Economic Diversification


Iraq, an upper middle-income country, ranking 120 out of 189 countries on the 2018 human development index, is the most oil-dependent country globally. In 2018, hydrocarbon resources comprised 65% of its gross domestic product (GDP), near;y 100% of its exports, and more than 90% of central government revenues, but only 1% of total employment. 

In Iraq, human development progress has been impeded by protracted conflict, compounded by poor governance, corruption, lack of investment in basic social services, poor economic management, and major internal divisions and societal fractures. Whilst some progress has been made toward national recovery and stabilization, the country, with more than half the population below 25 years, is faced with an economic challenge. Youth unemployment stands at 18 per cent, compared to the overall formal unemployment rate of 8.2 per cent, with women fairing significantly worse. Youth and women also have consistently lower labor force participation – 19 and 26 per cent respectively, compared with 74 per cent for men. 

In order to promote an enabling environment, facilitating inclusive and diversified economic growth that benefits all citizens and move away from an oil dependent economy, UNDP supports the strengthening of business ecosystems, especially in high-impact, productive and labor-intensive sectors. UNDP provides support the Government of Iraq to implement its private sector development strategy (PSDS); designed to:

  • Improve access to markets and finance through innovative financing options; 
  • Establish small and medium enterprises (SMEs) and start-ups; 
  • Promote skills development and job placement; and 
  • Set up a system for asset grant replacement.

Programmes and Initiatives

Partnership Services for Support Unit to the Monitoring Committee on the Japanese ODA Loan
Funding Facility for Economic Reform
Supporting Recovery and Stability through Local Development
Strengthening Resilience of Sub-national Authorities


IDPs, refugees and vulnerable host community members supported through cash-for-work opportunities


Small and Medium Businesses (SMEs) provided asset recovery and small business grants


Placed in permanent jobs or apprenticeships


IDPs, refugees and vulnerable host community members participated in employability and vocational training, including literacy and language courses

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