Iraq's economy is growing on the back of relatively increased stability and reconstruction projects and most importantly, increased oil output. The economy however remains hampered by corruption and violence. The United States Department of State has produced this fact sheet for those eying business in Iraq
Iraq today is emerging from years of civil conflict and economic isolation, and has the potential to again become what it was not so long ago: a prosperous country with a thriving middle class. Iraq is a market with tremendous potential.
In recent years, there are a number of tangible signs that Iraq’s economy is stabilizing and expanding:
The economic sectors in Iraq with the greatest investment potential include: energy, including both hydrocarbons and the electrical power sector; infrastructure such as architecture, construction, and engineering and transportation; information and communications technology; health such as medical technology, pharmaceuticals, biotechnology, and health care services; and agribusiness.
Despite progress toward fundamental reforms of the economy and legal system, the legacy of central planning also continues to inhibit economic diversification and development. Additionally, potential investors face high security costs; regulations can be cumbersome and confusing; some Iraqi government contracts face payment delays; corruption continues to hamper trade and investment; and dispute resolution mechanisms can be sometimes unreliable and non-transparent. The Iraqi government made serious efforts to address these challenges. Continued reform efforts will take time, but tangible progress includes the following:
Since 2003, the United States has been an active partner to help Iraqis strengthen their democracy, build civil society, improve security, and re-integrate fully into the regional and global community and economy. Since 2009, we have worked through the U.S.-Iraq Strategic Framework Agreement to boost this partnership.
The U.S. government has engaged regularly with the Iraqi government to promote growth and reform in multiple sectors of Iraq’s economy. The Embassy’s economic and commercial officers work closely with their counterparts in other U.S. government agencies and with Iraqi government officials and private sector representatives to improve the institutional capacity and regulatory framework in Iraq. Additionally, OPIC and ExIm are both open for business in Iraq. OPIC has already committed over $150 million in financing in Iraq, and ExIm has been approached by several project developers, exporters and financial institutions to discuss transactions in power projects, real-estate development, manufacturing and agriculture. Garnering interest among the business community to apply for ExIm Bank financing is one of the bank’s most important objectives in 2011.