So what of Iraq? This article can do little more than scratch the surface of the immense challenges that Iraq faces in trying to restore some semblance of health to its economy, and for that purpose I will limit myself to highlighting a few of the top level issues. There should be no dispute that the destruction of much of its infrastructure combined with the wholesale annihilation of Saddam Hussein’s security apparatus has proven to be a tactical misjudgement, which plunged the country into chaos, and exposing and exacerbating tensions between regions, as well as ethnic and religious groups, which Saddam’s regime had brutally repressed, and laid the seeds both for the emergence of ISIS, as well as Iran’s assertion of  country, and successive Baghdad governments. The war against and the defeat of ISIS (or perhaps that should be better termed the marginalization of ISIS) forged a degree of cohesion that was a sine qua non, if any sort of stability was, or rather is, ever to return to Iraq. The parliamentary elections in March did little to alter a very fractured political landscape, though the most under-discussed and very clear signal was that the voting population are  politics and the economy, a point which I will return to in conclusion.


Iraq’s agricultural sector is a sorry tale of woe, though the key observation is that the invasion and the war with ISIS exacerbated what were already very negative trends. In historical terms, agriculture was the second most important sector of the economy, obviously after oil and gas. As noted previously, it is very reliant on food and agricultural imports from Turkey and Iran. It is the comparison with Turkey that really highlights the dismal state of the sector at the current juncture. As a consequence of rapid urbanization, which was itself the consequence of chronic mismanagement by the Interior and Agricultural Ministries resulting in poverty and food insecurity escalating rapidly in rural communities, and thus rapidly depleting the sector’s skill base and workforce, agricultural yields


are estimated to be 50% to 75% lower than those in Turkey, and indeed Jordan. Indeed in the period between 1990 and 2009, Iraq’s crop production index fell by 17%, while Turkey rose by nearly 25% and the global average for middle income countries rose by 22%. The scope for a rapid expansion in the sector is all too obvious, but obviously highly contingent on a step shift improvement in security and infrastructure. In passing, Iraq ‘s oil sector does provide the counterfactual to the argument that the poor agricultural sector performance is  with crude production climbing from an average 2.0-2.2 Mln barrels in the late 1990s to mid-2000s to 4.36 Mln barrels in May 2018.


As with Syria, it is the woeful state of the power infrastructure that provides the biggest logistical (as opposed to political) headwind to improving the economic outlook. On the surface it might appear that installed power capacity has recovered rapidly, given that it collapsed from a prior peak of 9,300 MW in 1990 to just 3,300 MW in 2003 (post invasion), and stood at 13,000 MW in 2016. However demand has changed even more rapidly, having stood at 5,100 in 1990 and 6,400 in 2003, but has now climbed to 21,000 MW. Power availability remains limited, there are still frequent power cuts, and in many areas much too reliant on local generation, and has been made all the more complicated by large scale population displacement that has promulgated very acute power shortages and blackouts, above all in the Kurdistan region. As with agriculture, the need to attract foreign investment is crystal clear, above all given the fact that Iraq’s banks are very wary of lending to businesses, due to instability, while foreign investors are rightly fearful that money lent or invested to develop infrastructure will be 


6 | ADMISI - The Ghost In The Machine | July/August 2018


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