allawi states that his treasury did not have enough money to pay millions of public employees and retirees since more than 90 percent of the revenues received are from crude oil sales and spends 45 percent of its total budget on salaries and pensions. With Iraq taking a large hit to both public and private sectors of their country, caused their domestic product to shrink 11 percent along with the rise of poverty and unemployment. With decades of oil prices increasing and decreasing theses effects have provided shocks to producer states forcing the need to develop new business sectors to reduce fossil fuel dependence. In an article by Hadi Fathallah and Timothy Robertson they state before Iraq was a one of the major oil exporting countries, it was an agriculture base economy and is still Iraq’s largest GDP after oil in revenues. Hadi Fathallah and Timothy Robertson explain that agriculture’s value increased from $2.5 billion in 2003 and 2004 to $11.5 billion in 2014. Unfortunately, it was cut short by the Islamic State of Iraq and al-Sham (ISIS), which brought the value down to around $4.6 Billion in 2019. Hadi Fathallah and Timothy Robertson state that despite the country’s issues, agriculture is the hidden success story of the last two decades and can assist in bring their economy to a better standing.

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