Journal of Sustainable Urban & Regional Development Studies (JSURDS)

Abstract Background and Objective: Oil revenues significantly affect fiscal policies, public spending, and budget management in Iraq. Studying these impacts helps policymakers assess the effectiveness of revenue management strategies such as oil revenue allocation, budget planning, and the establishment of stabilization funds. In addition, the impact of geopolitical risk on economic growth, which has been dominant in most oil-exporting countries, has become a necessity, and its results can have very important policy implications for policymakers and decision-makers at the macro level. Therefore, Iraq’s dependence on oil revenues makes understanding the effects of oil revenues on economic growth of great importance for assessing the sustainability of the Iraqi economy. The aim of this study is to examine the impact of oil revenues on Iraq’s economic growth by considering geopolitical risk. The results of the study will help identify the extent to which Iraq's economic growth is dependent on oil revenues and the possible risks associated with such dependence, along with existing risks.
Methodology: This study is of an applied type based on its objectives. Data and information in the background section were collected with a library approach, and the data and statistics required to estimate the empirical model were collected from the Central Bank of Iraq and the World Bank websites in a time series format, and the analysis of the research model was also carried out using the self-explanatory model with extended lags (ARDL). The country's macroeconomic variables in the period 1995 to 2022 are the data used in this study.
Findings and Conclusion:Based on the results of the model estimation, oil revenues have a positive and significant effect on economic growth in the short and long term, and the effect of geopolitical risk and the interactive effect of geopolitical risk on oil revenues are negative and significant in the long term on economic growth. The results also show a positive and significant impact of foreign direct investment on economic growth. Oil revenues as a major source of income can lead to an increase in the government budget, domestic and foreign investment in infrastructure, improvement of public services and creation of job opportunities in various economic sectors. However, political tensions and instability and geopolitical risk can reduce investment, reduce production and consequently reduce economic growth. Therefore, the government should adopt policies that reduce negative factors and increase factors that enhance economic growth.

Abstract Background and Objective: Natural resource rents can act as a dual factor; on the one hand, they provide financing for green projects, and on the other hand, they may lead to dependence on polluting industries and reduce incentives to invest in sustainable technologies. Geopolitical risk in resource-rich countries, especially in unstable regions, can lead to uncertainty in investments and a decrease in the willingness to develop green economic projects, which contributes to the weakening of sustainable growth. Uncertainty in economic policies, especially in the field of environmental regulations and taxation, can lead to reduced investor confidence and delays in the implementation of green initiatives, thus affecting sustainable economic growth.
Methodology: This study examines the effects of natural resource rents, geopolitical risk, and economic uncertainties, and other control variables such as financial development, foreign trade, foreign direct investment, and fixed capital formation on green economic growth in Iraq using an auto-explanatory model with wide lags (ARDL) and seasonal data over the period 1995-2022.
Results and Findings: The results of the model estimation show that natural resource rents, geopolitical risk, and economic policy uncertainty have a negative and significant effect on green economic growth in this have coutry. Also, financial development, foreign trade, foreign direct investment, and fixed capital formation have a positive and significant effect on green economic growth in Iraq country.