As Iraq embarks upon serious post-war reconstruction efforts amidst political turmoil, the country's automotive sector has been identified as a key target area for growth and reform. Iraq's automotive sector has suffered considerably from years of protectionist government policies, sanctions, and war. The country's industrial sector, once one of the most robust in the Middle East, has deteriorated significantly due to conflict in the region, with many Iraqi factories taken offline in response to the 2014 Islamic State (IS) invasion.
Despite this, recent government moves to stimulate activity within the automotive sector have resulted in rising levels of foreign investment, indicating a potential rebound for the industry following over a decade of heavy losses due to domestic conflict and mismanagement in the sector.
Iraq's economy has experienced continuous stress and deterioration since the 1980s. A series of conflicts, beginning with the Iran-Iraq War from 1980-1988, followed by the Gulf War in 1991 and the US invasion in 2003, severely crippled the Iraqi economy. In the wake of the Gulf War, Iraq was exposed to far-reaching economic sanctions from 1991 to 2003, which served to hinder economic development in the country.
Currently, Iraq is in the midst of a violent conflict with IS, further handicapping the country's reconstruction efforts. In order to overcome the economic challenges of the past three decades, the Iraqi government has moved to centralise the country's economy, establishing the primacy of the public sector over an increasingly weak private sector.
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