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IRAQ

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 military strongmen ruled the country, the latest 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 resulted in the US-led invasion of Iraq in March 2003 and the ouster of the SADDAM Husayn regime. Coalition forces remain in Iraq, helping to restore degraded infrastructure and facilitating the establishment of a freely elected government, while simultaneously dealing with a robust insurgency. The Coalition Provisional Authority transferred sovereignty to the Iraqi Interim Government (IG) in June 2004. Iraqis voted on 30 January 2005 to elect a 275-member Transitional National Assembly and voted on 15 December 2005 to elect a 275-member Council of Representatives that will finalize a permanent constitution.

GOVERNMENT
chief of state: Iraqi Transitional Government (ITG) President Jalal TALABANI (since 6 April 2005); Deputy Presidents Adil Abd AL-MAHDI and Ghazi al-Ujayl al-YAWR (since 6 April 2005); note - the President and Deputy Presidents comprise the Presidency Council) head of government: Iraqi Transitional Government (ITG) Prime Minister Ibrahim al-JAFARI (since April 2005); Deputy Prime Ministers Rowsch SHAWAYS, Ahmad CHALABI, and Abid al-Mutlaq al-JABBURI (since May 2005) cabinet: 32 ministers appointed by the Presidency Council, plus Prime Minister Ibrahim al-JAFARI, Deputy Prime Ministers Rowsch SHAWAYS, Ahmad CHALABI, and Abid al-Mutlaq al-JABBURI elections: held 15 December 2005 to elect a 275-member Council of Representatives that will finalize a permanent constitution

ECONOMY
Iraq's economy is dominated by the oil sector, which has traditionally provided about 95% of foreign exchange earnings. Iraq's seizure of Kuwait in August 1990, subsequent international economic sanctions, and damage from military action by an international coalition beginning in January 1991 drastically reduced economic activity. Although government policies supporting large military and internal security forces and allocating resources to key supporters of the regime hurt the economy, implementation of the UN's oil-for-food program beginning in December 1996 helped improve conditions for the average Iraqi citizen. Iraq was allowed to export limited amounts of oil in exchange for food, medicine, and some infrastructure spare parts. In December 1999, the UN Security Council authorized Iraq to export under the program as much oil as required to meet humanitarian needs. Per capita food imports increased significantly, while medical supplies and health care services steadily improved. Per capita output and living standards were still well below the pre-1991 level, but any estimates have a wide range of error. The military victory of the US-led coalition in March-April 2003 resulted in the shutdown of much of the central economic administrative structure. Although a comparatively small amount of capital plant was damaged during the hostilities, looting, insurgent attacks, and sabotage have undermined efforts to rebuild the economy. Attacks on key economic facilities - especially oil pipelines and infrastructure - have prevented Iraq from reaching projected export volumes, but total government revenues have been higher than anticipated due to high oil prices. Despite political uncertainty, Iraq has established the institutions needed to implement economic policy, has successfully concluded a three-stage debt reduction agreement with the Paris Club, and is working toward a Standby Arrangement with the IMF. The Standby Arrangement would clear the way for continued debt relief from the Paris Club.

December 2007 NEWS

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