Iran, Iraq explore non-oil economic ties

Central Bank officials signed a memorandum of understanding in Baghdad earlier this week.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  March 24, 2016 at 8:18 AM
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BAGHDAD, March 24 (UPI) -- The Iranian government aims to boost its non-oil trade relationship with neighboring Iraq, a visiting delegate said during a trade visit to Baghdad.

The official Islamic Republic News Agency reports Kamal Kharrazi met in Baghdad with Humam Hamoudi, the vice speaker of the Iraqi Parliament, to review shared efforts to cut the dependence on oil revenues.

"Hamoudi welcomed Iran's experience in managing the non-oil economy saying Iraq is after substitution oil revenues with alternative sources of income," the news agency reported.

Central Bank officials from both sides met in Baghdad earlier this week to discuss ways to bolster broader non-oil economic ties. Iran's Central Bank Governor Valiollah Seif signed a memorandum of understanding Wednesday with his Iraqi counterpart, Ali al-Alagh, related to a joint banking committee.

Though sanctions relief means more Iranian oil on the market, the Iranian government has tried to make its economy less dependent on oil for revenue. Moody's Investor's Service in February said the Iranian economy is more diverse than other oil exporters in the region. Working under the pressure of Western economic sanctions meant Iran had to retool its economy and adapt to lower oil revenues before crude oil prices started their swift decline from $100 per barrel, the credit-rating agency said.

For Iraq, the International Monetary Fund warned the country is facing twin economic shocks in the form of the national security threat posed by the Islamic State terrorist group and the steep decline in crude oil prices.

Conflict, the IMF warned, was hurting Iraq's non-oil economy because of trade disruptions, a loss of investor confidence and the destruction of infrastructure.

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