Description and analysis of the Iraqi economy, let alone forecasting its performance, is therefore an inexact science. The country has experienced 20 years of destruction, with successive external shocks compounding those which have gone before. The economy and society have suffered terribly from the war against Iran, the intensive, US-led aerial attacks of early 1991, and the decade of international sanctions and isolation which have followed this. The industrial sector has contracted, while educational standards have collapsed. The problems that have beset the economy over the past two decades will persist well into the future, almost regardless of the political and economic policy stance adopted.
External debt is another burden which is likely to plague the country for years to come.
International humanitarian concern will probably see much of this written off or rescheduled, but with a long history of being unable or unwilling to service its debt, it will be enormously difficult for Iraq to borrow on the international capital markets. It follows that outside of the lucrative hydrocarbons sector, it will be extremely difficult for Iraq to attract substantial foreign investment. The country will therefore be even more reliant on its oil industry for foreign currency earnings than in the past. However, this will only help to bolster a basic safety welfare net, rather than herald a return to normality. To achieve the latter, sanctions will have to come to an end.