BY: Shatha kalel
The Iraqi economy has long faced numerous challenges, including political instability, the aftermath of conflict, and heavy reliance on oil exports. Despite these difficulties, the country is beginning to explore opportunities for diversification, with particular focus on revitalizing its industrial and agricultural sectors. Recent statements from Iraqi Prime Minister Mohammed Shia’ al-Sudani highlight the government’s commitment to supporting both public and private industries, with a special emphasis on encouraging young people to engage in these sectors. The first day of the new year has been designated as a pivotal moment in Iraq’s roadmap for economic growth, signaling a shift toward industrial and agricultural development.
The Current State of Iraq’s Economy
Iraq’s economy remains largely dependent on oil, which accounts for around 90% of government revenues. This reliance has created vulnerabilities, particularly in times of fluctuating oil prices or economic sanctions. However, Iraq’s government has recognized the need to diversify its economy to ensure sustainable growth and to provide employment opportunities beyond the oil sector.
In recent years, the country has made efforts to rebuild its industrial base and to reinvest in its agricultural sector, which has historically been a key component of Iraq’s economy. Although progress has been slow, the focus on developing these sectors is essential for achieving long-term economic stability and job creation.
The Role of Industry in Iraq’s Economy
The industrial sector in Iraq encompasses a wide range of activities, including manufacturing, construction, and energy production. Iraq’s industrial base, which was once one of the most robust in the region, was heavily damaged by decades of conflict, sanctions, and underinvestment. Many factories have fallen into disrepair, and Iraq’s manufacturing capacity has been limited.
However, the industrial sector has the potential to be a cornerstone of economic diversification. Prime Minister al-Sudani’s statements reflect the government’s determination to restore and expand Iraq’s industrial capabilities. The focus is on encouraging both public and private investments in industries such as construction, cement, chemicals, and textiles. With its relatively young population, Iraq has the opportunity to harness the energy and talent of its workforce to revive industries and create jobs.
The Agricultural Sector: A Key Pillar for Sustainability
Agriculture has traditionally been a significant part of Iraq’s economy. Fertile land, particularly in the Tigris and Euphrates river valleys, makes Iraq ideal for agricultural production. Yet, the sector has been neglected for many years due to political instability, water scarcity, and underinvestment in modern agricultural techniques.
Iraq was once known as the “breadbasket” of the Middle East, producing abundant grains, fruits, and vegetables. However, following years of conflict, drought, and the drain of rural populations to urban centers, Iraq now faces challenges in achieving food security and self-sufficiency. Prime Minister al-Sudani has acknowledged these difficulties and stressed the importance of revitalizing Iraq’s agricultural sector.
In his recent statements, the Prime Minister outlined a vision for agricultural development, including the use of modern technologies and irrigation systems to improve yields, as well as encouraging young people to pursue careers in farming and agribusiness. Agriculture is seen as a critical sector for reducing Iraq’s dependence on oil, providing employment, and ensuring food security.
The New Year’s Day Declaration: A Roadmap for the Future
Prime Minister al-Sudani’s declaration that the first day of the new year is to be dedicated to supporting Iraq’s industries reflects a strategic turning point in the country’s economic policies. According to the Prime Minister, this day marks the beginning of a long-term roadmap for Iraq’s economic development. The Prime Minister has called on all ministries to align their strategies with this vision, ensuring that efforts across the government are coordinated to foster industrial growth and job creation.
The focus on the first day of the new year is symbolic, signaling a fresh start for Iraq’s economic recovery and growth. Al-Sudani emphasized that this day should not merely be a ceremonial occasion but a day to take concrete steps toward supporting industries, particularly in the public and private sectors. The government plans to invest in infrastructure projects, provide financial support for small and medium-sized enterprises (SMEs), and create incentives for private companies to invest in industrial activities.
The Prime Minister also underscored the importance of encouraging youth to enter the industrial and agricultural sectors, which are seen as essential for the country’s long-term prosperity. This effort to harness the potential of Iraq’s young population is vital, as youth unemployment has long been a challenge in the country. By creating new opportunities in sectors outside of oil, the government hopes to foster economic resilience and reduce dependence on the oil industry.
The Path Forward: Challenges and Opportunities
The road to industrial and agricultural revitalization in Iraq is fraught with challenges. The country faces issues such as insufficient infrastructure, limited access to finance, political corruption, and the ongoing effects of climate change on agricultural production. However, there are opportunities for growth, particularly with the right mix of public policy, private investment, and the engagement of Iraq’s youth.
The government’s vision for the future is one of diversification, where industries outside of oil can provide sustainable growth and job opportunities. The Prime Minister’s call for a comprehensive, coordinated approach across ministries is a step in the right direction, as it underscores the need for a whole-of-government approach to economic development.
Conclusion
The Iraqi economy is at a crossroads. While the country’s reliance on oil has created significant wealth, it also presents challenges in terms of sustainability and resilience. The focus on industrial and agricultural sectors, as outlined by Prime Minister al-Sudani, offers hope for a more diversified and stable economic future.
The declaration that the first day of the new year will be dedicated to supporting industries and encouraging youth participation in the workforce signals a new beginning for Iraq. By focusing on these critical sectors, the government aims to create a more self-sufficient economy, reduce unemployment, and ensure sustainable growth for future generations.
In the coming years, Iraq’s success will depend on its ability to implement these ambitious plans, address existing challenges, and leverage the potential of its industries and young population. If successful, Iraq could emerge as a more diversified economy,
less dependent on oil, and more capable of providing economic opportunities for all its citizens.
Economic Unit/North America Office
Al Rawabet Center for Research and Strategic Studies