Some economic aspects of oil investments in Iraq

The primary interest of this study is on the oil industry in Iraq, its development and some aspects of its effects on Iraq's economy. Before stating the problem in more explicit terms, it would be well to sketch briefly something of the background of the subject. The international oil industry has provided a broad field for study. It has been the subject of numerous books and articles and countless treatises. Many political and economic aspects of the industry's operations have been surveyed, investigated and analyzed in considerable detail. It has often been a source of controversial treatment in such writings, and has aroused conflicts between the individuals, business and governments concerned with it. This is true particularly of the oil industry in the Middle East. Among other things, during the past fifty or more years, the rivalry for coveted oil concessions in the area helped to intensify the political and economic rivalries of various foreign governments. Because of the industry's association with the colonial past and its inevitable involvement with the foreign policies of the Western nations, it has usually symbolized "imperialism" to the people of the Middle East. Recent rising nationalism and new found sovereignty have made the oil-rich nations of the area more aware of the potential of these wealthy resources and in turn more suspicious of foreign producers. In Iran, the feeling against the foreigner ran rampant, leading to expropriation and nationalization of the industry, as well as to economic disaster for a time. However, in Iraq, the area of this study, a compromise was effected recently which permits the government to share as an equal partner with the foreign oil companies in the profits of the industry's local operations. This new relationship between the Iraq government and the oil industry offers fruitful ground for examination of some of the aspects of direct foreign investment in underdeveloped countries. This study is concerned with Iraq's evolvement to its present status as a co-partner with the foreign oil investors and the economics advantages that have accrued to the country from the development of its oil resources.