Economy of iraq

Iraq's Economy is characterized by a strong dependence on oil exports and an emphasis on centrally-led development. Before the outbreak of the war against Iran in September 1980, the future of the Iraqi economy was bright. Oil production had reached the level of 3.5 million barrels per day and oil revenues totaled $21 billion in 1979 and $27 billion in 1980. At the start of the war, Iraq had accumulated approximately $35 billion. in foreign exchange reserves.

Iran-Iraq War

The Iran-Iraq war depleted Iraq's foreign reserves, devastated its economy and left the country saddled with more than $50 billion in foreign debt.

Iraq's invasion of Kuwait

Iraq's invasion of Kuwait in August 1990, subsequent international sanctions, and the damage caused by international coalition military actions beginning in January 1991 drastically reduced economic activity. The government's policies of diverting revenue to key regime supporters while maintaining a large military and internal security corps further worsened finances and left ordinary Iraqi citizens facing severe hardship. The implementation in December 1996 of a UN program called Oil for Food improved the living conditions of ordinary Iraqi citizens. Since 1999, Iraq has been allowed to export unlimited amounts of oil to finance its humanitarian needs, including food, medicine and parts to repair infrastructure. Oil exports vary by regime, alternately it starts or stops exports but, in general, oil exports today are three-quarters of the level they were before the Gulf War. Output per capita and the standard of living remain far below pre-Gulf war levels.

Agriculture

Despite having abundant land and water resources, Iraq is a net importer of food. According to the UN's Oil-for-Food program, Iraq imports large amounts of grain, meat, poultry, and dairy products. The government canceled its farm collectivization program in 1981, allowing private enterprise to play a larger role in the agricultural industry. The Banco Cooperativo Agrícola, with capital of nearly a billion dollars in 1984, targets low-interest, low-guarantee loans to private farmers for mechanization projects, poultry raising, and orchard development. Large modern livestock, dairy and poultry farms are currently under construction. Some of the impediments to the development of agriculture in Iraq are lack of labor, inadequate management and maintenance, salination, urban migration, and disruptions caused by past land reform and collectivization programs.

The importation of foreign workers and the increasing entry of women into jobs traditionally held by men helped make up for the lack of agricultural and industrial labor. A disastrous attempt to drain swamps in the south of the country to introduce irrigated crops to the region simply destroyed a natural food-producing area, while the concentration of salts and minerals in the soil, due to drainage, rendered the land unsuitable for the crop.

Trade

The United Nations imposed economic sanctions on Iraq after the 1990 invasion of Kuwait. The Iraqi government's refusal to allow weapons inspectors into the country to dismantle its weapons of mass destruction program has resulted in the extension of those sanctions. Under the Oil for Food program, Iraq is allowed to export unlimited amounts of oil in exchange for humanitarian supplies, including food, medicine, and spare parts for infrastructure.

Economic history