This occurred in part because of the industrialization and infrastructure development initiatives led by Saddam Hussein in the 1970s, which included irrigation projects, railway and highway construction, and rural electrification.

[17] In the 1980s, financial problems caused by massive expenditures in the Iran-Iraq War and damage to oil export facilities by Iran's military led the Ba'athist government to implement austerity measures, to borrow heavily, and to later reschedule foreign debt payments.

Oil exports gradually increased with the construction of new pipelines and restoration of damaged facilities, but again underwent a sharp decline after the Persian Gulf War.

The Coalition Provisional Authority made efforts to modernize the economy after the 2003 U.S.-led invasion, through privatization and reducing the country's foreign debt.

As a result Iraq's economy expanded rapidly during this time, though growth was stunted by the insurgency, civil war, economic mismanagement, and oil shortages caused by outdated technology.

An improved security environment and an initial wave of foreign investment helped to spur economic activity, particularly in the energy, construction, and retail sectors.

Broader economic improvement, long-term fiscal health, and sustained increases in the standard of living still depended on the government passing major policy reforms and the continued development of Iraq's massive oil reserves.

Although foreign investors viewed Iraq with increasing interest in 2010, most were still hampered by difficulties acquiring land for projects and other regulatory impediments.

It was believed to have one of the best education and health care systems in the Middle East, and thousands of migrant workers from Egypt, Somalia, and the Indian subcontinent were employed in construction projects.

For the first six six-month phases of the program, Iraq was allowed to export increasing amounts of oil in exchange for food, medicine, and other humanitarian goods.

In a December 2006 Newsweek International article, a study by Global Insight in London was reported to show "that Civil war or not, Iraq has an economy, and—mother of all surprises—it's doing remarkably well.

The Iraqi government responded by monopolizing grain and oilseed marketing, imposing production quotas, and instituting a Public Distribution System for basic foodstuffs.

By mid-1991, the government supplied a "basket" of foodstuffs that provided about one-third of the caloric daily requirement and cost consumers about five percent of its market value.

Kurdistan Region was described as "... a market economy essentially left alone by a fragile governing structure, but heavily influenced by substantial international humanitarian aid flows.

"[33] In December 1996, under an "Oil for Food Program" negotiated with the United Nations, Iraq started exporting petroleum and used the proceeds to import foodstuffs.

Because the government had neglected the production of forage crops, fruits, vegetables, and livestock other than poultry, those sectors were less buffeted by international affairs.

It awarded a contract for $120 million to the Louis Berger Group to promote Iraq's private sector, including agriculture.

Long-term plans call for investment in agricultural machinery and materials and more prolific crop varieties—improvements that did not reach Iraq's farmers under the Hussein regime.

The Agricultural Cooperative Bank, capitalized at nearly 1 G$ - by 1984, targets its low-interest, low-collateral loans to private farmers for mechanization, poultry projects, and orchard development.

Obstacles to agricultural development include labor shortages, inadequate management and maintenance, salinization, urban migration, and dislocations resulting from previous land reform and collectivization programs.

The decline in agricultural production after this period, created the need for importing 90 per cent of the food at a cost estimated at more than $12 billion annually.

The impact on natural resources results in an exploited and degraded environment leaving the land destitute and the people impoverished, unemployed [and] experiencing a sense of losing their human dignity.

Particularly affected are small scale farmers who, unable to withstand lower water levels, are forced to leave their lands in search of different ways to fulfill their livelihoods.

[43] Aside from hydrocarbons, Iraq's mining industry has been confined to extraction of relatively small amounts of phosphates (at Akashat), salt, and sulfur (near Mosul).

[48] Production has since recovered to pre-Gulf War levels, and most of Iraq's oil infrastructure has been repaired, despite persistent sabotage by the Islamic State (ISIL) and others.

The ongoing civil war, sabotage of transmission lines, and government corruption caused the electricity shortage to worsen: by 2010 demand outstripped supply by 6000 megawatts.

Because of the danger posed by Iraq's ongoing insurgency, the security industry has been a uniquely prosperous part of the services sector.

In the early post-Hussein period, a freewheeling retail trade in all types of commodities straddled the line between legitimate and illegitimate commerce, taking advantage of the lack of income tax and import controls.

[64] Under Saddam Hussein's reign, many of the highest-paid workers were employed by the greatly overstaffed government, whose overthrow disrupted the input of these people to the economy.

[66] In March 2022, Iran-Iraq trade reached a volume of 10 billion USD, as joint ventures increased significantly but were still limited due to sanctions against Iran.