countryaah, the economy of the old agricultural country of Iraq has
been completely dominated by oil in modern times. In 1988,
Iraq was the second largest Saudi oil producer in Saudi
Arabia, and in 1980-87 oil exports accounted for more than
98 percent of export revenue. The 1990 UN embargo brought a
halt to the country's oil exports. Until 1994, the drop in
oil exports was estimated to have cost the country
equivalent to SEK 500 billion. In December 1996, Iraq was
allowed to export oil again, though to a very small extent
and under strict UN supervision, the so-called food for oil
program. Export revenues were earmarked for reconstruction
work and food imports. During the late 1990s, oil exports
increased, and in 2002 it amounted to about 75 percent of
the 1988 level. The military defeat of the US-led coalition
in 2003 again meant that the country's economic
administration and parts of the private industrial sector
stopped functioning. With the help of international aid and
loans from the World Bank, attempts have been made to
rebuild the country's total rationed business. The recurring
attacks, corruption and political instability have made the
construction process very slow.
Despite the oil's dominant position in the country's
business, the state continued to invest in agricultural
development during the 1980s. The cultivated area increased
and parts of agriculture were privatized. The cultivation
area was 3.6 million ha in 1989. After the Kuwait War,
agriculture, like other parts of the business sector, has
been hit hard, and the privatization begun has been
transformed into increased state ownership. The most
important crops are wheat and barley. Other agricultural
products are rice, maize, cotton, tobacco and fruits and
vegetables. Forestry and fishing are poorly developed.
Despite Iraq's perhaps highest agricultural potential in the
Middle East, production has stagnated or even decreased in
key areas, with food shortages as a result. This is largely
due to inadequate drainage within irrigated areas with
consequent salinization damage to the soil.
The oil is Iraq's most important raw material by far. The
country has the world's fifth largest known oil reserves. In
2013, these were estimated at 141 billion barrels. Only a
small part of the reserves are recovered. Nevertheless, Iraq
is the second largest producer of oil in OPEC (after Saudi
Arabia); In 2013, the country produced 3 million barrels per
day. Iraq also has large gas deposits, mainly located in the
southern part of the country.
After years of sanctions and wars, the country's
infrastructure for extracting and transporting oil and gas
is greatly neglected. The country has 14 refineries in
production but most are in need of renovation. The majority
of known oil reserves are in southern Iraq (about 60
percent), while just under 20 percent are in the northern
Oil production occurs mainly in three major oil fields:
the southern and northern Rumaylah fields, west of Basra,
and the Kirkuk fields at the city of Kirkuk in the north.
Production in southern Iraq is controlled by the central
government, while at Kirkurk they are controlled by the
regional Kurdish administration.
In 2013, Iraq was the world's sixth largest oil exporter.
Exports went mainly to the United States and to refineries
in other parts of Asia.
The country also has deposits of sulfur and phosphates.
Sulfur is mined near Mosul. Phosphates are mined in the
Akashat area northwest of Baghdad. In addition, there are
some deposits of iron, copper and uranium.
90 per cent of the primary energy comes from oil.
Electricity production is mainly based on oil-fired power
plants (more than 50 percent), but also on gas turbines (26
percent) and hydropower (21 percent) from the many dams
built along Tigris and its inflows. Production was seriously
damaged during the war against Iran and Kuwait. Despite
major efforts, reconstruction has been slow, while the need
for electricity has constantly increased. In 2014, the
electricity shortage was still great, and many have provided
their own generators to meet their needs.
In 1964, all major industrial companies were
nationalized, and industrial policy's goal since then has
been to replace imports with domestic production. With the
exception of oil refineries, however, the industry is poorly
developed. Primarily, products are produced based on oil or
raw materials from agriculture. The largest industries are
the textile, plastics, fertilizers and construction
industries as well as the chemical industry. The majority of
the manufacturing industry is concentrated in Baghdad
(textile, construction and food industry) and Basra
(steelworks, fertilizers, petrochemicals).
The country's exports are dominated by oil and oil
products. The most important import goods are food,
medicine, machinery and vehicles. Among the country's main
trading partners are India, China, Turkey and the USA.