The latest 5-year economic development plan
introduced in April 2018 included expanding into manufacturing and away from
oil. The previous plan did the same thing as then Deputy Prime Minister Hussein
Shahristani explained, “The government made a decision to focus upon other
sources in the country instead of oil, so the new plan will basically focus on
industry instead of oil.” Data
collected by the United Nations showed a modest growth in industrial output
starting in 2008. In that year, the value of manufacturing output was $27.4 million.
It then went up to $36.3 million in 2009, $37.6 million in 2010, $44.4 million
in 2011 before levelling off with $44.1 million in 2012, $39.5 million in 2013,
and $45.2 million in 2014. With oil still being the dominant sector of the
economy however, manufacturing remained a minimal portion of Gross Domestic
Product (GDP). In 2008, manufacturing was only 1.7%, then went up to 2.6% in
2009, but has basically remained around that level for the following years.
Compared to the rest of the Middle East, Iraq has the smallest industrial
sector in value of output and percentage of GDP. For instance, Oman, Saudi
Arabia, Bahrain, Kuwait, the United Arab Emirates and Qatar all earn over $1
trillion a year from its manufacturing, and in every country in the region that
part makes up anywhere from 3-19% of GDP. That has left Iraq as being one of
the most oil dependent countries in the Middle East, as the International
Monetary Fund mentioned
out in 2010.
There are a number of reasons why Iraq has not been able to
diversify. The head of the Iraqi Union of Industries pointed
out that 90% of the country’s manufacturers closed after the overthrow of
Saddam Hussein. The Coalition Provisional Authority’s removal of tariffs, which
led to a flood of cheap imports undermined many local businesses. The union
head also mentioned
the lack of consistent electricity, and the difficulty of obtaining loans from
banks. Another issue is that around 80% of industry is state owned, have not
been reformed, and have not been adequately funded by the government. (1) Many
factories are highly inefficient and working far below capacity. Many believe
that Baghdad has never put a serious effort into industrializing. These are all
common factors in countries with large oil and gas sectors. In Saudi Arabia,
which has the world’s large petroleum reserves, manufacturing is only 10% of
GDP. In Kuwait it’s only 5%. With so much money coming in from natural
resources, usually going into state coffers officials have little incentive to
change things. There is a whole
literature
about
the “resource curse” and what it has done to countries like Iraq.
Value Manufacturing
Output Middle East (US Dollars)
|
Country
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
|
Iraq
|
27.4
|
36.3
|
37.6
|
44.4
|
44.1
|
39.5
|
45.2
|
|
Syria
|
41.7
|
49.1
|
56.0
|
47.8
|
31.0
|
20.4
|
20.0
|
|
Yemen
|
57.8
|
60.9
|
65.6
|
55.4
|
58.0
|
60.3
|
56.8
|
|
Algeria
|
141.9
|
147.4
|
156.0
|
158.6
|
162.1
|
184.5
|
219.7
|
|
Palestine
|
174.5
|
183.8
|
196.6
|
187.2
|
214.7
|
218.3
|
198.6
|
|
Egypt
|
252.3
|
257.3
|
265.8
|
258.9
|
256.4
|
258.0
|
274.9
|
|
Morocco
|
389.0
|
373.5
|
400.2
|
421.9
|
423.2
|
414.3
|
412.3
|
|
Jordan
|
418.0
|
407.7
|
398.3
|
397.3
|
390.5
|
383.6
|
377.3
|
|
Libya
|
45.15
|
460.6
|
460.2
|
104.8
|
344.0
|
153.7
|
107.5
|
|
Lebanon
|
492.8
|
474.4
|
493.9
|
485.3
|
472.8
|
473.1
|
597.0
|
|
Tunisia
|
555.5
|
541.7
|
551.5
|
530.5
|
533.8
|
535.5
|
549.3
|
|
Oman
|
1,411.3
|
1,532.4
|
1549.1
|
1454.0
|
1,351.2
|
1,262.6
|
1,157.4
|
|
Saudi Arabia
|
1,501.2
|
1,449.0
|
1,593.4
|
1,703.8
|
1,740.2
|
1,765.1
|
1,869.4
|
|
Bahrain
|
2,283.3
|
2,239.7
|
2,213.0
|
2,209.0
|
2,268.2
|
2,315.2
|
2,391.6
|
|
Kuwait
|
2,397.1
|
2,036.9
|
1,975.7
|
2,224.5
|
2,556.2
|
2,434.1
|
2,183.3
|
|
UAE
|
3,395.6
|
2,570.7
|
2,412.4
|
2,475.5
|
2,562.4
|
2,553.8
|
2,606.9
|
|
Qatar
|
4,297.4
|
4,247.0
|
4,463.2
|
4,497.0
|
4,654.6
|
4,648.9
|
4,626.5
|
Share of
Manufacturing in GDP (Percentage)
|
Country
|
2008
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
|
Iraq
|
1.7
|
2.6
|
2.3
|
2.8
|
2.7
|
2.3
|
2.9
|
|
Algeria
|
3.8
|
4.8
|
4.3
|
3.7
|
3.7
|
3.9
|
4.1
|
|
Syria
|
4.1
|
4.7
|
4.8
|
4.6
|
4.7
|
4.7
|
4.7
|
|
Libya
|
4.2
|
6.3
|
5.6
|
2.0
|
4.6
|
4.1
|
3.5
|
|
Kuwait
|
4.3
|
4.9
|
5.3
|
5.0
|
5.3
|
5.3
|
5.2
|
|
Yemen
|
5.7
|
8.3
|
8.5
|
7.8
|
8.6
|
8.2
|
8.2
|
|
UAE
|
8.3
|
8.7
|
8.6
|
8.2
|
8.4
|
8.4
|
8.5
|
|
Lebanon
|
8.7
|
8.8
|
8.5
|
8.2
|
7.9
|
8.2
|
13.4
|
|
Saudi Arabia
|
9.0
|
10.8
|
11.0
|
10.0
|
9.8
|
10.0
|
10.8
|
|
Qatar
|
10.5
|
9.2
|
8.8
|
9.2
|
10.1
|
9.7
|
9.8
|
|
Oman
|
10.4
|
11.3
|
10.4
|
10.6
|
10.0
|
9.7
|
9.3
|
|
Palestine
|
13.7
|
13.9
|
15.3
|
13.8
|
15.7
|
14.6
|
14.7
|
|
Bahrain
|
15.3
|
14.1
|
14.6
|
15.0
|
15.0
|
14.8
|
14.9
|
|
Egypt
|
16.3
|
16.6
|
16.9
|
16.5
|
15.8
|
15.6
|
16.4
|
|
Morocco
|
16.8
|
17.5
|
17.4
|
16.8
|
16.5
|
17.0
|
18.2
|
|
Tunisia
|
19.2
|
18.3
|
17.7
|
17.3
|
16.8
|
16.6
|
16.0
|
|
Jordan
|
19.3
|
18.5
|
18.2
|
18.4
|
17.8
|
18.4
|
18.0
|
Manufacturing Establishments
The amount of businesses saw a huge jump from 2010 to 2011,
but then leveled off
2010 11,678
2011 47,983
2012 44,565
Types of
Manufacturing
The largest number of manufacturing enterprises were in food
and beverages, clothing, fabricated metal, and furniture. Three out of those
four saw growth from 2010 to 2011 and then a decline the following year.
|
Type
|
2010
|
2011
|
2012
|
|
Clothing
|
1,107
|
7,322
|
4,446
|
|
Fabricated Metal
|
2,986
|
18,070
|
15,910
|
|
Furniture
|
1,924
|
6,501
|
10,839
|
|
Food & beverages
|
3,539
|
10,326
|
7,609
|
Number of
Manufacturing Workers
Overall, the number of workers in manufacturing has
continued to grow
2010 223,871
2011 330,565
2012 354,634
Manufacturing Wages
The amount paid in wages also grew from 2010-12
2010 1,754,694 dinars
2011 2,079,684 dinars
2012 2,346,586 dinars
FOOTNOTES
1. Dunlop, W.G., “Billions needed to rebuild Iraqi industry:
minister,” Agence France Presse, 7/22/10
SOURCES
Birdsall, Nancy and
Subramanian, Arvind, “Saving Iraq From Its Oil,” Foreign Affairs, July/August
2004
Dunlop, W.G., “Billions needed to rebuild Iraqi industry:
minister,” Agence France Presse, 7/22/10
Geiger, Julianne,
“Iraq Unveils Plan To Diversify Away From Oil,” Oil Price, 4/3/18
Iraq Directory,
“More than 90% of Iraqi industries are halted,”
Kami, Aseel, “Iraq industrial sector attracts growing investment,”
Reuters, 11/19/12
Kami, Aseel and Chaudhry, Serena, “FEATURE-Small business
struggles in Iraq,” Reuters, 3/30/11
Merza, Ali,
“Iraq’s National Energy Strategy: Oil and Gas Output, Diversification and
Employment,” Middle East Economic Survey, 8/12/13
Tijara Provincial
Economic Growth Program, “Assessment of Current and Anticipated Economic
Priority In Iraq,” United States Agency for International Development, 10/4/12
Yousif, Bassam,
“Iraq’s stunted growth: human and economic development in perspective,”
Contemporary Arab Affairs, 3/31/16
United Nations Economic and Social Commission for Western
Asia Industrial Development and Mining Organization, “Bulletin of Industrial
Statistics for Arab Countries 2008-2014, Ninth issue,” 2016
2 comments:
Joel.
You got it all wrong! If the manufacturing output was $27.4 billion in 2008 and $36.3 billion in 2009 while the manufacturing contribution was 1.7% in 2008 and 2.6% in 2009, simple calculations would result in Iraq’s GDP was $1.61 trillion in 2008 and $1.396 trillion in 2009! Is this realistic? Please check your sources and calculations.
Humam Misconi
Hi Humam
Thanks so much for catching that. It was supposed to be million.
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