The Impact of Financial Crises on The Parties Involved in the Construction Project

Abstract

Iraq has witnessed a number of crises that had an impact on multiple industries, including the construction industry particularly. In 2014, Iraq was subjected to terrorist acts in several provinces, which led to insecurity and a very large financial crisis that affected all provinces, This was followed by the financial crisis that occurred due to the drop in oil prices and because oil was the main and exclusive source of income for the Iraqi economy, this resulted in a severe economic collapse. This study examines the financial crisis's detrimental effects on the construction industry. The research has divided the crisis in finance into two types: the external crisis, which has occurred as a result of external influences such as the decline in oil prices globally, which has been reflected in the budget of the Iraqi government, and the second type is the internal crisis, which has occurred as a result of bankruptcy or the bankruptcy of any of the parties involved in the constructing industry. The open questionnaire represents the practical side, which was completed by conducting personal interviews with construction and project implementation experts and financial and economic experts to discuss how to deal with the crisis's effects and address them. The researcher concluded that the factors that have a high degree of influence on the occurrence of crises are arranged according to relative importance from highest to lowest, as follows: (changes in oil prices, changes in currency exchange rates, the bankruptcy of banks, force majeure, high prices, and the unemployment rate). The (post-crisis stage) is the highest among the stages, with the highest percentage when it comes to the stage at which the financial crisis impacting construction projects could be addressed.

Keywords

• construction projects
• project parties
• the financial crisis
• internal crisis
• external crisis