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Economic Profile

IraqITIC.com - Economic Profile:

Economic Profile for Iraq (download)

Iraq is on the road to creating a vibrant private sector led economy and become a part of the global trading system. Almost all sectors of the economy have been opened to foreign investment, WTO observer status has been achieved and restructuring of the financial sector and privatization are well underway.

The direction of the ongoing economic policies is to create a diversified economy spread between oil, manufacturing, agriculture and services:

Vast Reserves of Oil & Gas:

Oil production dominates the economic landscape at present, accounting for 70% of GDP and 95% of exports.

Iraq's proven oil reserves at approximately 115 billion barrels are the second largest in the world. With only one tenth of the country surveyed for oil & gas deposits, unproven reserves are estimated at up to 215 billion barrels. There is an extensive 4,350 miles long pipeline infrastructure for the export of oil and gas linking production facilities to Saudi Arabia, Turkey and Syria.

The reserves-to-production ratio at 150 years - the highest in the world, combined with amongst the lowest production costs makes Iraq a highly sought after supplier for the global oil market.

Iraq also has 3.2 trillion cubic meters of proven natural gas reserves and once downstream infrastructure is fully operational there will be processing capacity of up to 22 billion cubic meters per year.

Manufacturing:

Iraq has a long and robust tradition in manufacturing which has been responsible for a substantial employment of the labor force. A full spectrum of industrial enterprise is represented ranging from large scale industrial activity to small and medium sized industry.

The SME sector is particularly vibrant with up to 70,000 business entities operating in a number of diverse sectors all over Iraq, including food stuffs, textiles & apparels, chemicals, metallic & non-metallic products, leather and leather products, wood products and industrial services.

The Services Sector:

The services sector has traditionally contributed up to 40% of the GDP, and continues to be a quarter of the economy. Prominent service industries are trade, construction, tourism, transport and the financial services.

The financial sector has great potential in the light of the ongoing restructuring of the banking sector, capital markets and the privatization of state owned enterprises. With increasing trade there is a continuously rising demand for logistical and transport services; and with the rise of religious and leisure tourism there is a continuous demand for tourism infrastructure and related facets of the hospitality industry.

Agriculture:

With a quarter of its land area cultivable, up to 77 billion cubic meters of annual river water flow and a developed irrigation system covering an area of 3.5 m hectares, agriculture is potentially one of the largest sectors of the Iraqi economy.

Most irrigated farming is located on the alluvial plain between the Tigris and Euphrates rivers. Wheat and barley are the most common winter crops, with dates, alfalfa, citrus and stone fruits amongst others. Summer crops include maize, rice, vegetables, melons, cotton and sunflowers.

Although presently claiming a 10% share of the GDP, agriculture has historically been a quarter of the economy forming a healthy balance to the oil and gas sectors. As a result of its present low base agriculture is an area of great potential growth.

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