Major Obstacles in the Economic Development of Iraq Essay

Major Obstacles in the Economic Development of Iraq - Essay Example Thirty years of economic destruction has left the country devastated. Iraq is very rich in the energy sector and it also benefits from having amongst the lowest production costs in the world (Grose, 2012). However, obstacles in the economic development are many and include a tenuous political system, concerns about security and societal stability, rampant corruption, outdated infrastructure, insufficient essential services, skilled labor shortages, and outdated commercial laws (Index Mundi, 2013). All of these factors have continued to stifle growth even in the non-oil private sectors. In fact, if the situation does not improve and if Iraq fails to overcome the obstacles in its path, the world economy may suffer, according to the International Energy Agency (IEA), an independent organization that was founded during the Arab oil embargo in the 1970s (Grose, 2012). The country is currently undergoing widespread uncoordinated institutional change. The pre-war socialist structure is turn ing into a market economy but the progress and planning is uneven (Gunter, 2012). However, the obstacles to the economic growth of Iraq is linked to its past and a review of the past occurrences would help evaluate the obstacles to economic development. Iraq has been suffering for decades as a result of long war with Iran (1980-88), two Gulf wars with the United States (1991 and 2003), and almost a decade of harsh international sanctions between these two wars which resulted on economic toll. Prior to this, the British forces had invaded Iraq in 1918 but a rebellion in June 1920 against the colonial power resulted in a new political project for the country when a new Iraqi cabinet was formed under the leadership of Faisal (Alnasrawi, 2000). The early nationalists continued to be under the patronage of Britain and France. The colonial power created a new class of landowners aimed at harnessing backing for the monarchy. However, the social classes had undergone major changes by the ti me the World War II came to an end. Saddam Hussein assumed offices as the President of Iraq and as the Chairman of Revolutionary Command Council in 1979. Following this, the Iran-Iraq war from 1980-88 severely devastated the economy of Iraq (Infoplease, 2013). While the country took pride in having the largest military establishment in the Gulf region, Iraq was left with huge debts and opposition from the Kurdish from the northern provinces of Iraq. Covert action from the US such as support for a Kurdish rebellion in Northern Iraq and supplies of arms to Iran during the Iraq-Iran war changed Saddam’s perception of the world and Brands (2011) argues that perhaps that led Saddam towards conspiratorial thinking. Covert initiatives from the US occurred at a time of great vulnerability for Iraq which posed a threat to its government. US aid during the 1970s helped sustain a separatist movement against the Baathist regime. In the 1980s, the US empowered Iran in trying to ouster the Saddam government in Iraq. Such covert actions led to a hostile perception of the United States as far as Saddam was concerned (Brands, 2011). The government used weapons of mass destruction on civilian targets, which only worsened the situation. Iraq was expelled from Kuwait in 1991 by a US led coalition under the UN’s resolution. Whenever the Kurds from the north and the Shi’a Muslims from the south rebelled, the government retaliated by killing thousands. The UN Security Council prevailed upon Iraq to surrender its weapons of mass destruction for UN inspections. Another US led coalition in 2003 ended the regime of Saddam Hussein, thereby bringing to an end decades of defiance of UN Security Council resolutions (Infoplease, 2013