Iraq’s manufacturing sector: a challenging path to more products

Abstract

This policy report on Iraq’s industrial sector is the seventh in a series of reports aimed at identifying strategic options Arab countries have in undertaking structural transformation. Using the product space methodology, this report analyzes existing capabilities of selected economies by identifying products they currently export and determining which path they should follow to produce more sophisticated and strategic products. A study of Iraq’s product space reveals that given its limited diversification and strong dependence on oil, the country’s future path for development should focus on new opportunities in the foodstuff and chemical clusters. To meet this goal, industrial policy should focus on selecting a number of new industries or products at which to target public inputs in order to provide temporary public support that will attract and facilitate private investment in new products.