Dr. Mohammed Armin Karbeit / Ph.D. in Political Science – Ministry of Trade / Foreign Economic Relations Department
Dr. Ali Abdul Razzaq Saleh / Ph.D. in Law – Ministry of Trade / Foreign Economic Relations Department
Any global economy consists of various elements such as capital, management, production, distribution, consumption, saving, and investment. Labor and land are also essential elements of production. The importance of these elements varies depending on the nature of the business activity, such as information technology companies or real estate development companies, and the factors that help the economy progress and grow toward the ideal state targeted by economic and political planners in each country.
The goal of any economic activity is crucial. Economics can be generally defined as a social science that studies how to employ economic resources to produce goods and services that serve the welfare of society. Therefore, economics is the science that examines how to utilize economic elements to achieve desired objectives.
There are drivers to stimulate the economy that become active when optimized and exploited; conversely, the economy loses its energy if not properly utilized. Among these essential drivers are SMEs, which require necessary support to ensure they serve as a driving force supporting the economy.
This study aims to highlight the necessity of supporting SMEs by providing a set of financial and legal incentives to encourage this sector. The importance stems from the differences among economic actors based on the adopted economic philosophies. In free economies, individuals, through the companies and institutions they establish, are the main drivers of the economy. In contrast, in socialist economies, state institutions are the controlling and organizing entities. These two philosophies often represent the most common types in the international reality, while there is also the Intermediate economy, which represents a meeting point between the philosophies of free and socialist economies. This description can apply to the Iraqi economy at this stage, and this type of economic philosophy may be permanent or temporary until the economic transformation is completed. There is also the green economy, which relies on producing goods in ways that reduce carbon emissions and prevent the elimination of biodiversity to confront climate change. This type of economy has received significant promotion in recent decades, especially with the tangible emergence of climate change results globally.
SMEs face obstacles highlighted by weaknesses and shortages in financing mechanisms, and the supply-demand relationship resulting from this financing gap. The problem cannot be confined to financing per se; rather, it should extend to projects that contribute to employment and create added value, such as agricultural and industrial projects.
The descriptive method has been adopted to study and describe the mechanisms of supporting SMEs, analyze them, and mention models from several countries to reach conclusions that serve the study’s objectives.
