Economy

Iraq is predominatly an agricultural country.

The modern Iraqi economy is largely based on petroleum, and most of the few large manufacturing industries have to do with oil. Agriculture is the mainstay of the population, and dates are the chief export crop. Most economic institutions are either owned or controlled by the government. Virtually all sectors of the economy suffered as a result of Iraq's war with Iran during the 1980s, which left Iraq with a foreign debt exceeding $75 billion, much of it owed to Kuwait and Saudi Arabia. The economy was further devastated by the trade embargo imposed by the United Nations (UN) after the invasion of Kuwait in 1990 and by the Persian Gulf War in 1991. The annual budget in the early 1990s balanced at $13.9 billion in both revenues and expenditures.

Iraq is predominantly an agricultural country. Approximately 13 percent of the land is under cultivation, although it is estimated that about 50 percent of the total available land is arable. Most farmland is in the region of the Tigris and Euphrates rivers. Annual agricultural production in the early 1990s included about 1.5 million metric tons of wheat, 768,000 metric tons of barley, and 189,000 metric tons of rice. Date production totaled about 566,000 metric tons annually, and date exports from Iraq account for a major share of world trade in the commodity. Other fruits produced include apples, figs, grapes, olives, oranges, pears, and pomegranates. Livestock raising is an important occupation for Iraq's nomadic and seminomadic tribes. In the early 1990s the livestock population included about 1.4 million cattle, 9 million sheep, 1.5 million goats, and 50 million chickens. In addition, the world-famous Arabian horse is extensively bred.

Iraq has a small fishing industry. In the early 1990s about 12,000 metric tons of fish were caught each year. About three-fourths of the catch was comprised of freshwater species.

Petroleum is the most important natural resource of Iraq. The oil fields are located in three main regions: around the Persian Gulf, near Al Basrah; in the north-central part of the country, near Mosul and Kirkuk; and in the east-central part of Iraq, near the town of Khanaqėn. Small deposits of various other minerals are found, principally ores of iron, gold, lead, copper, silver, platinum, and zinc. Phosphates, sulfur, salt, and gypsum are fairly abundant, and seams of brown coal are numerous. The most valuable industry in Iraq is the production of petroleum and natural gas for export and domestic consumption. Until the early 1970s four foreign-owned companies controlled the Iraqi petroleum industry. The two leading firms were the Iraq Petroleum Company, which held concessions in the north, around Kirkuk and Mosul, and the Basra Petroleum Company, which operated in the southeast, near Al Basrah. From 1972 to 1975 all the foreign oil companies were fully nationalized by the government, and their operations were taken over by the Iraq National Oil Company and the Northern Petroleum Organization. Refineries are located at Baghdad, Al Basrah, Hadėthah, Khanaqėn, Kirkuk, and Al Qayyarah. A plant for producing liquid natural gas is situated at At Tajė, near Baghdad. Falling oil prices and the war with Iran severely hampered the petroleum industry during the 1980s. The industry was dealt another crippling blow in 1990, when Iraq invaded Kuwait and the United Nations responded with an embargo on Iraqi oil. Limited amounts of oil began to be exported again at the end of 1996. About 187 million barrels of petroleum and 3.2 billion cu m (113 billion cu ft) of natural gas were produced annually in the early 1990s.

Manufacturing is not well developed. Besides petroleum and natural-gas products, manufactures are largely limited to such goods as processed food, textiles and clothing, footwear, cigarettes, and construction materials. Baghdad is the leading manufacturing center of Iraq.

Annual production of electricity in the early 1990s was about 12.9 million kilowatt-hours. More than 95 percent of the electricity was generated in thermal installations. Hydroelectric facilities operate on the Tigris River and some of its tributaries.

The monetary unit is the Iraqi dinar, consisting of 1000 fil or 20 dirham (3.21 dinars equals U.S.$1; fixed rate). Currency is issued by the Central Bank of Iraq. All banks in Iraq were nationalized in 1964.

Before the United Nations (UN) imposed a trade embargo on Iraq following Iraq's invasion of Kuwait in 1990, annual exports were estimated at $10.4 billion and imports at about $6.6 billion. Petroleum sales accounted for almost all the earnings; other exports were dates, raw wool, and hides and skins. Leading imports were machinery, transportation equipment, foodstuffs, and pharmaceuticals. Iraq's main trade partners were Brazil, Turkey, Japan, Germany, France, Italy, Great Britain, and the United States.