Economy

Economy—overview: The Ba'thist 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. The economy has been dominated by the oil sector which has traditionally provided about 95% of foreign exchange earnings. In the 1980s financial problems caused by massive expenditures in the eight-year war with Iran and damage to oil export facilities by Iran led the government to implement austerity measures and to borrow heavily and later reschedule foreign debt payments; Iraq suffered economic losses of at least $100 billion from the war. After the end of hostilities in 1988 oil exports gradually increased with the construction of new pipelines and restoration of damaged facilities. Agricultural development remained hampered by labor shortages salinization and dislocations caused by previous land reform and collectivization programs. The industrial sector although accorded high priority by the government also was under financial constraints. Iraq's seizure of Kuwait in August 1990 subsequent international economic embargoes and military action by an international coalition beginning in January 1991 drastically changed the economic picture. The UN-sponsored economic embargo has reduced exports and imports and has contributed to the sharp rise in prices. The Iraqi Government has been unwilling to abide by UN resolutions so that the economic embargo could be removed. 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. Industrial and transportation facilities which suffered severe damage have been partially restored. At current prices oil exports are about one-third of their prewar level because of the implementation of UN Security Council Resolution 986—the UN's oil-for-goods program—in December 1996. Shortages of spare parts continue. In accord with the oil-for-goods deal Iraq is allowed to export $2 billion worth of oil in exchange for badly needed food and medicine. The first oil was pumped in December 1996 and the first supplies of food and medicine arrived in April 1997. Per capita output for 1995-97 and living standards are well below the 1989-90 level but any estimates have a wide range of error.

GDP: purchasing power parity—$42.8 billion (1997 est.)

GDP—real growth rate: 0% (1997 est.)

GDP—per capita: purchasing power parity—$2 000 (1997 est.)

GDP—composition by sector:

agriculture: NA%

industry: NA%

services: NA%

Inflation rate—consumer price index: NA%

Labor force:

total: 4.4 million (1989)

by occupation: services 48% agriculture 30% industry 22%

note: severe labor shortage; expatriate labor force was about 1 600 000 (July 1990); since then it has declined substantially

Unemployment rate: NA%

Budget:

revenues: $NA

expenditures: $NA including capital expenditures of $NA

Industries: petroleum chemicals textiles construction materials food processing

Industrial production growth rate: NA%

Electricity—capacity: 6.83 million kW (1996)

Electricity—production: 31.8 billion kWh (1996)

Electricity—consumption per capita: 1 362 kWh (1996 est.)

Agriculture—products: wheat barley rice vegetables dates other fruit cotton; cattle sheep

Exports: $NA

commodities: crude oil

partners: Jordan Turkey (1996)

Imports: $NA

commodities: manufactures food

partners: France Turkey Jordan Vietnam Australia (1996)

Debt—external: very heavy relative to GDP but amount unknown (1996)

Economic aid:

recipient: ODA $NA

Currency: 1 Iraqi dinar (ID) = 1 000 fils

Exchange rates: Iraqi dinars (ID) per US$1—0.3109 (fixed official rate since 1982); black market rate—Iraqi dinars (ID) per US$1—1 530 (December 1997) 3 000 (December 1995); subject to wide fluctuations

Fiscal year: calendar year