Prof. Dr. Khalid Hussein Al-Marzouk College of Administrative Sciences – Al-Mustaqbal University The historical roots of the Immiserizing (Impoverishing) Growth Hypothesis date back to the mid-twentieth century, specifically to 1958, when the Indian-born American economist Jagdish Bhagwati introduced his hypothesis on economic expansion. He argued that, under certain conditions and circumstances specific to some countries—particularly rentier economies—economic growth may lead to a deterioration in the terms of trade between countries at different levels of economic development, to an extent that outweighs the positive effects of growth itself. This implies that terms of trade are often in favor of industrially and economically advanced countries. It is well known that most developing countries specialize in the production of primary and raw materials, which are characterized by low value added and low price and income elasticities of demand. In contrast, developed countries specialize in the production of manufactured goods and technologically sophisticated products that are sold at high prices and have high price and income elasticities of demand. The deterioration in the terms of trade means that the prices of manufactured goods significantly exceed those of primary and raw commodities. The immiserizing growth hypothesis is based on the assumption that developing countries are often characterized by the production of a single primary commodity or a limited number of primary commodities (such as crude oil and natural gas). Most of these countries export such commodities in their primary form without undergoing manufacturing or processing, due to the underdeveloped structure of their productive apparatus. As a result, the prices of these commodities tend to decline with increasing production and expanding supply. In contrast, industrial goods tend to experience rising prices due to the strong bargaining power of rich countries and the weak bargaining position of developing countries. In an attempt to keep pace with the requirements of modern life, developing countries often increase production in order to obtain higher revenues to meet rising government and household expenditures. Ultimately, this leads to significant growth in oil GDP and the development of extractive oil production at the expense of other sectors that constitute gross domestic product, such as agriculture, manufacturing, and even services. Consequently, a distorted economic structure emerges, characterized by a highly developed oil sector alongside the deliberate or unintended neglect of other productive sectors. This situation leads the national economy to become a one-sided (mono-sectoral) economy, in which growth in the oil sector becomes a burden and a curse on other sectors. The activities of these sectors are largely disrupted, and the income levels of workers employed in them decline. This creates conditions of increasing poverty, rising unemployment, and job losses among workers in these sectors. In addition, inflationary shocks occur as a result of rising incomes of workers in the oil sector, declining levels of non-oil production, and shortages in the supply of goods. This leads to a general increase in prices, that is, higher inflation rates accompanied by rising unemployment on a recurring basis. This outcome runs counter to the situation depicted by the Phillips Curve. Thus, although nominal incomes may be high for some groups, their real incomes will be low—especially for vulnerable groups, which constitute the majority of society.