1. INTRODUCTION
Monetary policy seeks to achieve its most important goals, which is price stability, the stability of the exchange rate of the local currency, and the creation of an appropriate interest rate structure consistent with economic and local conditions, taking into account the competitive share in the market, and countries are interested in the different level of growth of their economies to activate the role of monetary policy in Addressing economic problems, whether on the level of growth, unemployment, poverty, inflation, or monetary stability, through achieving balance in the exchange rate and reaching levels of inflation that are safe and paved to stimulate growth rates (Achleitner et al., 2014).
Regarding rentier countries, they have started to move recently after the financial crisis of 2008 and through their endeavors towards monetary reform policies, to activate the role of monetary policy and raise the level of its efficiency in achieving its goals, through the development of new monetary tools consistent with the task of managing liquidity and increasing the level of efficiency of the operational frameworks for monetary policy. Central banks focused on intervening in the foreign exchange market, with the aim of mitigating external shocks, which could lead to stabilizing some macroeconomic variables, increasing the level of exports and boosting investment (Curcio and Hasan, 2015).
Small industrial projects are the backbone of the local economy, and they play a strategic role in all economies in terms of production, operation and technological innovation. These projects are also the driving force for creativity and innovation for the various branches of industrial production and have distinct characteristics that can contribute to solving many economic and social problems. This is due to its ability to provide new job opportunities through the establishment of projects that generate income, in addition to its ability to expand manufacturing gains (3).
1.1 The Problem of Study
There is instability in monetary policy in line with the new trends towards investment opportunities in small enterprises in Iraq to promote the development activity of the national economy.
1.2 The Hypothesis of the Study
The research started from the hypothesis that small enterprises have an important role in the process of reorganizing and building the national economies of many countries of the world, and there is a positive correlation between the supply of cash and the number of small enterprises.
1.3 Aims of the Study
As for the objectives of the research, they were to try to clarify the role that small enterprises can contribute to achieving economic development in Iraq by measuring and analyzing the mutual relationship between monetary stability and the growth of small industries in Iraq for the period (20032018).
2. LITERATURE REVIEW
Small enterprises have played a distinct role in the process of reorganizing and building the national economies of many countries, as small enterprises are currently receiving increasing attention by economic policy makers, and the experiences of the countries of the world have proven the important role of these projects in achieving economic development, and they are considered one of the most important requirements (Sharaf et al., 2020). Contemporary development, and one of the ways to overcome the obstacles facing the economies of these countries. The researchers base their opinions on the importance of small projects as follows.

1. Diversification of production, as small enterprises play a prominent role in diversifying products and distributing them to different economic sectors

2. Reducing the size of the additional costs Small enterprises reduce the costly errors resulting from misdirection of productive resources and poor selection of goods that are supposed to be produced.

3. Manpower employment Small enterprises use simple technology, and thus the labor intensity is very high. This is what made it absorb a lot of manpower, especially in developing countries
The industrial system for small enterprises in Iraq is characterized by the high volume of smallsized industrial units, which were about (25,747 establishments) in 2018, which constituted (96.99%) of the total establishments operating in the industrial sector compared to (600 largesized establishments) at a rate of (2.33%) and (198 medium sized establishments), at a rate of (0.77%) (Stockmans et al., 2010;Knight, 2007). As for the extent of the capacity of small industrial enterprises to use the labor component, as the number of workers in them reached 83,375, representing (41.53%) of the total workers in the industrial sector for the year 2018, and the production The value of production for that year amounted to 1939289 million Iraqi dinars, a rate of (20.94%) (Parfet, 2000;Al Qatabri, 2011).
The Central Bank of Iraq launched an initiative (1 trillion dinars) in 2015 to grant loans to small and medium enterprises to citizens through private banks, as part of the monetary policy orientation to support the unemployed segment, and those with new ideas in creating projects that have a benefit and a positive impact on the economy (6 billion dinars) were disbursed during that period, and these loans increased year after year to reach (25.1 billion dinars) in 2018, and the total loans paid from 2015 to 2018 were (65.833 billion dinars) Which constitutes (6.58%) of the amount allocated by the Central Bank, which is (1 trillion dinars) (Hong and Andersen, 2011) (Sharaf et al., 2020). This is a very low percentage over those years Which indicates the weakness of the banks’ work, as well as the lack of the role of real supervision and control, in addition to the banks’ hesitation and fear of falling into the trench of bad debts and recovering the interest of loans, and the underdevelopment of the real sector, especially small and medium enterprises, stands as an obstacle to the development and development of these projects (Yahya and Kazim, 2017).
Therefore, international institutions see that there are a set of economic and institutional factors necessary to help raise the efficiency of the bank credit granted to small and medium enterprises, including three basic determinants
Safety of the fundamentals of the economy and financial sectors.

• Institutional factors.

• Harnessing alternative possibilities for financing small and medium enterprises.
3. RESULTS AND DISCUSSION
Through the analytical aspect of the research, and by relying on the logic of economic theory, previous sources and studies, we obtained the required data concerning the dependent and independent variables (x) for the period (20002018) as shown in Table 1. The process of describing the model is based on determining the dependent variable and the independent variables according to the logic of economic theory and using multiple linear regression and the linear equation are.
These variables can be explained :

1. Dependent variable (dependent) (x1) money supply (M2) (million dinars)

2. The independent variable (X2) the exchange rate (dinars)

3. The independent variable (X3) inflation (percentage)

4. The dependent variable (y1) the number of small enterprises (thousand)

5. The dependent variable (y2) the number of workers (thousand)

6. money supply (M2) (million dinars)
3.1 Standard Variables Test
There are several methods used to ensure the stability of time series, as we will rely on three methods: graph, unit root test (ADF) and (KPSS, P.P) test.

 The independent variable (x1) the money supply (M2)  The series of the dependent variable (x1) was drawn as it was found to be unstable, and in order to ensure the stability of the time series, we test the unit root through the (DickyFuller) test shown by comparing (t (Tabular) and the amount (0.438070) is smaller than (t) calculated (3.040391) below the level of significance (0.05) and the value of (pvalue) is greater than (0.05). That is, it is unstable. The KPSS test was also tested, noting that the value of the KPSS test statistic was 0.558780) greater than the critical value (Kwiatkowski) at a significant level (0.05) of (0.463000). This means that we accept the alternative hypothesis that determines the existence of a unit root, meaning that time series Unstable. It is also noticed that the value of the (PP) test statistic was (0.466845) smaller than the critical value (Mackinnon) at the level of significance (0.05), which is (3.040391). Also, the (pvalue) was greater than (0.05). Which determines the existence of a unit root time series is unstable.

 The dependent variable (y1): the number of small establishments  The variable (Y1) series was drawn and found to be stable over time. In order to ensure the instability of the time series, we test the unit root (ADF), which is evident by comparing the tabular (t) of (3.047278) that it is greater than (3.040391) calculated below the level of significance (0.05) also the value of (pvalue) Less than (0.05), this means that we accept the alternative hypothesis that there is no unit root in the time series, that is, it is stable. The KPSS test was also tested, noting that the value of the KPSS test statistic was (0.188863) smaller than the critical value (Kwiatkowski) at a significant level of (0.05) of (0.463000). This means that we accept the null hypothesis that determines that there is no root unit. The chain is stable. It is also noticed that the value of the (PP) test statistic was (3.045402) greater than the critical value (Mackinnon) at the level of significance (0.05) and amounted to (0.040391). Also, the value of (pvalue) was smaller than (0.05). The variant decides that there is no unit root time series is stable.
The independent variable (x2) the exchange rate  the series of the dependent variable (x2) was drawn, as it turned out to be stable, and in order to ensure the stability of the time series, we test the unit root through a (Dicky Fuller) test shown by comparing (t) tabular and adult (1.317333) as greater than (t) calculated (3.081002) below the level of significance (0.05) and the value of (pvalue) is less than (0.05) This means that we accept the alternative hypothesis that there is no root of the unit in the time series is stable. The KPSS test was also tested, noting that the value of the KPSS test statistic was 0.423609)) smaller than the critical value (Kwiatkowski) at a significant level (0.05) of (0.463000). This means that we accept the null hypothesis that determines that there is no root unit. time series is stable. It is also noticed that the value of the (PP) test statistic was (4.528886) greater than the critical value (Mackinnon) at the level of significance (0.05) and of (3.040391). The value of (pvalue) was also smaller than (0.05). Who decides that there is no root unit time series is stable.
The dependent variable (y2) the number of workers  The series of the variable (Y2) was drawn and found to be stable over time. In order to ensure the instability of the time series, we test the unit root (ADF), which is evident by comparing the tabular (t) of (3.642667) that it is greater than (3.052169) calculated below the level of significance (0.05) also the value of (pvalue) Less than (0.05), this means that we accept the alternative hypothesis that there is no unit root in the time series, that is, it is stable. The KPSS test was also tested, noting that the value of the KPSS test statistic was (0.127927) smaller than the critical value (Kwiatkowski) at the level of significance (0.05) of (0.463000). This means that we accept the null hypothesis that determines that there is no root unit. The chain is stable. It is also noticed that the value of the (PP) test statistic was (3.172076) greater than the critical value (Mackinnon) at the level of significance (0.05), which is (3.052169). The variant decides that there is no unit root time series is stable.
The independent variable (x3) Inflation  The series of the dependent variable (x3) was drawn, as it was found to be unstable, and in order to ensure the stability of the time series, we test the unit root through the DickyFuller test shown by comparing (t) the tabular and the report. 0.438070) that it is smaller than (t) calculated (3.040391) below the level of significance (0.05) and the value of (pvalue) is greater than (0.05). This means that we accept the null hypothesis that there is a unit root in the time series, that is, it is not stable. The KPSS test was also tested, noting that the value of the KPSS test statistic was 0.480075) greater than the critical value (Kwiatkowski) at a significant level (0.05) of (0.463000). This means that we accept the alternative hypothesis that determines the existence of a unit root, meaning that the series Unstable. It is also noticed that the value of the (PP) test statistic amounted to (1.475583) less than the critical value (Mackinnon) at the level of significance (0.05) which is (3.040391), as well as the (pvalue) Greater than (0.05) This means that we accept the null hypothesis that determines the existence of a unit root, meaning that time series is unstable.
The independent variable (y3) the output value  The series of the dependent variable (y3) was drawn, as it was found to be unstable, and in order to ensure the stability of the time series, we test the unit root through a (Dicky Fuller) test, which is evident by comparing the tabular (t) (1.618562) is that it is smaller than (t) calculated (3.040391) below the level of significance (0.05) and also the value of (pvalue) is greater than (0.05). This means that we accept the null hypothesis that there is a unit root in the time series, that is, it is not stable. The KPSS test was also tested, noting that the value of the KPSS test statistic was 0.519561) greater than the critical value (Kwiatkowski) at a significant level (0.05) of (0.463000). This means that we accept the alternative hypothesis that determines the existence of a unit root, meaning that the series Unstable. It is also noticed that the value of the (PP) test statistic was (1.634817) smaller than the critical value (Mackinnon) at the level of significance (0.05) which is (3.040391) Also, the value of (pvalue) is greater than (0.05). This means that we accept the null hypothesis that determines the existence of a unit root, meaning that time series is not stable.
In order to achieve stability for the time series, we take the differences as follows:

 Dependent variable (x1) money supply (M2)  the series of variable (x1) is drawn and so is the unit root test (ADF). And the (KPSS) test and the (PP) test reached (3.986582) and it was found that it is stable at the first difference.

 Dependent variable (x3) Inflation  The series of variable (x3) has been plotted, as well as the unit root test (ADF). And the (KPSS) test and the (PP) test reached (3.986582) and it was found that it is stable at the first difference

 Dependent variable (y3) Number of workers  The series of variable (y3) was drawn and so was the unit root test (ADF). And the (KPSS) test and the (PP) test reached (3.986582) and it was found that it is stable at the first difference.
Model estimation (VAR) for the standard model: The (VAR) model can be estimated from the Table 5.
3.2 Economic Explanation
The first model:

 The significance of the constant value, which indicates that the value of the first difference for the fixed bound is (58456.38), with the values of all model variables constant, and this means that the number of establishments naturally increases. Without the influence of any variable, especially the money supply.

 The existence of a positive, direct effect between the money supply and the number of establishments, which means that an increase in the money supply by one unit leads to an increase in the number of establishments by (0.0012200).
The second model:

 The significance of the constant value, which indicates that the value of the first difference of the constant term is (182193.2), with the values of all the model variables constant, and this means that the number of workers naturally increases. Without the influence of any variable, especially the exchange rate.

 The existence of a positive effect, i.e., positive, between the exchange rate and the number of workers, which means that an increase in the exchange rate by one unit leads to an increase in the number of workers by (17.35879).
The third model:

 The significance of the constant value, which indicates that the value of the first difference of the constant term is (0.542866), with the values of all the model variables constant, and this means that the value of production naturally decreases. Without the influence of any variable, especially inflation.

 The existence of a negative effect, i.e., an adverse effect between inflation and the value of production, which means that an increase in inflation by one unit leads to a decrease in the value of production by (25.03518).
3.3 Statistical Interpretation
The coefficient of determination equal to (R2 = 0.99), meaning that 99% of the volume changes resulting in the dependent variables are explained by the independent variables, while the remainder (1%) is explained by other variables not included in the standard model that are included in the random variable
F test indicates the overall significance of the model; Since we find that F  stat = 440.4693 is greater than the tabular (F), and this indicates that the overall model is statistically significant.  In general, we say that the model is statistically significant.
4. CONCLUSIONS
The industrial system for small enterprises in Iraq is characterized by a high volume of smallsized industrial units in 2018, which accounted for (96.99%) of the total establishments operating in the industrial sector compared to (2.33%) and (0.77%) for large and mediumsized enterprises respectively.
The total loans granted to support small industries from 2015 to 2018 were about (65.833 billion dinars), which constitutes (6.58%) of the amount allocated by the Central Bank, which is (1 trillion dinars), and this is a very low percentage during that period Which indicates the weakness of the banks’ work and the absence of the role of supervision and control over that.
The application side proved the existence of a direct effect between the money supply and the number of establishments, as well as the existence of a direct effect between the exchange rate and the number of workers, and the existence of an adverse effect between inflation and the value of production.
5.1 Recommendations
Creating the economic environment as a stable and attractive environment for investment in the Iraqi economy, by attracting local capital working abroad and activating its investment role for it by defining laws and legislations, and the need to obtain and direct investment allocations in the general budget towards investment in the industrial sector in general and the small industries sector in a manner. Special.
Providing the economic infrastructure to develop the competitive capabilities of small industries, providing governmental support and financing for these promising industrial projects, and working on their development According to international quality standards.
Activating customs duties as a protection tool for the national product as a kind of government support provided to revitalize small industries and raise their capabilities to compete with imported goods from abroad.