The Decline of Iraq's Industrial Sector
Iraq's industrial sector has seen a drastic decline over the past three decades, shifting from a robust framework of heavy industries to a landscape dominated by small-scale manufacturing. This change is largely attributed to political instability, economic challenges, and rampant corruption that have plagued the country since the fall of the previous regime in 2003. Currently, small factories account for nearly 90% of the total number of factories in Iraq, indicating a significant weakening of the industrial base.
According to the Ministry of Industry and Minerals, there are approximately 227 factories linked to public sector companies, yet only 140 are operational. Alarmingly, around 18,167 industrial projects have ceased operations for various reasons. Engineer Abdul Hassan Al-Ziyadi, a member of the Iraqi Industries Federation, highlights that the previous regime's siege severely impacted the industrial landscape, and subsequent governments lacked the expertise to revitalize these sectors.
Al-Ziyadi emphasizes that the current government, led by Mohammed Shia al-Sudani, shows signs of change by adopting new projects aimed at rejuvenating the industrial sector.
Challenges and Opportunities for Iraqi Industry
Economic expert Nabil Jabbar Al-Tamimi elaborates on the challenges facing both public and private sector factories in Iraq. Before 2003, factories were divided into public and private sectors, with public factories experiencing significant deterioration in production capabilities. Following the regime change, many public sector factories were looted and neglected, while private sector factories struggled to compete with imported goods.
The industrial contribution to Iraq's GDP has plummeted to a mere 1-2%. However, recent governmental initiatives, such as the Local Product Protection Law and Consumer Protection Law, aim to revive the sector by imposing taxes on imports and banning certain products. Additionally, the government is fostering investment in vital industries, particularly pharmaceuticals, and is encouraging partnerships between the Military Industries Authority and the private sector.
These developments represent the initial steps toward revitalizing Iraq's industrial sector, with hopes that the government will continue to prioritize oil and petrochemical industries, leveraging Iraq's abundant natural resources to drive economic growth.
