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Iraq: Economy
From Grolier's The New Book of Knowledge
Iraqi oil worker Aiad Saad, 38, checks equipment at the Kirkuk oil refinery northeast of Baghdad. (Photo: Jassim Mohammed/AP/WideWorld)
Iraq is chiefly an agricultural country, but the development of its oil reserves in the latter half of the 1900s transformed the economy. In 1960, Iraq became a founding member of the Organization of Petroleum Exporting Countries (OPEC).

Oil is Iraq’s chief export and source of income. Since the 1990s, however, revenues have been severely reduced due to economic sanctions imposed by the international community in response to Iraq’s continued military aggression.

Services. Services account for approximately 50 percent of Iraq’s economy and employs nearly half its workforce. Government and banking are the two strongest segments of the service industries.

Manufacturing. The extraction and refining of oil is Iraq’s chief industry. Other industries include the manufacture of chemicals, textiles, construction materials, and processed foods.

Agriculture. Modern farming methods and irrigation have greatly increased Iraq’s agricultural production. Barley and wheat are the chief cereal grains. Rice is grown in the south, where water for irrigation is abundant. Iraq is the world’s largest producer of dates, the chief export crop. Cotton, sugarcane, and sugar beets also have significant commercial value.

Livestock are also an important part of Iraq’s agricultural economy. Camels, sheep, and goats are raised in many parts of the country. Cattle are grazed in irrigated areas. Wool and animal hides are exported, and milk and meat are produced for local consumption.

Transportation. Iraq’s public transportation networks are owned by the Iraqi government. Roads, railways, and one airline connect most major cities. Most people in rural areas, however, rely on bicycles or animals for transportation. Pipelines are used to transport oil and natural gas.

Communication. Six daily newspapers are published in Iraq—four in Arabic, one in Kurdish, and one in English. The country has limited television and radio networks, and all are controlled by the government.

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