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Formerly part of the Ottoman Empire, Iraq was occupied by Britain during the course of World War I; in 1920, it was declared a League of Nations mandate under UK administration. In stages over the next dozen years, Iraq attained its independence as a kingdom in 1932. A "republic" was proclaimed in 1958, but in actuality a series of military strongmen ruled the country until 2003. The last was SADDAM Husayn. 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. Following Kuwait's liberation, 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 over a period of 12 years led to the US-led invasion of Iraq in March 2003 and the ouster of the SADDAM Husayn regime. Coalition forces remain in Iraq under a UNSC mandate, helping to provide security and to support the freely elected government. The Coalition Provisional Authority, which temporarily administered Iraq after the invasion, transferred full governmental authority on 28 June 2004 to the Iraqi Interim Government, which governed under the Transitional Administrative Law for Iraq (TAL). Under the TAL, elections for a 275-member Transitional National Assembly (TNA) were held in Iraq on 30 January 2005. Following these elections, the Iraqi Transitional Government (ITG) assumed office. The TNA was charged with drafting Iraq's permanent constitution, which was approved in a 15 October 2005 constitutional referendum. An election under the constitution for a 275-member Council of Representatives (CoR) was held on 15 December 2005. The CoR approval in the selection of most of the cabinet ministers on 20 May 2006 marked the transition from the ITG to Iraq's first constitutional government in nearly a half-century.

Geography of Iraq

Population of Iraq

Government

Economy

Iraq's economy is dominated by the oil sector, which has traditionally provided about 95% of foreign exchange earnings. Although looting, insurgent attacks, and sabotage have undermined economy rebuilding efforts, economic activity is beginning to pick up in areas recently secured by the US military surge. Oil exports are around levels seen before Operation Iraqi Freedom, and total government revenues have benefited from high oil prices. Despite political uncertainty, Iraq is making some progress in building the institutions needed to implement economic policy and has negotiated a debt reduction agreement with the Paris Club and a new Stand-By Arrangement with the IMF. Iraq has received pledges for $13.5 billion in foreign aid for 2004-07 from outside of the US, more than $33 billion in total pledges. The International Compact with Iraq was established in May 2007 to integrate Iraq into the regional and global economy, and the Iraqi government is seeking to pass laws to strengthen its economy. This legislation includes a hydrocarbon law to establish a modern legal framework to allow Iraq to develop its resources and a revenue sharing law to equitably divide oil revenues within the nation, although both are still bogged down in discussions. The Central Bank has been successful in controlling inflation through appreciation of the dinar against the US dollar. Reducing corruption and implementing structural reforms, such as bank restructuring and developing the private sector, will be key to Iraq's economic success.

SOURCES: The CIA World Factbook, U.S. Department of State, Area Handbook of the US Library of Congress

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