Historically, Iraq's economy was characterized by a
heavy dependence on oil exports and an emphasis on
development through central planning.
Prior to the outbreak of the war with Iran in
September 1980, Iraq's economic prospects were bright.
Oil production had reached a level of 3.5 million barrels
per day, and oil revenues were $21 billion in 1979 and
$27 billion in 1980.
At the outbreak of the war, Iraq had amassed an estimated $35 billion in foreign exchange reserves.
After hostilities ceased, oil exports gradually increased with the construction of new pipelines and the restoration of damaged facilities.
Iraq's invasion of Kuwait in August 1990, subsequent international sanctions, damage from military action by an international coalition beginning in January 1991, and neglect of infrastructure drastically reduced economic activity.
Government policies of diverting income to key supporters of the regime while sustaining a large military and internal security force further impaired finances, leaving the average Iraqi citizen facing desperate hardships.
Implementation of a UN oil-for-food program in December 1996 improved conditions for the average Iraqi citizen.
In December 1999, Iraq was authorized to export unlimited quantities of oil to finance essential civilian needs including, among other things, food, medicine, and infrastructure repair parts.
The drop in GDP in 2001-02 was largely the result of the global economic slowdown and lower oil prices.
Per capita food imports increased significantly, while medical supplies and health care services steadily improved.
The occupation of the US-led coalition in March-April 2003 resulted in the shutdown of much of the central economic administrative structure.
The rebuilding of oil, electricity, and other production is proceeding steadily in 2004 with foreign support and despite the continuing internal security incidents, a joint UN and World Bank report released in the fall of 2003 estimated that Iraq ’s key reconstruction needs through 2007 would cost $55 billion.
According to the General Accounting Office as of April 2004, total funds available towards this rebuilding effort include: $21 billion in US appropriations, $18 billion from the Development Fund for Iraq, $2.65 billion in vested and seized assets of the former regime, and $13.6 billion in international pledges.
The US and other nations continue assisting Iraqi ministries, to the extent requested by the IIG, and offer extensive economic support.
Agriculture. Despite its abundant land and water resources, Iraq is a net food importer.
Under the UN oil-for-food program, Iraq imported large quantities of grains, meat, poultry, and dairy products.
Obstacles to agricultural development during the previous regime included labor shortages, inadequate management and maintenance, salinization, urban migration, and dislocations resulting from previous land reform and collectivization programs.
A Ba'ath regime policy to destroy the "Marsh Arab" culture by draining the southern marshes and introducing irrigated farming to this region destroyed a natural food-producing area, while concentration of salts and minerals in the soil due to the draining left the land unsuitable for agriculture.
Trade. The United Nations imposed economic sanctions on Iraq after it invaded Kuwait in 1990.
Noncompliance by Iraq with its UN obligations, particularly Iraq's refusal to allow weapons inspectors full freedom of action in dismantling Iraq's weapons program, caused those sanctions to remain in place until the Ba'ath regime was removed in 2003.
Under the oil-for-food program Iraq was allowed to export oil and use the proceeds to purchase goods to address essential civilian needs, including food, medicine, and infrastructure spare parts.
With the removal of UN sanctions, Iraq is gradually resumingtrade relations with the international community, including with the U.S.
Monetary unit of Iraq - the dinar, equal 1000 fils.
All old banknotes with Saddam Hussein's images are deduced from the reference in 2003.
Since October, 15th, 2003 Iraq has passed to new denominations face value in 50, 250, 1 000, 5 000, 10 000 and 25 000 dinars.
AIRPORTS OF IRAQ
Here you can look the information about all main international airports of Iraq. More in detail...