Economy of Iraq

According to cheeroutdoor, the modern economy of Iraq is a typical example of a national economy that exists within the framework of a totalitarian regime and a command-administrative system. As a result of the introduction of sanctions by the UN Security Council, economic growth rates have been declining since 1991. If in 1965-73 the average annual GDP growth rate reached 4.4%, in 1974-80 – 10.4%, then after the imposition of sanctions and the actual cessation of oil exports, GDP production began to decline sharply. The average annual rate of GDP decline in 1989–93 (in 1980 prices) reached minus 32.3%. Later, according to the UN, growth resumed and the average annual rate in 1995-2003 was 8.3%, which was mainly due to the restoration of the oil industry. In 2002, GDP reached (in 1995 prices) 4112 billion US dollars, and GDP per capita (in the same prices) – 165.5 US dollars.

The number of economically active population in 1997-99 amounted to 6 million people. In 1992, 14% were employed in agriculture, 19% in industry, and 67% of the economically active population in the service sector. There are no data on unemployment in Iraq, but since the imposition of UN sanctions, the number of unemployed has increased significantly due to the fall in industrial production, a sharp reduction in government spending and inflation. In 1989 inflation in Iraq reached 45%, in 1991 it jumped to about 500%. In 1991-95, according to the FAO, food prices rose 4,000 times. The resumption of oil exports from Iraq brought inflation down to around 70% in 2000.

Sectoral structure of the economy in terms of the share of industries in GDP (UN estimate, 2002, %, 1995 prices; in brackets – 1989 data in 1980 prices): agriculture, hunting, forestry and fishing – 30.5 (6.9); mining and manufacturing industry – 9.8 (60.8); production of electricity, gas and water supply – 1.0 (1.1); construction — 4.7 (4.8); trade, restaurants and hotels – 16.6 (6.7); transport, communications and warehousing — 19.3 (4.0); finance and insurance — 5.0 (4.1); real estate and business services — 5.2 (2.2), public and personal services — 5.9 (10.0); import duties and other items – 2.1.

In the industry of Iraq, the main role belongs to oil production (54.7% of the total GDP in 1989), the export earnings of which brought up to 95% of the total income in foreign currency. The cessation of oil exports by decision of the UN Security Council in August 1990 led to a drop in its production.

Taken in Ser. 1970s the course in the development of the industry towards the diversification of production and import substitution slowed down in 1980 due to the start of the Iran-Iraq war. During the war years, the state sought to increase output at existing enterprises and reduce imports due to lack of currency. Under these conditions, such new industries as mechanical engineering, chemistry and petrochemistry, metallurgy, and paper production developed in Iraq. On the new technical basis, such existing ones in the beginning also developed. 1960s industries such as the production of building materials, food, textiles.

After the 1991 war, the electric power industry in Iraq had to be restored almost completely, since the main blow of the multinational forces was aimed at disabling power plants and power lines. The total installed capacity of 30 power plants in the country at the beginning. 1991 amounted to 9552 thousand kW, of which 56% of the capacity accounted for thermal power plants, approx. 26% – at hydroelectric power stations and 17.6% – at gas turbine stations. During the bombing, 21 power plants were destroyed or damaged. On horseback In 1996, the power of operating power plants reached 5,500 thousand kW. Electricity generation reached 30.3 billion kWh in 1998.

Despite the difficulties and obstacles caused by UN sanctions, agriculture in the 1990s. increased its contribution to GDP. Of the approximately 8 million hectares of land suitable for cultivation, 4-5 million hectares are cultivated, approx. 3/4 of cultivated land is occupied by wheat and barley. The shortage of cereals, according to the FAO, amounted to 5.4 million tons in 1993 and increased in subsequent years. The production of grains and vegetables fell by 1/3 due to the destruction of irrigation systems, lack of artificial fertilizers, pesticides, agricultural machinery and equipment. In 1996, 1300 thousand tons of wheat and barley, 797 thousand tons of dates were produced, in 2000 – much less: 384.226 and 400 thousand tons, respectively. At the same time, the volume of livestock production in 1996–2000 increased from 16,000 tons of sheep and goat meat and 38,000 tons of poultry meat to 27,000 and 50,000 tons, respectively.

Economy of Iraq