Type: Economics
Pages: 4 | Words: 926
Reading Time: 4 Minutes

The economy of Iraq has depended on oil production and export for a very long period, and the oil sector provides 90% of the foreign exchange revenue.

The Iran-Iraq war has depleted foreign exchange reserve and devastated the economy, which caused the foreign debt to grow to 40 billion USD. The end of 1980, however, marked the period of new oil pipeline construction, restoration of the old ones, and consequent oil export increase. The Kuwait invasion and international sanctions against the country led to the economy decline again (Iraq: Economy, n. d.). The United Nations Organization initiated the Oil-for-Food program (OFF), which was designed as a temporary step to remedy the situation for the Iraqi citizens. Under the program, every 90 days the world countries were allowed to buy petroleum products and petroleum itself, $1 billion worth, from Iraq in exchange for the medicaments, provision, and other essential products (Luft, 2005).

In few years, the world economic crisis caused economical slowdown again, although during 2001- 2002, food import in the country and healthcare greatly improved. However, following the military actions, carried by the U.S.-coordinated coalition, caused disruption to the central economic administrative structure. Later on, the restoration of the oil utilities and infrastructure has progressed steadily, although the attacks on the most important economic facilities and insurgents were numerous and damaged the under-maintained web of pipelines. Sabotage of oil production and export resulted in loss of $7 billion in 2004 alone (Luft, 2005). Today, economical laws and institutions essential for economic policies implementation are being designed and established, with the plan to increase oil production and export capacity dramatically; however, to become the leading oil producing country, a secure environment must be maintained with investments into infrastructure and strengthening of the government (Luft, 2005).

Since 2003, the foreign community pledged to assist the reconstruction of Iraq and give its economy financial assistance. The UN and World Bank initiated the International Reconstruction Fund Facility for Iraq (IRFFI). The distribution of the assistant help is conducted through the IRFFI and other sources. Since 2003, the US foreign assistance has totaled $58 billion, which was used for reconstruction and security; however, recently, the focus shifted to the technical assistance and capacity building.

The involvement of the IMF and World Bank in assisting the reconstruction of Iraq is wide; the two organizations have been working with the Iraqi government closely since 2003. In 2012, both organizations approved programs to help the Iraqi government strengthen economic stability and decrease its vulnerability to global oil market changing currents (Iraq: Economy, n.d.).

One way of managing crisis is through privatization of the oil industry. It will involve the introduction of the new pricing system; as a result, many citizens will not be able to buy fuel. However, the step will prove to be positive if the privatization is introduced gradually and specialized programs for aiding the low-income Iraqis are employed. Overall privatization would mean increased revenue for the economy, as well as high living standards for citizens. (Luft, 2005).

However, the privatization is also hindered by the Iraqi lawmakers’ lack of confidence in this innovation; therefore, privatization legislation still awaits ratification by the parliament. In addition, privatization is unlikely to touch many industries. Although legislation is slow to come, there is some progress in developing collaboration with foreign companies; for example, Iraq prepares for its entry into the World Trade Organization (Abbas, 2009).

When the American administrators assumed the responsibilities of managing the health system in Iraq, they realized the level of neglect and devastation of the civil infrastructure. While the Iraqi administration showed initiative and motivation to rebuild the decaying system, they possessed almost no experience and knowledge of health systems besides the U.S. healthcare. Because of the fact, the American sample of healthcare services was imposed, with the reluctant attitude to cooperation with organizations on both local and worldwide scales.

One of the main concerns of healthcare in Iraq today is security. Doctors work in a crime-riddled society where their lives are threatened on a daily basis, for example, hospitals are raided, and ambulances are blocked. Another negative influence is the lack of the well-trained specialists in many regions. Because of the work conditions and security factor, over 8000 doctors have left Iraq since 2003 (Jabbour et al., 2012).

Iraq pays a lot of attention and finances to welfare. This has been especially tangible after the war. Large funds were appropriated by the government to the families of the war dead; considerable subsidies were intended for young, motivated men who would take part in volunteer service. A family, which had suffered the loss of a sibling, was able to receive extremely generous governmental financial aid, as well as favorable terms of getting credits, loans, and real estate deals.

The education system in Iraq has been growing rapidly. There are many scientists and quite a number of skilled workers. Unfortunately, not many stay and work for the benefits of the country, because of civil unrest and the security situation. An important factor of civil unrest is the education system. University education is unaffordable for the poorer classes, which means they serve multiple tours in the army while the government allows students to study. So the two sides of the situation are inversely correlated and mutually dependent. (Metz, 2004).

In conclusion, although Iraqi economy is still developing and needs attention, the country is well on its way to become a leading oil producer and exporter. The country also has the potential to form a socially warm climate within its borders; however, it needs to pay attention to the development of education and healthcare sectors.

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