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The oil industry dominates Iraq's economy, traditionally accounting for nearly 95% of the country's revenues. Oil is produced mainly by the Iraq Petroleum Company, which was owned by an international group of investors until it was nationalized in 1972. The oil is piped to Turkey, Tripoli (Lebanon), Baniyas (Syria), and the Persian Gulf. Oil exports, which had suffered during the Iran-Iraq War, improved during the late 1980s, only to be severely decreased by embargoes related to the Persian Gulf War. In 1996, a UN agreement allowed Iraq to export oil for the first time since 1990; by the late 1990s, oil exports were about one third of the prewar level.
Aside from petroleum production and refining, Iraq has a small, diversified industrial sector, including the production of chemicals, textiles, cement, food products, construction materials, leather goods, and machinery. New industries have been started in electronics products, fertilizers, and refined sugar. Agricultural production, which employs about a third of the workforce, is not sufficient to meet the country's food requirements. Iraq's chief crops include wheat, barley, rice, vegetables, dates (Iraq is one of the world's largest producers), and cotton. Cattle and sheep are also raised.
Iraq is highly dependent on foreign economic aid, from both Western and Arab countries. The economic embargo has reduced exports and imports and has contributed to a sharp rise in prices. The country also has a severe labor shortage. The Baghdad Railway, long an important means of communication, is declining in importance in favor of travel by road and air. There are international airports at Baghdad and Basra, and a state-owned airline operates within Iraq and abroad.
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