ABSTRACT
In October 1985, a new pipeline spur linking Iraq's southern oil fields with Saudi Arabia's Red Sea port of Yanbu was commissioned. Baghdad is optimistic that this project and the planned expansion of the export pipeline through Turkey will help solve its most pressing economic problems. Despite Baghdad's determination to continue its program of economic development, the tremendous cost of the war—both in money and manpower—has caused severe disruptions as the country has struggled to come to terms with its lack of foreign currency. The clearest indication of Baghdad's plight was the news that two loans had been made by the Arab Monetary Fund to support the country's balance of payments. Other Arab financial institutions were also approached, and loans were signed with the Islamic Development Bank and the Arab Fund for Economic and Social Development. Yugoslavia, politically and economically close to Baghdad, has offered $500 million in financing for new work.
