Formerly part of the Ottoman Empire Iraq was occupied by Britain during the course of World War I; in 1920 it was declared a League of Nations mandate under UK administration. In stages over the next dozen years Iraq attained its independence as a kingdom in 1932. A 'republic' was proclaimed in 1958 but in actuality a series of strongmen ruled the country until 2003. The last was SADDAM Husayn. Territorial disputes with Iran led to an inconclusive and costly eight-year war (1980-88). In August 1990 Iraq seized Kuwait but was expelled by US-led UN coalition forces during the Gulf War of January-February 1991. Following Kuwait's liberation the UN Security Council (UNSC) required Iraq to scrap all weapons of mass destruction and long-range missiles and to allow UN verification inspections. Continued Iraqi noncompliance with UNSC resolutions over a period of 12 years led to the US-led invasion of Iraq in March 2003 and the ouster of the SADDAM Husayn regime. US forces remained in Iraq under a UNSC mandate through 2009 and under a bilateral security agreement thereafter helping to provide security and to train and mentor Iraqi security forces.
In October 2005 Iraqis approved a constitution in a national referendum and pursuant to this document elected a 275-member Council of Representatives (COR) in December 2005. The COR approved most cabinet ministers in May 2006 marking the transition to Iraq's first constitutional government in nearly a half century. Nearly nine years after the start of the Second Gulf War in Iraq US military operations there ended in mid-December 2011. In January 2009 and April 2013 Iraq held elections for provincial councils in all governorates except for the three comprising the Kurdistan Regional Government and Kirkuk Governorate. Iraq held a national legislative election in March 2010 - choosing 325 legislators in an expanded COR - and after nine months of deadlock the COR approved the new government in December 2010. In April 2014 Iraq held a national legislative election and expanded the COR to 328 legislators. Prime Minister Nuri al-MALIKI dropped his bid for a third term in office enabling new Prime Minister Haydar al-ABADI a Shia Muslim from Baghdad to win parliamentary approval of his new cabinet in September 2014. Since early 2015 Iraq has been engaged in a military campaign against the Islamic State of Iraq and the Levant (ISIL) to recapture territory lost in the western and northern portion of the country.

arable land: 8.4%
permanent crops: 0.5%
permanent pasture: 9.2%

urban: 93.8% of population
rural: 70.1% of population
total: 86.6% of population
urban: 6.1% of population
rural: 31.5% of population
total: 14.6% of population (2015 est.)

urban: 86.4% of population
rural: 83.8% of population
total: 85.6% of population
urban: 13.6% of population
rural: 16.2% of population
total: 14.4% of population (2015 est.)

Sadrist Movement or Ahrar Bloc [Muqtada al-SADR]
State of Law Coalition [Vice President Nuri al MALIKI]
Unites for Reform Coalition/Muttahidun [Vice President Usama al-NUJAYFI]

During 2015 worsening security and financial stability throughout Iraq - driven by an ongoing insurgency decreasing oil prices and political upheaval - decreased prospects for improving the country's economic environment and securing much-needed foreign investment. Long-term fiscal health a strengthened investment climate and sustained improvements in the overall standard of living still depend on a rebound in global oil prices the central government passing major policy reforms and finishing the conflict with ISIL.
Iraq's largely state-run economy is dominated by the oil sector which provides more than 90% of government revenue and 80% of foreign exchange earnings. Oil exports in 2015 averaged 3.0 million barrels per day up from 2014 but a failed revenue- and oil-sharing agreement with the Iraqi Kurdistan Region's (IKR) autonomous Kurdistan Regional Government (KRG) resulted in a loss of exports from northern oil fields. Moreover falling global oil prices resulted in declining export revenues. Iraq's contracts with major oil companies have the potential to further expand oil exports and revenues but Iraq will need to make significant upgrades to its oil processing pipeline and export infrastructure to enable these deals to reach their economic potential. The IKR's autonomous KRG passed its own oil law in 2007 and has directly signed about 50 contracts to develop IKR energy reserves. The federal government has disputed the legal authority of the KRG to conclude most of these contracts some of which are also in areas with unresolved administrative boundaries in dispute between the federal and regional government. In December 2014 the federal government and the KRG agreed to sell oil exports from Kurdish-controlled oilfields under the federal oil ministry in exchange for the central government paying $1 billion to the Kurdish Peshmerga forces and resuming budget transfers to the KRG that amount to 17% of Iraq's national budget. However that deal fell apart in 2015.
Iraq is making slow progress enacting laws and developing the institutions needed to implement economic policy and political reforms are still needed to assuage investors' concerns regarding the uncertain business climate. The Government of Iraq is eager to attract additional foreign direct investment but it faces a number of obstacles including a tenuous political system and concerns about security and societal stability. Rampant corruption outdated infrastructure insufficient essential services skilled labor shortages and antiquated commercial laws stifle investment and continue to constrain growth of private nonoil sectors. Under the Iraqi constitution some competencies relevant to the overall investment climate are either shared by the federal government and the regions or are devolved entirely to local governments. Investment in the IKR operates within the framework of the Kurdistan Region Investment Law (Law 4 of 2006) and the Kurdistan Board of Investment which is designed to provide incentives to help economic development in areas under the authority of the KRG.
Inflation has remained under control since 2006. However Iraqi leaders remain hard-pressed to translate macroeconomic gains into an improved standard of living for the Iraqi populace. Unemployment remains a problem throughout the country despite a bloated public sector. Encouraging private enterprise through deregulation would make it easier for Iraqi citizens and foreign investors to start new businesses. Rooting out corruption and implementing reforms - such as restructuring banks and developing the private sector - would be important steps in this direction.

$544.1 billion (2015 est.)
$531.4 billion (2014 est.)
$542.9 billion (2013 est.)

2.4% (2015 est.)
-2.1% (2014 est.)
6.6% (2013 est.)

$15,500 (2015 est.)
$15,500 (2014 est.)
$16,200 (2013 est.)

15% of GDP (2015 est.)
11.4% of GDP (2014 est.)
10% of GDP (2013 est.)

16% (2012 est.)
15% (2010 est.)

1.4% (2015 est.)
2.2% (2014 est.)

6% (December 2012)
6% (December 2011)

6% (31 December 2015 est.)
6% (31 December 2014 est.)

$55.36 billion (31 December 2015 est.)
$62.34 billion (31 December 2014 est.)

$80.83 billion (31 December 2015 est.)
$78.65 billion (31 December 2014 est.)

$1.773 million (31 December 2015 est.)
$-718,800 (31 December 2014 est.)

$4 billion (9 December 2011)
$2.6 billion (31 July 2010)
$2 billion (31 July 2009 est.)

-$10.82 billion (2015 est.)
-$1.732 billion (2014 est.)

$54.67 billion (2015 est.)
$83.98 billion (2014 est.)

$43.84 billion (2015 est.)
$45.2 billion (2014 est.)

$54.06 billion (31 December 2015 est.)
$66.35 billion (31 December 2014 est.)

$60.28 billion (31 December 2015 est.)
$58.14 billion (31 December 2014 est.)

Iraqi dinars (IQD) per US dollar -
1167.6 (2015 est.)
1166 (2014 est.)
1213.72 (2013 est.)
1166.17 (2012 est.)
1170 (2011 est.)

8.7% of GDP (2014)
3.4% of GDP (2013)
2.88% of GDP (2012)
3.27% of GDP (2011)
2.88% of GDP (2010)