Formerly part of the Ottoman Empire, Iraq was occupied by the United Kingdom during World War I and was declared a League of Nations mandate under UK administration in 1920. Iraq attained its independence as a kingdom in 1932. It was proclaimed a "republic" in 1958 after a coup overthrew the monarchy, but in actuality, a series of strongmen ruled the country until 2003. The last was SADDAM Husayn from 1979 to 2003. Territorial disputes with Iran led to an inconclusive and costly eight-year war (1980-88). In August 1990, Iraq seized Kuwait but was expelled by US-led UN coalition forces during the Gulf War of January-February 1991. After Iraq's expulsion, the UN Security Council (UNSC) required Iraq to scrap all weapons of mass destruction and long-range missiles and to allow UN verification inspections. Continued Iraqi noncompliance with UNSC resolutions led to the Second Gulf War in March 2003 and the ouster of the SADDAM Husayn regime by US-led forces.

In October 2005, Iraqis approved a constitution in a national referendum and, pursuant to this document, elected a 275-member Council of Representatives (COR) in December 2005. The COR approved most cabinet ministers in May 2006, marking the transition to Iraq's first constitutional government in nearly a half century. Iraq held elections for provincial councils in all governorates in January 2009 and April 2013 and postponed the next provincial elections, originally planned for April 2017, until 2019. Iraq has held three national legislative elections since 2005, most recently in May 2018 when 329 legislators were elected to the COR. Adil ABD AL-MAHDI assumed the premiership in October 2018 as a consensus and independent candidate - the first prime minister who is not an active member of a major political bloc. His cabinet has been hailed as one of the most technocratic since 2005.

Between 2014 and 2017, Iraq was engaged in a military campaign against the Islamic State of Iraq and ash-Sham (ISIS) to recapture territory lost in the western and northern portion of the country. Iraqi and allied forces recaptured Mosul, the country's second-largest city, in 2017 and drove ISIS out of its other urban strongholds. In December 2017, then-Prime Minister Haydar al-ABADI publicly declared victory against ISIS while continuing operations against the group's residual presence in rural areas. Also in late 2017, ABADI responded to an independence referendum held by the Kurdish Regional Government by ordering Iraqi forces to take control of disputed territories across central and northern Iraq that were previously occupied and governed by Kurdish forces.

COR vote in first round - Barham SALIH (PUK) 165, Fuad HUSAYN (KDP) 90; Barham SALIH elected president in second round - Barham SALIH 219, Fuad HUSAYN 22; note - the COR vote on 1 October 2018 failed due to a lack of quorum, and a new session was held on 2 October

Iraq's GDP growth slowed to 1.1% in 2017, a marked decline compared to the previous two years as domestic consumption and investment fell because of civil violence and a sluggish oil market. The Iraqi Government received its third tranche of funding from its 2016 Stand-By Arrangement (SBA) with the IMF in August 2017, which is intended to stabilize its finances by encouraging improved fiscal management, needed economic reform, and expenditure reduction. Additionally, in late 2017 Iraq received more than $1.4 billion in financing from international lenders, part of which was generated by issuing a $1 billion bond for reconstruction and rehabilitation in areas liberated from ISIL. Investment and key sector diversification are crucial components to Iraq’s long-term economic development and require a strengthened business climate with enhanced legal and regulatory oversight to bolster private-sector engagement. The overall standard of living depends on global oil prices, the central government passage of major policy reforms, a stable security environment post-ISIS, and the resolution of civil discord with the Kurdish Regional Government (KRG).

Iraq's largely state-run economy is dominated by the oil sector, which provides roughly 85% of government revenue and 80% of foreign exchange earnings, and is a major determinant of the economy's fortunes. Iraq's contracts with major oil companies have the potential to further expand oil exports and revenues, but Iraq will need to make significant upgrades to its oil processing, pipeline, and export infrastructure to enable these deals to reach their economic potential.

In 2017, Iraqi oil exports from northern fields were disrupted following a KRG referendum that resulted in the Iraqi Government reasserting federal control over disputed oil fields and energy infrastructure in Kirkuk. The Iraqi government and the KRG dispute the role of federal and regional authorities in the development and export of natural resources. In 2007, the KRG passed an oil law to develop IKR oil and gas reserves independent of the federal government. The KRG has signed about 50 contracts with foreign energy companies to develop its reserves, some of which lie in territories taken by Baghdad in October 2017. The KRG is able to unilaterally export oil from the fields it retains control of through its own pipeline to Turkey, which Baghdad claims is illegal. In the absence of a national hydrocarbons law, the two sides have entered into five provisional oil- and revenue-sharing deals since 2009, all of which collapsed.

Iraq is making slow progress enacting laws and developing the institutions needed to implement economic policy, and political reforms are still needed to assuage investors' concerns regarding the uncertain business climate. The Government of Iraq is eager to attract additional foreign direct investment, but it faces a number of obstacles, including a tenuous political system and concerns about security and societal stability. Rampant corruption, outdated infrastructure, insufficient essential services, skilled labor shortages, and antiquated commercial laws stifle investment and continue to constrain growth of private, nonoil sectors. Under the Iraqi constitution, some competencies relevant to the overall investment climate are either shared by the federal government and the regions or are devolved entirely to local governments. Investment in the IKR operates within the framework of the Kurdistan Region Investment Law (Law 4 of 2006) and the Kurdistan Board of Investment, which is designed to provide incentives to help economic development in areas under the authority of the KRG.

Inflation has remained under control since 2006. However, Iraqi leaders remain hard-pressed to translate macroeconomic gains into an improved standard of living for the Iraqi populace. Unemployment remains a problem throughout the country despite a bloated public sector. Overregulation has made it difficult for Iraqi citizens and foreign investors to start new businesses. Corruption and lack of economic reforms - such as restructuring banks and developing the private sector – have inhibited the growth of the private sector.

aim(s): back Iraq’s pro-government Shia militias by supplying two battalions of IRGC forces to jointly engage in combat against ISIS; provide weapons and munitions to Shia militants targeting US forces

area(s) of operations: Baghdad, Basrah, Karbala, Mosul, Samarra, Tikrit  

Iraq's lack of a maritime boundary with Iran prompts jurisdiction disputes beyond the mouth of the Shatt al Arab in the Persian Gulf; Turkey has expressed concern over the autonomous status of Kurds in Iraq