Iraq country brief

Overview

Modern Iraq was established as a British Protectorate in 1920 by the League of Nations, following the First World War and the collapse of the Ottoman Empire. A monarchy was established in 1921, with Iraq gaining its independence in 1932. In 1958, the monarchy was overthrown in a military coup d’état, and the Republic of Iraq was created. It came under the control of the Ba'ath Party in 1968, with General Saddam Hussein gradually assuming control and formally acceding to the Presidency in 1979. He ruled until the collapse of his regime, following US-led coalition military action launched in March 2003 over Iraq’s failure to cooperate in relation to suspected stockpiles of weapons of mass destruction in violation of UN Security Council Resolution 687. Iraq has been led by a democratically-elected government since 2006.

Iraq shares borders with Iran, Turkey, Kuwait, Saudi Arabia, Jordan and Syria. It has a narrow section of coastline measuring 58 km on the northern Gulf. Its capital is Baghdad. It has a total area of 438,317 km² and a population of around 32 million. There are 18 provinces in Iraq, including three provinces under the control of the Kurdish Regional Government (KRG), an autonomous regional government recognised under the Iraqi Constitution.

Political Overview

System of Government

Iraq is a federal constitutional democracy. The Head of State is the President (newly-elected Kurdish politician Fuad Massoum). The Head of Government is the Prime Minister, who is drawn, along with the Cabinet Ministers, from the Council of Representatives (CoR). Ministers forego their CoR seats to serve in Cabinet. The Iraqi people elect the 328 members of the CoR through an open-list, proportional representation electoral process. Eight seats are set aside for representation of Iraqi minorities. Members serve four year terms.

After Saddam's fall in 2003, the coalition established the Coalition Provisional Authority (CPA). The CPA transferred sovereignty to the Iraqi Interim Government in June 2004 until national elections were held on 30 January 2005; thereafter the Iraqi Transitional Government assumed authority. In May 2005, the Iraqi Transitional Government appointed a multi-ethnic committee to draft a new Iraqi Constitution, which was ratified in a nationwide referendum held on 15 October 2005. On 15 December 2005, Iraqis again went to the polls to participate in the first national legislative elections as outlined by the Constitution. The government took office in March 2006 for a four year term, and a Cabinet led by Prime Minister Al-Maliki was approved and installed in May 2006. The second national elections were held on 7 March 2010. After a prolonged deadlock the CoR approved a new Government of National Unity, led by Prime Minister Al-Maliki, in December 2010.

Most recently, national elections were held on 30 April 2014, despite conflict in some parts of the country. The Independent High Electoral Commission of Iraq (IHEC) estimated that 62 per cent of eligible Iraqis voted across the country. Australia was one of several countries where out-of-country voting took place. After an extensive process of coalition building, Dr Haider Al-Abadi was subsequently elected by Parliament as the new Prime Minister of Iraq.

A number of contentious issues remain unresolved by the CoR including proposed legislation to provide a framework for foreign investment in the oil and gas sector, to establish a process for the distribution of oil revenue and to resolve the disputed territories of Iraq. The draft Jaafari Personal Status law, which would constrain women’s rights in marriage and custody access to older children, is still to be considered by the CoR. Details of a national budget are still to be confirmed.

Security

Following the overthrow of Saddam Hussein, Iraq witnessed widespread violence led by insurgent groups along sectarian lines, and against the coalition forces. The security situation improved slowly due to a combination of ongoing political progress and the increased capability of the Iraqi Security Forces (ISF), under the guidance of coalition forces. These successes allowed coalition forces to progressively transfer primary security responsibility to the ISF.

In December 2008, the Government of Iraq assumed full responsibility and sovereignty over the country, with foreign troops remaining in Iraq only with the agreement of the country's democratically elected government.

The country continues to face major security challenges, with extremists intent on using violence to undermine the government and inflame sectarian divisions. During late 2013 and 2014 the terrorist organisation the Islamic State of Iraq and the Levant (ISIL) (also known as Daesh) seized territory in west and northwest Iraq, including the city of Mosul.

The conflict created a major humanitarian crisis, displacing over a million people. Australia has consistently provided humanitarian assistance, including to the UN High Commissioner for Refugees (UNHCR) and to the UN World Food Programme (WFP), which operate in Iraq.

The Australian Government advises Australians not to travel to Iraq; An Australian diplomatic presence remains in Iraq. However, Australia’s Embassy in Baghdad is closed to the public until further notice, due to the security situation, and consular assistance is no longer available within Iraq. See travel advice for Iraq.

Bilateral Relations

Australia and Iraq enjoy a friendly and increasingly diverse relationship, with regular engagement on diplomatic, political and economic issues. Australia and Iraq are represented bilaterally through Embassies in Baghdad and Canberra respectively. Iraq has a Consulate-General in Sydney and the Kurdish Regional Government retains a representative office, also in Sydney.

Australia has had diplomatic relations with Iraq in various forms since 1935. Australia opened an Embassy in Baghdad in 1976; Iraq established an Embassy in Canberra in 1995.

After the closure of the Australian Embassy in Baghdad in 1991, and the closure of the Iraqi Embassy in Canberra in 2003, full diplomatic relations resumed when both Embassies reopened in 2004, following the transfer of authority from the CPA to the Iraqi Interim Government.

Australian forces joined coalition action against the regime of Saddam Hussein in 2003 and retained a contribution until the withdrawal in August 2011 of a number of those remaining personnel providing security to the Australian Embassy in Baghdad. Australia again deployed military personnel to Iraq in November 2014, joining international efforts to advise and assist the Iraqi government in building the capacity of the Iraqi security forces to combat ISIL.

People to people links

There is a sizeable Iraqi community in Australia. According to census data, at 30 June 2011, 50,450 people born in Iraq were living in Australia. Numbers of Australian residents and/or dual citizens registered to vote in the Iraqi elections suggest the Iraqi community may now total over 60,000. In 2014, there were 1,043 Iraqi students enrolled in Australia.

The resettlement of Iraqis who have fled their home country remains a priority within Australia’s offshore Humanitarian Programme. In the last 10 years, around 22,000 Iraqis who have fled violence and unrest in Iraq have found a new life in Australia. Iraqis were the single largest nationality granted visas under the offshore Humanitarian Programme over this period, with around one in every five refugees resettled in Australia coming from Iraq. Many of the Iraqis resettled in Australia under the Humanitarian Programme have come from minority Christian communities, including many Assyrians. Recognising the humanitarian impact of ISIL activity in Iraq, Australia committed to resettling in 2014-2015 at least 2,200 Iraqis most at risk.

Australian assistance

Since 2003, Australia has provided $335 million in development and humanitarian assistance to Iraq to re-establish services to over 1.3 million people, including over half a million refugees and internally displaced people. This is in addition to $987 million in debt relief to support Iraq’s transition to a stable and democratic nation after decades of war and dictatorship. Australia has worked in partnership with the Government of Iraq to improve agriculture research and rural development, public sector governance, education, landmine clearance and basic services delivery. Given Iraq’s ability to fund its own development, bilateral aid from Australia was phased down and ended in 2013-14.

Australia has provided an additional $22 million in humanitarian assistance to Iraq since June 2014 to assist in addressing the humanitarian crisis caused by the activities of ISIL.

Economic Overview

Iraq has the world’s fifth largest reserves of oil and gas, typically earning around US$8 billion a month in oil revenues. Progress from a centrally planned economy to a more market oriented one remains uneven. Key challenges for the Iraqi Government include further increasing oil production, encouraging private sector development, improving service delivery (especially water and electricity), and ongoing security concerns.

In 2013, year-on-year inflation was 1.9 per cent. The Iraqi Dinar has replaced the US dollar as the main currency, and a functioning but small banking system and stock exchange now operate. Oil remains critical to the Iraqi economy, accounting for more than 95 per cent of government revenue and over 80 per cent of export revenue. Iraq exported an average 2.45 million barrels per day in 2014, with exports in December 2014 hitting a record high in more than three decades. Falling oil prices have resulted in declining oil revenues, however.

Iraq achieved real GDP growth of 4.2 per cent in 2013. The impact of conflict across the country and the resulting humanitarian crisis, in conjunction with falling oil prices, will present significant challenges for Iraq in maintaining growth. In December 2013, the IMF revised its estimate of Iraq’s GDP growth in 2014 from over 6 per cent (before the beginning of the ISIL insurgency) down to a contraction of about 0.5 per cent—despite a better than expected performance of the oil sector.

The key challenge for Iraq will be to continue to build capacity to use these substantial oil reserves to the benefit of current and future generations. As a middle income country Iraq has advanced to the point, where, in future years, it will be able to fund its own capacity building and development.

For more information on the Iraqi economy, please see our Iraq fact sheet [PDF 50 KB].

Trade and Investment

Historically, Australia's primary commercial interest in Iraq has been wheat, which it has exported to Iraq for over 50 years. Australia’s wheat exports to Iraq in 2013-14 were valued at $313 million. A further $7 million in dairy products was exported to Iraq in 2013-14.

The Australian and Iraqi Governments continue to work to broaden bilateral trade relations. In 2007, Iraq announced the opening of an Iraq Trade Liaison Office in Canberra and the appointment of a senior trade official to Australia. At the same time, The Australian Embassy in Baghdad and Austrade continue to facilitate commercial links between Australia and Iraq.

Australia actively supported Iraq's successful bid for observer status in the World Trade Organisation and will continue to assist Iraq to engage with the global economy.

Information on doing business and opportunities in Iraq

High Level Visits

There were a number of high level visits to Iraq by representatives of the Australian Government in 2014. Prime Minister Tony Abbott and Minister for Defence Kevin Andrews visited Baghdad in January 2015. Mr Abbott met with Prime Minister Al-Abadi and thanked personally Australian armed forces personnel involved in capacity building training of Iraqi Security Forces. Minister for Foreign Affairs Julie Bishop met with government leaders, including the Prime Minister and Minister of Foreign Affairs, during her October visit.

In February 2014, the visit to Iraq by Victorian Minister for Agriculture and Water Peter Walsh was focused on Iraq’s interest in Australian rice, dairy and salinity management. This followed the May 2013 visit to Australia of Dr Sargon Slewa, then-Iraqi Minister for Agriculture, together with a number of senior Iraqi officials. The delegation visited South Australia and Victoria to discuss irrigation management, dryland farming and Australia’s grain and dairy capabilities.

In March 2009, then-Prime Minister Nouri Al-Maliki visited Australia as a Guest of Government. As the first visit by an Iraqi Prime Minister to Australia, Prime Minister Al-Maliki's visit signaled a new phase in the bilateral relationship. During the visit, Prime Minister Al-Maliki and then Prime Minister Kevin Rudd signed a declaration on increased cooperation in six key areas and to enhance trade and investment ties.

Last Updated: 18 August 2014