There has been some economic progress in Iraq, and Iraq has tremendous
potential for growth. But economic development is hobbled by
insecurity, corruption, lack of investment, dilapidated
infrastructure, and uncertainty. As one U.S. official observed to us,
Iraq's economy has been badly shocked and is dysfunctional after
suffering decades of problems: Iraq had a police state economy in the
1970s, a war economy in the 1980s, and a sanctions economy in the
1990s. Immediate and long-term growth depends predominantly on the oil
sector.