ABSTRACT
For Iraq the first half of the 1990s was a disastrous period in her history. Emerging from the Iran—Iraq war in 1988 with a large foreign debt, a persistent burden of high defence spending and much domestic destruction, she had begun to rebuild her economy aided by her considerable endowment of oil wealth. Like other states in the Near East, Iraq had embarked on a programme of economic liberalization and modest privatization. Iraq’s situation in 1989 was by no means bad; considerable as her debt was, it was much less in relation to export earnings than that of some other states in the Near East, such as Turkey and Egypt. However, Iraq’s hopes of economic improvement were crushed by the Kuwayt crisis and war of 1990–1. War, civil war, physical damage to her economic infrastructure through bombing, and the effect of sanctions (which blocked the export of oil on which she relied for 98 per cent of her foreign exchange earnings) devastated her economy and led to very considerable suffering by her people. How deep was that suffering is impossible to say at present in the face of censorship and the absence of reliable statistics. One can note only the most obvious evidence of distress: hyper-inflation (in November 1994 800 Iraqi dinars bought only one US dollar), unemployment, rationing and popular demonstrations against high food prices which, by the end of 1995, were estimated to have increased fifty times since 1990.
