Iraq – The market
Iraq is undergoing rapid reconstruction with the help of the international community
After a long period of political instability, Iraq is now hoping for rapid reconstruction. Foreign state donors, but above all private investors, should make a significant contribution. Together with the World Bank and the International Monetary Fund, Iraq is working on economic reforms.
88 billion US dollars required for Iraq's reconstruction
Iraq's government has conducted a needs assessment with the World Bank. This means that USD 88 billion is needed to finance the reconstruction. At the Iraq Reconstruction Conference held in Kuwait in February 2018, Iraq's NIC National Investment Commission informed about possible projects. Government representatives from over 70 countries, non-governmental organisations and almost 2,000 Iraqi and foreign entrepreneurs took part.
Prospective foreign aid of US$ 30 billion
At the conference, non-governmental organizations pledged US$330 million in aid. Government donors have a total of US$30 billion in prospect. Turkey plans to provide loans of US$5 billion, Kuwait US$2 billion and Qatar US$1 billion. The USA intends to support Iraq projects of American companies with financing of US$ 3 billion. The EU wants to provide services worth 400 million euros. Iran, an important player in Iraq not only politically but also economically, declared in March to make loans available amounting to 2.5 billion euros.
Economic data Iraq
- 40 million (2019)
- 58% younger than 25
- one of the three most populous countries in the Arab world, after Egypt and on an equal footing with Algeria
- ranks fourth globally of countries with the most natural resources
- large deposits of crude oil, natural gas, phosphates and Sulphur
- economy based on the export of its natural resources and on agriculture
- extremely high trade surplus (US$ 48.4bn in 2018, expected US$ 41bn in 2019)
- public investment programs improve infrastructure and offer chances for supply
- oil and gas production to be enlarged
- funding of large-scale projects state guaranteed
- considerable market for capital and consumer goods
- financial strength, young population
- agrarian: wheat, barley, rice, vegetables, dates, cotton, cattle, sheep, poultry
- mineral: crude oil, natural gas, phosphates, sulphur
Currency reserves without gold (billion US$):
- 2015: 54
- 2016: 45
- 2017: 41
- 2018: 41
Source: GTAI Germany Trade & Invest
General information Iraq
Iraq is a founding member of the UN as well as of the Arab League, OICOrganization of Islamic Cooperation, Non-Aligned Movement and the IMF. It is a federal parliamentary republic consisting of 19 governorates (provinces) and one autonomous region (Iraqi Kurdistan). The country's official religion is Islam. Culturally, Iraq has a very rich heritage and celebrates the achievements of its past in pre-Islamic times and is known for its poets. Its painters and sculptors are among the best in the Arab world, some of them being world-class as well as producing fine handicrafts, including rugs and carpets.
Iraq in the 20th and 21st century
The country today known as Iraq was a region of the Ottoman Empire until the partition of the Ottoman Empire in the 20th century. It was made up of three provinces, called vilayets in the Ottoman language: Mosul Vilayet, Baghdad Vilayet, and Basra Vilayet.
In April 1920 the British Mandate of Mesopotamia was created under the authority of the League of Nations. A British-backed monarchy joining these vilayets into one Kingdom was established in 1921 under Faisal I of Iraq. The Hashemite Kingdom of Iraq gained independence from the UK in 1932. In 1958, the monarchy was overthrown and the Iraqi Republic created.
Iraq was controlled by the Arab Socialist Ba'ath Party from 1968 until 2003. After an invasion by the United States and its allies in 2003, Saddam Hussein's Ba'ath Party was removed from power, and multi-party parliamentary elections were held in 2005. The US presence in Iraq ended in 2011.
2012 March - Tight security for Arab League summit in Baghdad. It is the first major summit to be held in Iraq since the fall of Saddam Hussein.
2012 April - Oil exports from Iraqi Kurdistan halted amid row with central government over contracts with foreign firms.
- 2014 September - Shia politician Haider al-Abad forms a broad-based government including Sunni Arabs and Kurds. Kurdish leadership agrees to put independence referendum on hold.
US announces new forward strategy against Islamic State, carries out air raids in support of Iraqi Army near Baghdad. International conference in Paris, including ten Sunni Arab states but excluding Iran and Syria, agrees to support strategy.
- 2014 December - The Iraqi government and the leadership of the Kurdish Region sign a deal on sharing Iraq's oil wealth and military resources, amid hopes that the agreement will help to reunite the country in the face of the common threat represented by Islamic State.
- 2015 March - Islamic State destroys Assyrian archaeological sites of Nimrud and Hatra.
Offensive against Islamic State
- 2015-2016 - Government and Islamic State forces fight for control of Tikrit and Anbar Province.
- 2016 April - Supporters of cleric Moqtada al-Sadr storm parliament building demanding new government to fight corruption and end allocation of government posts along sectarian lines.
- 2016 November - Parliament recognises the Shia Popular Mobilisation Units (PMU) militia as part of the armed forces with full legal status.
- 2017 September - Kurds back independence in illegal referendum staged by Kurdish regional government. Baghdad imposes punitive measures.
- 2017 November - Government forces with Shia and Kurdish allies drive Islamic State out of all but a few redoubts.
Army offensive drives back Kurdish forces in a move aimed at halting the regional government's moves towards an independent Kurdistan.
- 2018 February - Iraq Reconstruction Conference in Kuwait. Commitment of 30 billion US$ in reconstruction aid for Iraq. At the conference, the donor countries showed massive support. Government representatives from over 70 countries as well as NGO’s and almost 2,000 Iraqi and foreign companies were represented.
May - Parliamentary elections. The political bloc of Shia cleric Moqtada al-Sadr wins most votes.
Market place Iraq
Iraq is characterised by great cultural, political and economic diversity, which can make an economic commitment in Iraq attractive and profitable. Iraq is essentially divided into the central Iraq with the capital Baghdad with its approximately 8 million inhabitants and the northern Iraqi autonomous region Kurdistan with the capital Erbil (860,000 inhabitants). Iraq is best known for its abundance of natural resources, especially oil exports.
At present, the Iraqi government is trying to lead its own economy away from its great dependence on oil and to do the same as the "pioneering nations" of the Gulf region in terms of diversification. At the same time, however, oil production is also to be expanded. In the areas of transport, IT and energy infrastructure as well as the oil and gas industry, there has been enormous interest in modernisation for many years.
International exporting companies can benefit from the current situation and demand in Iraq by entering and developing this growth market early and ahead of others. The most important export goods to Iraq for German companies are currently machinery and equipment, food, pharmaceuticals, electrical engineering and measurement and control technology as well as motor vehicles.
Source: German Liaison Office for Industry and Commerce in Iraq