State and prospects of the Iraqi economy and foreign economic relations

Abstract

The article examines the causes of the current economic crisis in Iraq. Heavy dependence of Iraq’s economy on oil continues to have a huge impact on its socio-economic situation. Despite the fact that the Republic of Iraq was the sixth producer of crude oil and the third exporter of liquid fuels in the world in the 2010s, its poverty rate was one of the highest among the upper middleincome countries, according to the World Bank. Sharp fluctuations in global oil prices and as a consequence lower oil revenues revealed the need for economic diversification and structural reforms in order to reduce dramatically the dependence of the Iraqi economy on oil. Therefore, the author analyzes the prospects for the non-oil industries and the private sector that might help to overcome the current crises. Besides, special attention is paid to the priority areas of economic diversification in Iraq (for example, agriculture and food industries; foreign trade reforms). Improving the investment climate, revising the legislative and regulatory framework for foreign economic ties would expand trade and investment cooperation between Russia and Iraq that corresponds to the short and long-term economic interests of both countries.