Peregraf- Iraq's government is pursuing a new strategy to reduce the country's heavy dependence on oil revenues, with officials outlining plans to expand agriculture, industry, tourism, and the digital economy as part of a broader effort to diversify one of the world's most oil-dependent economies.
The initiative, announced Monday by Iraq's Ministry of Planning, forms part of updates to the country's 2023–2028 Five-Year Development Plan and is tied to Iraq Vision 2030, the government's long-term economic framework.
Abdul-Zahra al-Hindawi, spokesperson for the ministry, said the strategy rests on two parallel tracks: reducing the state budget's direct reliance on oil income and building productive sectors capable of generating sustainable revenue and long-term employment outside the petroleum industry.
"For decades, Iraq's economy has remained closely tied to fluctuations in global oil prices," al-Hindawi told the Iraqi News Agency. "The goal now is to strengthen non-oil sectors and create real job opportunities that can sustain economic stability."
Oil exports account for the overwhelming majority of Iraq's public revenues, leaving the country vulnerable to swings in global energy markets. Successive Iraqi governments have pledged economic diversification, though implementation has often been slowed by political instability, corruption, weak infrastructure, and an oversized public sector.
The ministry said the revised plan seeks to increase the contribution of non-oil sectors to the country's Gross Domestic Product (GDP) while raising revenues from taxes, customs duties, and financial fees. Officials also said they hope to attract more domestic and foreign investment.
Under the strategy, Iraq aims to achieve annual economic growth of roughly 4.2 percent while lowering unemployment to 10 percent or below and reducing poverty rates to under 15 percent.
Particular emphasis is being placed on industrial development. Al-Hindawi said Iraq's industrial strategy for 2024–2028 focuses on expanding manufacturing industries, supporting small and medium-sized enterprises (SMEs), and improving the competitiveness of domestic products.
He added that the government is also prioritizing agriculture to strengthen food security and reduce dependence on imports, alongside investments in transport, tourism, financial services, and the digital economy.
The plan includes efforts to expand partnerships with the private sector and activate Public-Private Partnerships (PPPs) in areas traditionally dominated by the state. Officials also pledged reforms aimed at improving the business climate, simplifying investment procedures, and increasing the efficiency of public spending.
Fiscal reforms are expected to play a central role in the strategy, with authorities seeking to strengthen tax and customs collection while redirecting spending toward productive projects rather than operational costs.
Al-Hindawi said the new approach would build on previous diversification initiatives rather than replace them entirely.
"We are not starting from zero," he said. "The current vision benefits from previous experiences but connects economic diversification to a comprehensive development plan with clear timelines, indicators and follow-up mechanisms."
Despite repeated reform pledges, economists say Iraq faces significant structural challenges in shifting away from oil dependence. The public sector remains the country's largest employer, while private-sector growth has lagged behind regional peers.
Still, officials argue that rising pressure on public finances and growing unemployment among Iraq's young population have made diversification increasingly urgent.