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| Iraq
Business |
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Economy
With proven deposits of over 110 billion barrels, about 10 % of
the total, Iraq has the world’s 2nd largest oil
reserves. Oil profits drove Iraq’s rapid
post war development until the end of the 1970's. However, the Iran
- Iraq war, which lasted from 1980 until 1988, brought Iraq’s
growth to a halt.
Now Iraq's United States led occupation has formerly ended and the
transferral of power to a new Iraqi government has been instigated,
perhaps a glimmer of economic optimism can be permitted, although
the situation remains dangerous and highly unstable. As reconstruction
progresses, the Iraq's economic momentum should recover, although
the scale of destruction and dilapidation is such that this continues
to be a lengthy process.
The agricultural sector by contrast fared relatively
well, at least during the early sanctions period as Iraq sought
to grow more food in order to reimburse the absence of imported
produce. However, light industry, which the government originally
promoted as part of an import replacement programme, operated far
below the levels of the 1980's. Meanwhile, the all significant oil
industry was constrained by limits imposed by the United Nation
sanctions.
However, the Iraqis gradually developed an extensive network of
smuggling routes and ‘illicit’ markets, indeed, the
scale of these was such that by 2001, the Iraqis announced that
they were no longer prepared to abide by the agreement with the
United Nations and withdrew entirely
from the international market.
There was no covering the decline which the Iraqi economy
had undergone, especially during the previous 10 years. Accurate
figures about the Iraqi economy are unavoidably hard to come by.
There were many bouts of hyperinflation during the 1990's, and the
Iraqi dinar lost 90 % of its value during the decade.
The economy contracted at an approximate average annual rate of
5 % during the same period. In 2002, inflation was 70 %, and the
economy contracted by 6.5 %. Iraq also has an immense external
debt in the region of US $200 billion, the majority
of which is owed to Kuwait and Saudi Arabia. Hopes that the economy
might grow in 2003 were dashed by both the coverage of the rehabilitation
needed by the oil industry and the consequences of the United States
led war against Iraq.
Gross Domestic
Products in 2004 was 21.8 % and inflation was 29.3
%. The rebuilding of electricity, oil and other production sources
is proceeding effectively. International donors have already pledged
more than $ 50 billion towards rebuilding Iraq.
Business
Official courtesies are common and expected. Visiting
cards are frequently exchanged and these are often printed in Arabic
and English. Meetings may not always be on a person
to person basis and it is often difficult to limit items to the
business in progress as many topics may be discussed in order to
assess the character of colleagues or traders.
Office
hours are Saturday to Wednesday from 8.00 am to
2.00 pm, Thursday 8.00 am to 1.00 pm. Friday is the weekly day of
rest when offices are likely to be closed.
Commercial
Information
The following associations can offer advice:
Federation of Iraqi Chambers of Commerce
Address: PO Box 11348, Mustansir Street, Baghdad
Telephone: (1) 888 8850
Facsimile: (1) 888 2305)
Baghdad Chamber of Commerce
Address: PO Box 24168 Almsarif, Baghdad Almustansir Street, Baghdad
Telephone: (1) 887 6211/1
Facsimile: (1) 887 9563). |
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