Economic diversification strategies in Iraq and their role in achieving sustainable economic development

Abstract

This research aims to examine economic diversification strategies in Iraq and analyze their role in achieving sustainable economic development. Iraq’s economy heavily depends on the oil sector as the primary source of revenue, making it vulnerable to global oil price fluctuations and economic crises. Data show that while the real GDP followed an upward trend between 2014 and 2022, the contribution of other economic sectors to GDP did not significantly change. The mining and quarrying sector remained the largest contributor, accounting for 52.61% of GDP in 2014 and increasing to 61% in 2022. In contrast, the banking and insurance sector had a very limited contribution, decreasing from 0.99% in 2014 to 0.53% in 2022.Iraq’s rentier economy, with its heavy reliance on oil revenues and weak productive sectors, remains highly exposed to external shocks. Therefore, the study recommends rehabilitating the productive sectors—particularly agriculture, industry, and tourism—along with all related supporting sectors. One of the most critical aspects of this process is developing a solid infrastructure base, which is essential for the success of any economic initiative. The study also encourages forming partnerships with foreign institutions and learning from the successful experiences of other countries in economic diversification.