THE REALITY AND DEVELOPMENTS OF TRADE EXCHANGE IN IRAQ AND NEIGHBORING COUNTRIES, THE GRAVITY MODEL
Dr. Mostafa Kazemi Najafabadi
Assistant Professor, Research Institute of Howze and University, Islamic republic of Iran(corresponding author); mostafakazemi@rihu.ac.ir
Hussein Abbas Hasan
PhD student in the Department of Economics, in Mustafa international, university, federal republic of Iraq, Hussein.zubaidi90@gmail.com
Abstract
The current study aimed to analyze the trade exchange between Iraq and neighboring countries through the use of the gravity model during the period (2008-2019). Through the descriptive analytical approach, the study showed that foreign trade is an essential indicator of competitive production capacity and a criterion for the development and balance of countries, through which it overlooks the outside world and the interaction between two or more oceans, whether regional or international, takes place. Looking at the development of the trade balance in Iraq, it appears that it has achieved a surplus in all years for the period (2008-2019), except for the year 2015, when it recorded a negative rate of -0.94 billion US dollars, and the peak of the trade balance surplus reached in 2019, where it recorded 36.05 billion dollars, and between the end of the period and its beginning, the value of the surplus in the trade balance increased by more than 10 times its value between 2009 and 2019. It has been found that Iraq enjoys good commercial relations with its neighbours, but these relations are quickly affected by the movement of other international variables that affect oil and thus affect the entire Iraqi economy, given that oil is the main axis on which the Iraqi economy revolves. Hence, the researcher believes that adopting a strategy to diversify exports and work to increase capital imports is something that could have a positive impact on the Iraqi trade balance and the Iraqi economy as a whole.
Keywords: foreign trade, trade balance, gravity model, neighboring countries.