Why does Iraq fail to achieve self-sufficiency despite its resources?
Why does Iraq fail to achieve self-sufficiency despite its resources?
2026-04-24
Shafaq News – Baghdad
Iraq continues to rely heavily on imports to secure its needs for basic and consumer goods, at a time when local production faces accumulating challenges that limit its ability to compete, despite the availability of natural and human resources.
This comes in conjunction with what was revealed in a recent study published by the Nature Food Council, which showed that Iraq is among the countries unable to achieve food self-sufficiency, reflecting the depth of the gap between available potential and production reality.
The Iraqi market relies on importing a wide range of goods, primarily food and agricultural products, along with electrical appliances and construction materials, which makes the economy vulnerable to external fluctuations, whether in commodity prices or global supply chains.
Local products also face additional challenges related to weak customs protection and the existence of informal outlets through which goods enter without sufficient control, which increases pressure on the local product and reduces its growth opportunities within the market.
Over-reliance threatens the economy
Economic expert Mohammed Al-Hassani told Shafaq News Agency that “Iraq’s dependence on imports remains very high, as estimates indicate that total imports of goods and services exceed $100 billion annually, of which about $80 to $90 billion are for goods alone.”
He added that “this great dependence on the outside world has made the Iraqi economy one of the most affected by geopolitical crises, especially in light of the closure of the Strait of Hormuz, which is a major passage for trade and energy.”
Al-Hassani explained that “Iraq has begun to face direct repercussions as a result of this closure, represented by the increase in shipping and insurance costs, the delay in the arrival of some goods, as well as the increase in the prices of a number of goods in the local market.”
He pointed out that “excessive reliance on imports puts the country in a vulnerable position to any external shock, as global crises are quickly reflected internally, whether through price increases or shortages of some materials,” adding that “what is happening now highlights the urgent need to reduce reliance on imports by supporting local production, especially since the crises have revealed the limited ability of the market to withstand without imports.”
Reports indicate that Iraq’s import volume is very high, estimated at more than $100 billion annually, of which $80–90 billion is for goods.
Imports cover more than 50% of Iraq’s food needs, with almost complete dependence (70–100%) on foreign sources for basic commodities such as vegetable oils, sugar and rice, making the local market directly linked to global markets and their fluctuations.
The laws are ineffective.
Meanwhile, economist Hilal Al-Taan, speaking to Shafaq News Agency, said that Iraq does indeed have a legislative system aimed at protecting local products, but its implementation is still weak and insufficient, which limits its ability to have a real impact on the market.
The expert continued, saying that “the laws of product protection, consumer protection, competition and prevention of monopoly grant the concerned authorities the powers to impose duties on imported goods, prevent dumping, and provide support to the industrial and agricultural sectors,” indicating that “these laws, despite their importance, have not been activated as required, which has kept the Iraqi market largely open to imports since 2003.”
According to Al-Ta’an, “weak customs control at times, along with high local production costs and a lack of government support for the agricultural and industrial sectors, have all contributed to weakening the competitiveness of the national product.” He explained that the entry of cheap goods into Iraq is due to the weak application of customs tariffs, as well as the existence of cases of evasion through reducing the real values of imported goods, which allows the entry of low-priced products from neighboring countries.
He pointed out that this sometimes leads to deliberately flooding the market, which harms local industry and agriculture and pushes towards increased dependence on imports. He noted that the high costs of local production, as a result of unstable electricity, high transportation costs, weak infrastructure, as well as the lack of sufficient government support, make the local product less competitive compared to foreign products.
Al-Taan concluded his remarks by saying that “addressing these challenges requires the effective implementation of laws, tightening of customs control, and the adoption of clear economic policies that support local production and reduce its costs, thereby enhancing the ability of the Iraqi economy to achieve greater self-sufficiency and reduce dependence on foreign countries.”
The protection of local products in Iraq is based on the Iraqi Products Protection Law No. 11 of 2010 and the Customs Tariff Law No. 22 of 2010, which allow for the imposition of fees and procedures to limit the dumping of imported goods in the market, but implementation faces challenges.
Industry without protection
For his part, economist Dirgham Muhammad Ali told Shafaq News Agency that the lack of activation of laws protecting local products and the failure to strictly apply Iraqi standards, along with weak industrial lending, represent one of the most prominent obstacles to the growth of national industry, adding that the absence of a specialized body to support local products further complicates the industrial landscape in the country.
He explained that imported products receive significant advantages in their countries of origin, such as government support, the provision of raw materials at low prices, and financing facilities. These are privileges that are not available at the same level within Iraq, which puts the local product in a weak competitive position within the market.
According to Ali, the effective implementation of the Iraqi standard, along with providing soft loans to the industrial sector and supplying raw materials at subsidized prices, would enhance the competitiveness of the national product and increase its presence in local markets, stressing that these measures represent a fundamental step to support the national economy and reduce dependence on imports.
Government plans to support the economy
In addition, the Prime Minister’s Advisor for Financial Affairs, Mazhar Muhammad Saleh, told Shafaq News Agency that supporting economic activity in Iraq is proceeding through two main paths. The first is the agricultural sector, through supporting grain production and purchasing crops at subsidized prices that exceed global prices, in addition to providing production inputs and implementing the agricultural calendar to protect the local product and reduce the impact of imports.
He added that the second track is the industrial sector, where projects were supported through the allocation of land, the provision of fuel, and the facilitation of technology imports, as well as financing initiatives from the Central Bank to support more than 1,300 industrial projects, with the allocation of more than one trillion dinars as sovereign guarantees to obtain external loans.
Saleh also stated that these measures, along with the launch of the “Leadership Bank” to support small projects, aim to revitalize the private sector and reduce unemployment from about 13%, by strengthening the link between productive sectors and raising the efficiency of the national economy.
Iraq is experiencing rapid population growth, which is increasing the pressure on food demand. The population is growing at more than 2.5% annually, with projections indicating it will exceed 50 million in the coming years. This growth is met with slow development of domestic production, widening the food gap over time.
shafaq.com
