Iraq Overview: Economy
The oil industry dominates Iraq's economy, accounting for nearly 95% of the country's revenues. Oil is produced mainly by the Iraq Petroleum Company, which was owned by an international group of investors until it was nationalized in 1972. The oil is piped to Turkey, Tripoli (Lebanon), Baniyas (Syria), and the Persian Gulf. Oil exports, which had suffered during the Iran-Iraq War , improved during the late 1980s, only to be severely decreased by embargoes related to the Persian Gulf War . In 1996, a UN agreement allowed Iraq to export oil for the first time since 1990; by 2002, oil production was about 70% of what it was in the 1970s. Following the U.S. invasion in 2003, oil production gradually returned to what it had been in 2002 and began to exceed that in 2012.
Aside from petroleum production and refining, Iraq has a small, diversified industrial sector, including food processing and the production of chemicals, textiles, leather goods, construction materials, and metals. New industries have been started in electronics products, fertilizers, and refined sugar. Agricultural production, which employs about a third of the workforce, is not sufficient to meet the country's food requirements. Iraq's chief crops include wheat, barley, rice, vegetables, dates (Iraq is one of the world's largest producers), and cotton. Cattle and sheep are also raised. Oil is the main export and food, medicine, and manufactures the main imports. The United States, Turkey, and Syria are the chief trading partners.
Iraq has been highly dependent on foreign economic aid in recent years, from both Western and Arab countries. The country also has a severe labor shortage. The Baghdad Railway , long an important means of communication, is declining in importance in favor of travel by road and air. There are international airports at Baghdad and Basra, and a state-owned airline operates within Iraq and abroad.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
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