Iraq Economy - An Insight

Abstract

Here, we have tried to bring out the whole and true picture of Iraq's economy. This discussion is based upon the pre and post war situations. The Iraqi economy to a large extent is dependent upon the agriculture and oil sectors. The country have witnessed tough times after 1990. And this was also one of the reasons why the economic growth has slowed down. In fact, the war that took place against Iran also had a very bad effect on the economy of the nation.

The republic of Iraq or famously known as Iraq, this country's economy is primarily based on export of oil. In fact, the statistics reveal that almost 95 percent of this country's income of foreign exchange is derived from the petroleum sector. Although, Iraq did witness an almost loss of about 11 billion dollars after they went to war with Iran in the 80's but the economic conditions improved considerably because of the oil export business.

It is found that the new Iraqi Diner as the official currency was introduced in the year 2003. It replaced the old Iraqi Dinar, its value was 1950 Dinar per US dollar. The market survey also reveals that during the period of 2006- 07, the true value of the currency have considerable risen. Below, we have tried our level best to discuss the various sectors of the Iraqi Economy.

Agricultural Sector:

Almost 50- 60 percent of the entire farmable land is taken for the purpose of cultivation. Production has witnessed a fall because of the conflicting policies adopted during the rule of Saddam Hussain. But still, today Iraq stands at such a position where they are a successful food importer. The government allowed the various private firms to intervene in this particular sector. Furthermore, over quite some time, now the women are also encouraged by the Iraqi government to work productively in this field. In fact, a huge number of foreign workers are also imported here. In the time period of 2004, the supreme production from the sector of agriculture was generated because of food products such as rice, barley, wheat, cotton and dates.

Energy Sector:

The energy sector from the last few days have been able to play a very dominating role in the Iraqi economy. Today, Iraq holds a very important place amongst the top oil rich countries all across the globe and maximum amount of the revenues are generated from the energy sector. Iraq has successfully achieved the power generating capacity of almost 5000 megawatts in the year 2004. But however, it also came to the fore that due to the turbulent political situation in Iraq, the gas and the oil sector did not achieve the required growth rate.

Service Sector:

History reveals that during the era of 90's almost seventeen private banks were formed in Iraq and also some private depositors came to the fore front. But, later it was found that these banks were only limited for the domestic transactions. In 2003, the restrictions were let go off and also made the central bank of Iraq free from the clutches of the Iraqi Government. In 2004, in a landmark decision even three foreign banks were allowed to set up their branches in Iraq. During the period of 2004-2005, this nation has been suffering from political instability and hence it has played a vital role in the service sector. Today, the tourism sector is also a very important part of the service sector.

Human Resource and Development Sector:

In 2002, the total labor force of Iraq was nearly 6.8 million. In the last two to three years, the rate of employment has also witnessed a rise. In the time period of 2004, the minimum wages allotted per month was almost 70 dollar.

Important Statistics:

2001 GNP: 59 billion US Dollars.
2001 Growth in GDP: -5.7%.
Trade balance OF Iraq: Deficit of 68%
Foreign debts per capita in 2001: 3,900 US Dollars.
GNP per capita: 2,300 US Dolars.
Foreign debts per GNP: 330%
Annual Rate of Inflation IN 2001: 60%
Iraq's most important import partners: Russia(6%), Australia(22%), China(6%), France(22%).
Employment Rate: 40%
Percentage of Populace below the poverty line: 40%
Iraq's most important export partners: USA(46%), France(10%), Italy(12%), Spain(9%).

Conclusion:

Before the period of 1990, the Iraqi Economy has been witnessing a growth much faster when compared to the other countries of the world. In fact, it was also found that the quality of health care and education was quite high. During the 80's period, the GDP or the Gross domestic product became very high because of the successful oil business. But after the 1990's, the situation in Iraq continued to decline because of the war mainly. In 2001, when the life expectancy rate was calculated, it was found to be slow as it has happened for the first time in 61 years. It became the lowest amongst the other Arab Countries. There are quite a few rebuilding procedures that have been carried out in this part of the world and even the UN is providing assistance in every possible manner.