Iraq is moving toward a new economic model in Iraq aimed at investing in locally available raw materials and strengthening domestic industry, according to the parliamentary Economy, Industry and Trade Committee. The plan comes as the government also speaks of industrial cities and modernizing factories with advanced technology.
In remarks to the Iraqi News Agency, committee member Safaa Al-Jabri said the approach is designed to reshape Iraq’s industrial base, support the Ministry of Industry, and connect local production more closely with market needs inside Iraq and abroad.
The New Economic Model Focuses on Local Manufacturing
Al-Jabri said the prime minister has been working over the past months, and will continue working in the coming period, on preparing an economic and industrial model that uses Iraq’s abundant raw materials and channels them into manufacturing.
He said the idea is to turn Iraq into an industrial zone that serves the region and supplies basic materials to nearby markets and Europe. He also pointed to possible projects such as a petrochemical plant to produce sulfur and glass-related products.
Support for the Ministry of Industry and Factory Upgrades
According to Al-Jabri, there is a clear effort to support the Ministry of Industry, which he said has suffered for years from administrative failure, corruption, and accumulated challenges that weakened its performance.
He added that many state factories are old, and that the newest one may date back to 2000. Because of this, the government is seeking to replace machinery and improve production equipment in several facilities.
Restructuring Industrial Assets
The plan includes merging the assets of some companies and developing others, especially in steel, iron, and aluminum industries, which require advanced technology and modern production systems.
He said the goal is not necessarily to build huge factories, but rather medium-sized, efficient plants that meet local demand and make better use of Iraq’s raw materials.
Industrial Cities and Modern Technology
Al-Jabri said Iraq joined the Paris Agreement in 2021 on climate, pollution reduction, temperature control, and emissions, which means future industrial projects must use cleaner and more advanced technology.
He added that industrial cities will require modern machines and equipment that can reduce emissions while also fitting within Iraq’s available electricity capacity.
Budget Reform and the Hormuz Crisis
He also said Iraq is going through an economic crisis because of developments in the Strait of Hormuz, and that the government is considering shifting toward a program and performance-based budget.
Such a shift, he said, could free up real funds for investment projects instead of spending most of the budget on salaries and operational costs, with only limited amounts left for development.
Ministry of Trade Seeks Greater Presence for Iraqi Products Abroad
In a separate statement, the Ministry of Trade said it is taking new steps to regulate importers and strengthen inspection of goods, while also working to increase the presence of Iraqi products in Arab, regional, and international markets.
Official spokesman Mohammed Hanoun said the ministry is organizing imports under existing laws and regulations to balance market supply with the protection of consumers and national producers.
Tighter Import Controls
Hanoun said the ministry has improved the rules for issuing importer IDs and has reorganized importer activity alongside stronger inspection, testing, and quality-control measures in coordination with relevant state bodies.
He stressed that the Iraqi market is not open to goods of unknown origin or products that do not meet technical standards. The measures, he said, are meant to protect consumers, preserve market safety, and prevent harm to the national economy.
Supporting Non-Oil Exports
Hanoun said support for local products is not limited to the domestic market. The ministry is also working to move Iraqi goods into foreign markets by easing export procedures and activating the role of Iraqi trade attachés abroad.
He added that the ministry is helping register Iraqi exporting companies in importing countries and reduce the bureaucracy that slows down export operations. The Export Support Fund, he said, is also an important tool for helping Iraqi firms expand internationally.
Target Markets and Export Diversification
He said the ministry wants to diversify markets instead of relying on one destination, with a focus on Arab and regional markets, especially the Gulf states, as well as Turkey, Iran, Jordan, and Egypt, in addition to Asian and European markets where Iraqi products can compete.
He noted that the ministry has a trade database that helps identify markets with demand for Iraqi goods. According to available data, countries such as China, India, South Korea, and the United States are important markets, alongside Turkey and several European countries.
Oil Still Dominates Exports
Hanoun said the main challenge is not only increasing trade volume, but changing its structure. He noted that Central Bank data show crude oil accounted for about 92.8% of Iraq’s total exports in the first quarter of 2025, while non-oil exports accounted for only 2.3%, in addition to petroleum products.
He added that the coming stage aims to increase the role of agriculture, industry, food products, and manufactured goods in exports, moving Iraq toward a more diversified and resilient economy.
Conclusion:
The statements from parliament and the government show that Iraq is at least planning a new economic model in Iraq built around industrial growth, local raw materials, and stronger non-oil exports. The success of that shift will depend on implementation, factory modernization, and a better environment for investment and production.
