Iraq: System Essentials
Chapter 3: Persian Gulf, Arabian Peninsula
Iraq: System Essentials
Economy
/ Oil / Trade / Agriculture
/ Power Generation
Overview
/ Leadership / Infrastructure
/ Population / Fielded Forces
/ Table of Contents
Irrigation canal south of Baghdad; Iraq is not self-sufficient in food production
The Ba'athist regime engages in extensive central planning and management of industrial production and foreign trade while leaving some small-scale industry and services and most agriculture to private enterprise. Iraq's seizure of Kuwait in August 1990, subsequent international economic embargoes, and military action by the international coalition beginning in January 1991 has drastically affected Iran's economic picture.
Industrial and transportation facilities suffered severe damage and have been only partially restored. Shortages of spare parts continue. Living standards deteriorated even further in 1993 and early 1994; consumer prices at least tripled in 1993. The government's policies of supporting large military and internal security forces and of allocating resources to key supporters of the regime have exacerbated shortages.
The economy has been dominated by the oil sector, which has traditionally provided about 95% of foreign exchange earnings. Since the Gulf War, the Iraqi government has concentrated on repairing damage to crude oil production facilities. Despite these efforts, however, oil refining capacity is estimated to be less than 10% of the pre-Gulf War levels.
The UN-sponsored economic embargo and trade sanctions remain in-place blocking export of Iraq's principle cash commodity, oil, and this lack of income has contributed to a sharp rise in domestic prices and subsequent decline in the standard of living.
Agriculture accounted for 11% of GNP and 30% of labor force before the Gulf war. Principal agricultural products are wheat, barley, rice, vegetables, dates, other fruit, cotton, wool, and livestock (cattle and sheep). The country is not self-sufficient in food output and conditions have progressively worsened since the end of the Gulf War.
Immediately following the war, virtually all of Iraq's electrically-powered installations had ceased to function due to the damage to power plants, switching stations, etc. Repairs to the power grid have progressed and now, approximately 7,300,000 kW of electrical power is available out of a generating capacity of 9,902,000 kW.
