World Grain - February 2012 - 22

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Key Facts
Capital: Baghdad Population: 30,399,572 (July 2011 est.) Religions: Muslim (official) 97% (Shia 60%-65%, Sunni 32%-37%), Christian or other 3%. Location: Middle East, bordering the Persian Gulf, between Iran and Kuwait. Government: Parliamentary democracy. Chief of State: President Jalal Talabani (since April 6, 2005); head of government: Prime Minister Nuri al-Maliki (since May 20, 2006). Economy: An improved security environment and an initial wave of foreign investment are helping to spur economic activity, particularly in the energy, construction and retail sectors. Broader economic improvement, long-term fiscal health, and sustained increases in the standard of living still depend on the government passing major policy reforms and on continued development of Iraq’s massive oil reserves. Although foreign investors viewed Iraq with increasing interest in 2010, most are still hampered by difficulties in acquiring land for projects and by other regulatory impediments. Iraq’s economy is dominated by the oil sector, which provides over 90% of government revenue and 80% of foreign exchange earnings. Since mid-2009, oil export earnings have returned to levels seen before Operation Iraqi Freedom and government revenues have rebounded, along with global oil prices. In 2011, Baghdad probably will increase oil exports above the current level of 1.9 million barrels per day as a result of new contracts with international oil companies, but is likely to fall short of the 2.4 million barrels per day it is forecasting in its budget. Iraq is making modest progress in building the institutions needed to implement economic policy. In 2010, Bagdad signed a new agreement with both the IMF and World Bank for conditional aid programs that will help strengthen Iraq’s economic institutions. Some reformminded leaders within the Iraqi government are seeking to pass laws to strengthen the economy. This legislation includes a package of laws to establish a modern legal framework for the oil sector and a mechanism to equitably divide oil revenues within the nation, although these and other important reforms are still under contentious and sporadic negotiation. Iraq’s recent contracts with major oil companies have the potential to greatly expand oil revenues, but Iraq will need to upgrade its oil processing, pipeline, and export infrastructure to enable these deals to reach their potential. The Government of Iraq is pursuing a strategy to gain additional foreign investment in Iraq’s economy. This includes an amendment to the National Investment Law, multiple international trade and investment events, as well as potential participation in joint ventures with state-owned enterprises. Provincial Councils also are using their own budgets to promote and facilitate investment at the local level. GDP per capita: $3,800 (2010 est.); inflation: 2.4% (2010 est.); unemployment 15.3% (2009 est.). Currency Iraqi dinar (IQD): 1,165 Iraqi dinars equal 1 U.S. dollar (Jan. 26, 2012). Exports: $51.76 billion (2010 est.): crude oil 84%, crude materials excluding fuels, food and live animals. Imports: $43.92 billion (2010 est.): food, medicine, manufactures. Major crops/agricultural products: Wheat, barley, rice, vegetables, dates, cotton; cattle, sheep, poultry. Agriculture: 9.7% of GDP and 21.6% of the labor force Internet: Code. .iq; 9 (2010) hosts and 325,000 (2009) users.
Source: CIA World Factbook

Focus on Iraq
Country making effort to increase wheat production 74% by 2015
by Chris Lyddon

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Years of dictatorship, war, UN sanctions and more war have left Iraq devastated, its people poor and its infrastructure battered. Feeding the population with basic grains is a struggle for the Iraqi government. The future, however, may be brighter as an expanding Iraq achieves hoped-for greater afﬂuence. The U.S. Department of Agriculture (USDA), in a general report on the processing sector, listed a series of woes that face the food industry: “the inability to compete with imported food from neighboring countries; instability; war; government mismanagement and difﬁculties; poor agriculture productivity and low output; low disposable income; shortage of electricity, water and raw materials.” However, the same report also pointed out the brighter prospects. “According to a Ministry of Planning report, the outlook for investment opportunities in Iraq should continue to improve in step with a strengthened security and a more normalized business environment,” it said. “Iraq’s population will boom, reaching about 40 million people by 2025, and perSyria haps as much as 50 million by 2035. Iran Included in this number is a growing Iraq population of young people whose consumption patterns will be similar to those found in the West.” “Iraq is in the midst of extraordinary Saudi Arabia changes both economically and politiKuwait cally,” the report said. “In spite of the many challenges to doing business in Iraq, American h ll and European companies have demonstrated considerable interest in Iraq.” Iraq’s wheat and maize production is too small to register in the reports of the International Grains Council (IGC). Its barley production is put at 1 million tonnes in 2011-12, down from 1.2 million the year before. The IGC puts total Iraqi grain imports in 2011-12 at 3.8 million tonnes, up from 3.4 million the previous year. Of that import
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World Grain - February 2012

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