Productive economy

1. Executive Summary

Iraq faces a conceptual danger before a sectoral shortfall: equating “non-oil” with “productive”. Not every dinar generated outside oil extraction proves economic independence. Private activity may be profitable yet depend mainly on oil-financed government purchases, salaries and funding; trade may be large yet recycle imports rather than expand domestic value added. This chapter therefore adopts a stricter definition: the productive economy is the part that turns labour, capital, resources and knowledge into sustainable market value, raises productivity, deepens domestic linkages and serves private or external demand that does not automatically disappear when oil expenditure contracts.

The baseline does not support the claim that Iraq “produces nothing”. Official national accounts for 2024 recorded GDP at market prices of 327.6 trillion dinars, household consumption expenditure of 168.7 trillion, government expenditure of 80.6 trillion, gross fixed capital formation of 52.2 trillion, and goods and services exports of 144.6 trillion against imports of 135.9 trillion. Calculated from published current-price values, fixed capital formation equals approximately 15.9% of GDP at market prices—a derived diagnostic ratio, not a separate official indicator. ¹

The activity composition shows, however, that transformation is not about adding a factory or farm in isolation. In the published constant-price series for 2024, manufacturing recorded 13.46 trillion dinars; agriculture 13.35 trillion; transport, communications and storage 35.86 trillion; wholesale and retail trade and hotels 28.94 trillion; and banking and insurance 5.43 trillion. These must not automatically be summed into a “productive-economy share”, because definitions and components differ, but they identify value-chain links that can deepen. The current series also differs methodologically from some baselines established in the preceding chapter. This chapter therefore uses the current values only to analyse activity composition, not to recalculate the previously established oil share before statistical reconciliation.²

In industry, the Statistics Authority reports 916 operating large industrial establishments and 129,177 workers in 2024, with production valued at 17.232 trillion dinars, production inputs at 8.804 trillion, and sales at 15.469 trillion. This is a real base, but covers large establishments rather than all Iraqi manufacturing. In the labour market, the latest available in-depth national survey remains the Labour Force Survey 2021, recording high informal-employment levels: 98.1% in agriculture, 88.9% in industry broadly defined, and 52.9% in services. Raising output is therefore insufficient if firms and jobs remain outside formalisation, protection and regulated financing. ³⁴

In tourism, the 2024 hotels and accommodation-complex survey records 5.155 million guests, heavily concentrated in Karbala and Najaf. Together, the two governorates account for approximately 69.5% of recorded guests, a ratio derived from survey tables. Iraq thus has a real visitor base, but measuring tourism through hotels or visitor numbers alone is insufficient. Productive value is what stays in the economy through accommodation, transport, food, retail, crafts, financial and cultural services. ⁵

In the digital economy, Iraq has a relatively broad user base: the International Telecommunication Union places internet use at 81.5% of individuals in 2024. The Central Bank launched the Financial Inclusion Strategy 2025–2029 and continued developing and regulating digital payments in 2026. Yet the official sources used here provide no defensible published national baseline for the “digital economy's” GDP share. The chapter therefore prohibits inventing one. Measurement begins with a digital statistical account/framework distinguishing digital infrastructure, firms' technology adoption, and marketable digital goods and services. ⁶⁷⁸

The implementation argument is that Iraq needs a system connecting sectors before it needs a separate sectoral policy for every ministry. A factory requires inputs, quality standards, energy, logistics, finance, demand, suppliers and skills. A farm needs water, productivity, storage, sorting, food processing, transport and markets. Tourism requires a complete visitor journey, not an isolated hotel. The digital economy raises productivity across these chains and can itself become an export sector. The vision therefore rests on value chains, not a project list.

The vision proposes seven cross-sector programmes: productive-economy accounts; value-chain compacts; supplier development and quality infrastructure; a productive-infrastructure gate; productive-finance instruments; enterprise and market digitisation; and the visitor economy. This package creates no new supreme authority. The Ministry of Planning integrates the portfolio into development planning; the Statistics Authority owns measurement; sectoral ministries implement interventions; the Central Bank regulates finance and payments; and governorates connect projects to spatial advantages. This aligns with the monitoring, indicator and IDMS services the Ministry of Planning is already developing, reducing the risk of adding another agency before repairing existing functions. ⁹

Numerical targets are used only where a defensible official basis exists. Examples are the National Development Plan 2024–2028 targets: raising agriculture's contribution from 2.4% to 2.9% and manufacturing's from 1.8% to 2.2% under the plan's baseline, with private-sector participation of approximately 34.8% of total investment during the plan period. These ratios are not mechanically extended to 2035 or 2045. After 2028, targets are recalibrated using new actual data, because transformation is measured by productivity, domestic value, jobs, exports and resilience—not sector shares alone. ¹⁰

2. Chapter Boundaries and Operational Definitions

2.1. What Does This Chapter Accomplish?

• Defines the productive economy in measurable terms, distinguishing it from mere non-oil activity or higher sales.
• Builds a baseline through national accounts, labour markets, industry, tourism and the digital economy, explicitly identifying measurement gaps.
• Explains the functions of industry, agriculture, productive services, tourism and the digital economy within one system.
• Sets criteria for selecting value chains and productive regions without declaring a predetermined list of winning sectors.
• Builds horizontal programmes, an implementation matrix, indicators and transformation phases through 2045.

2.2. What Is Left to Subsequent Chapters?

2.3. Operational Glossary

3. Iraq's Baseline: What Does the Non-Oil Economy Actually Produce?

3.1. Demand and Investment: A Large Economy, but the Direction of Capital Is the Question

The 2024 national accounts show a domestic economy theoretically large enough to support a broader production base. Household expenditure of 168.7 trillion dinars signifies a large domestic market; government expenditure of 80.6 trillion indicates the state's weight in demand; fixed capital formation reached 52.2 trillion. Investment volume, however, does not establish quality. A road lowering food-chain transport costs, an accreditation laboratory opening an export market, or reliable electricity for a production zone affects productive capacity more than an expensive, underused asset. This chapter therefore inherits the preceding chapter's “public-investment quality gate” as a condition and adds a test: does the asset build a viable value chain?¹¹

Methodological note: ¹². The 15.9% ratio is calculated from 52.1889 / 327.6014 and is not a separately published indicator.

Capital formation must also not be confused with productive private investment. National accounts combine assets from multiple institutions and sectors, while transformation seeks a larger share of capital building competitiveness and calculated commercial risk-taking outside the budget cycle. The National Development Plan expects government participation of 65.2% and private participation of 34.8% of total investment in 2024–2028. These are planning targets/assumptions, not final achieved results. The Ministry of Planning continued building the plan's indicator and monitoring system in 2025. ¹³¹⁴

3.2. Activity Structure: Where Are the Value-Chain Links?

Methodological note: ¹⁵. Values are from the Statistics Authority's 2024 series. These activities are not summed into a “productive-economy share” because the classification does not match the chapter's operational definition.

3.3. The Labour Market: A Job Is Not Synonymous with Productivity

The Labour Force Survey 2021 remains the latest published, integrated and detailed national baseline used here. Statistics Authority materials in 2026 indicate a new national labour-force survey is being designed. The 2021 data therefore describe structure, not conditions in 2026 or 2027. ¹⁶¹⁷

Methodological note: ¹⁸. Total employment in the survey is approximately 8.6 million. These are 2021 figures and cannot be projected onto subsequent years without an updated survey.

The type of economic relationship matters more than worker distribution. Informal employment was 98.1% in agriculture, 88.9% in “industry” under the survey's broad definition, and 52.9% in services. This creates an economy that may indeed produce but faces a growth ceiling. Firms without regular accounts, worker protection, banking relationships or quality standards struggle to enter large supply chains, borrow working capital, invest in machinery or document productivity. Formalisation is not a bureaucratic end; it becomes growth infrastructure when simple, fair and linked to clear benefits. ¹⁹

3.4. Existing Industry: Evidence of Capability, Not Completeness

Large industry provides a tangible baseline. In 2024, the Statistics Authority counted 916 large industrial establishments and 129,177 workers, with output of 17.232 trillion dinars, inputs of 8.804 trillion and sales of 15.469 trillion. The arithmetical difference between output and inputs is approximately 8.428 trillion dinars, but is used here only as an approximate descriptive indicator, not official national value added: establishment surveys differ from national-output accounts in concept and coverage. ²⁰

These figures reject two misconceptions simultaneously. First, Iraq lacks a manufacturing base: establishments, workers and output do exist. Second, their mere existence means an industrial system exists. The decisive questions are the domestic-input share, supplier depth, the number of firms able to pass international quality tests, the share of working capital financed through banks, and the value retained in Iraq after imported materials, technology and services are deducted. These measurement questions feed into Programmes One and Three, while detailed industry and instrument selection is left to the next chapter.

3.5. Tourism and the Digital Economy: Existing Bases, Incomplete Accounts

The 2024 hotels and accommodation-complex survey recorded approximately 5.155 million guests. Karbala alone recorded nearly 2.398 million and Najaf 1.184 million, together approximately 69.5%, calculated from the governorate table. This establishes a strong religious/pilgrimage advantage but cautions against reducing tourism to arrivals. Visitor value spans accommodation, transport, food, retail, services, crafts and events. A tourism account must connect spending, value added and employment rather than count hotels alone. ²¹

Internet use reaching 81.5% of individuals in 2024 shows that the digital-economy problem is no longer simply “getting online”. The Central Bank launched the Financial Inclusion Strategy 2025–2029 and continued working with electronic-payment companies and regulators in 2026 to expand digital payments and regulate applications and platforms. Digital diffusion, however, does not equal digital production: a connected society may consume more foreign applications than marketable Iraqi services it creates. Iraq therefore needs separate measurement of digital production, firms' technology adoption and digitally exported services. ^22232425

4. From a Sector List to a Value System

4.1. Why Does “Each Sector on Its Own” Fail?

The Ministry of Industry can support a factory, Agriculture improve a crop, Transport build a road, the Central Bank regulate finance, and a governorate allocate land. Yet the product reaches its market only if these decisions meet at the same time, place and standard. A common failure in transforming economies is not always the absence of a good project, but disconnected links: an industrial zone without reliable electricity, a farm without refrigeration, a loan without a market, an investor without a domestic supplier, or a hotel without a visitor experience beyond its door.

The planning unit therefore shifts from “project” to “value chain”. A project asks what to build; a chain asks what prevents a group of firms from converting an input into value someone will pay for. This prevents industrial, agricultural and tourism policies becoming infrastructure lists, while also preventing the vision becoming central selection of products from a government office.

4.2. The Value-Added Ladder

The rule is not “do everything locally”. Some inputs and technology will remain more efficiently imported, and Iraq lacks an advantage in some chains. Domestic depth is desirable when it creates learning, productivity and resilience at competitive prices. High local-content requirements without capability and quality may instead raise costs and protect weak products. Measure the value Iraq captures, not the number of items labelled “local”.

4.3. The “Productive or Revolving Around Rent?” Test

4.4. Value-Chain Selection Criteria

This chapter does not select “winning sectors”, because that requires more precise data, market studies and sector-chapter policies. It establishes ten criteria making selection auditable:

• Measurable domestic, regional or global demand
• An advantage in domestic inputs, location, knowledge or demand base
• Potential to raise value added and productivity, not merely sales
• The chain's ability to create skills and private-employment pathways
• Water and energy use and environmental effects within Iraq's capacity
• Feasible backward and forward linkages with domestic suppliers
• Scope to scale and attract private capital without permanent protection
• Resilience to trade, climate and energy shocks
• Logistical and standards capability to reach markets
• Potential for technological and managerial learning and knowledge accumulation transferable to other chains.

5. Industry: An Engine of Transformation, Not a Factory List

Industry's function in a productive economy is to turn materials, energy, knowledge and inputs into higher-value products and create demand for engineering, maintenance, logistics, finance, quality and suppliers. Its economic contribution can therefore exceed the factory's own output value. The National Development Plan assigns manufacturing a clear role and targets—under its baseline—an increase in manufacturing's contribution from 1.8% to 2.2% by the end of 2028. The Ministry of Planning has also linked diversification programmes to industries with comparative value and infrastructure directly connected to productive sectors. ²⁶²⁷

GDP share alone is insufficient. If it rises because of high protection, costly imported inputs or guaranteed government demand, industry may expand without becoming more competitive. The subsequent manufacturing chapter therefore measures four layers: firm productivity, domestic value after inputs, supplier depth and market access. This chapter establishes only the design rule: industry is not a “public or private factory”, but a system of production, suppliers, services, standards, finance, energy and logistics.

6. Agriculture and Food Chains: From Producing Crops to Producing Value

Agriculture is not a modern productive sector when measured only in tonnes or land area. Output may rise while farm income remains weak because of post-harvest losses, poor storage, price volatility or absent sorting and processing. Ill-judged expansion may also consume more water for less value. Iraq 2045 therefore shifts the agricultural question from “How much do we produce?” to “How much value, food and income do we produce per cubic metre of water, dunam of land and hour of work?”

The National Development Plan 2024–2028 targets an increase in agriculture's contribution from 2.4% to 2.9% under its baseline and includes irrigation efficiency among sectoral objectives. Iraq Vision 2045 does not mechanically extend this ratio: agriculture's GDP share may fall while farm productivity rises substantially as other sectors grow faster. Better indicators are water, labour and land productivity, farmer income, losses, the share of output entering organised storage/processing/marketing chains, and domestic food competitiveness within water-security constraints. ²⁸

This perspective connects agriculture to industry and services. A refrigeration company, market platform, food-safety laboratory or refrigerated transporter may raise farm income more than expanding cultivated area. Agricultural policy becomes value-chain policy, not primary-production policy alone. Crop selection, irrigation technologies and food- and water-security priorities are left to Chapter Four, where economic value can be balanced against the water budget and climate risks.

7. Productive Services: Production's Invisible Infrastructure

The most overlooked element in Iraq's diversification debate may be the services making other sectors competitive. A factory without precise maintenance, insurance, finance, fast clearance or management software purchases those capabilities abroad or operates without them. A farm lacking storage, marketing and quality loses part of its crop or sells it as raw material. Tourism without booking, payments, transport and a digital experience leaves part of visitor spending outside the formal market. Transport, finance, professional, technical and digital services are therefore not an “appendix”; they are the shared productivity layer.

Trade itself requires distinctions. Reselling an imported good adds domestic value through storage, distribution, finance and customer service, but does not make the entire price Iraqi production. This is why value added is central: it prevents sales volume being equated with value created domestically.

Nor does the vision describe public education and health jobs as unproductive; they build human capital and have dedicated parts. Here, the purpose is to identify services directly involved in production and markets so economic policy does not remain confined to “agriculture and industry” while forgetting what makes both competitive.

8. Tourism and the Visitor Economy: From Arrival Counts to Value Retained in Iraq

Iraq has advantages needing no invention: religious cities receiving millions of visitors, a distinctive civilisational heritage, and cultural and spatial landscapes supporting varied visits. Turning these into a productive economy requires measuring success beyond visitor numbers. Visitors who stay briefly, pay cash outside the system, use poor transport and buy imported goods may leave far less domestic value than fewer visitors whose spending journeys connect to formal Iraqi businesses and quality services.

The 2024 hotels and accommodation-complex survey records 5.155 million guests, concentrated in Karbala and Najaf. The official indicators page lists 1,531 hotels and accommodation complexes and revenues of approximately 303.8 billion dinars within that year's survey framework. The Statistics Authority is updating tourism-survey frames, so 2024 figures must not be mechanically compared with earlier years without examining frame changes. More importantly, hotel revenue is not all tourism output. ²⁹

The proposed visitor-economy programme creates no new authority. It brings data and experience together around the visitor's journey, linking service infrastructure with private businesses, standards and payments. Detailed urban and transport infrastructure remains in the relevant themes. Tourism is not turned into spending on hotels without established demand, quality and operation.

9. The Digital Economy: A Productivity Layer and a Sector Simultaneously

Three commonly confused things must be separated: digital connectivity, digitising the traditional economy, and producing digital goods and services. Internet access enables activity; online shops or payments constitute digitisation; developing software, cloud services, digital design or professional content sold to domestic or foreign clients is direct digital production. These distinctions matter because relatively high internet use does not automatically mean Iraq captures comparable digital value.

Methodological note: ^30313233. “Unavailable” means the chapter's adopted sources provided no unified national measure; it does not mean the value is zero.

Digitisation affects the productive economy by reducing transaction costs and improving visibility within firms. Electronic invoicing, digital payments, inventory management, logistics tracking, enterprise-resource planning, agricultural data, tourism booking and supplier services make flows measurable, financeable and auditable. Policy fails, however, when it measures “system numbers” instead of process time, cost, errors or firm sales after digitisation.

This chapter should not repeat the technology part or preceding cybersecurity chapter. Data security, AI, computing infrastructure and digital sovereignty have their places. Here, the digital economy is a productivity instrument and a tradable-services channel, requiring a statistical baseline before numerical targets for its GDP or export share.

10. Sectoral and Spatial Linkages: Where Does Production Happen?

The productive economy is not evenly distributed across the map and should not try to be. Governorates differ in water, land, demand, universities, border crossings, airports, raw materials, religious visits and markets. The National Development Plan itself relies on comparative advantages in agriculture, industry and tourism and developing new growth corridors. The vision's role is not to impose a single specialism on a governorate, but to identify advantages and connect them to infrastructure, services and markets, without using “advantage” to freeze a governorate in low-productivity activity. ³⁴

This map needs spatial data linked to investment and performance. The Ministry of Planning uses IDMS to monitor projects and connect authorities. Adding a “productive-chain tag” and a “project impact on bottlenecks” field to existing systems is therefore preferable to a separate platform. A road, power station or water project can then be assessed: which chain does it serve? How many firms connect to it? What capacity increase or cost reduction is expected? Are cheaper alternatives available? ³⁵

11. Private Firms, Productivity and Formalisation

11.1. From “Supporting the Private Sector” to Strengthening Firm Capability

“The private sector is an engine of growth” is insufficient. It is not a single bloc: small retailers, informal workshops, public-contract-dependent contractors, large factories, software firms, commercial farms and logistics companies are all private but face different incentives and capabilities. The vision measures transformation by what happens inside firms: can they register easily, obtain electricity, water and digital services, finance working capital, meet standards, hire skills, contract with larger firms, and sell beyond their governorate or Iraq?

Policy must therefore not be reduced to loans or exemptions. Financing a firm without a market, accounts or management capacity becomes a credit problem. A general tax exemption reduces the state's costs without guaranteeing learning or productivity. Better policy removes a specific bottleneck in return for a measurable outcome: quality accreditation, a qualified supplier, new private investment, documented sales growth, an export contract or cost-reducing digitisation. This philosophy underpins the chapter's proposed value-chain compacts.

11.2. Formalisation: A Gateway to Growth, Not a Penalty on Small Firms

High informality means formalisation must offer value. If it means only fees, reports and complexity, firms will remain outside. If it means a bank account, contract protection, worker social security, access to tenders or supply chains, financing, qualification and standards, incentives change. Supplier-development and digital-transformation programmes therefore connect simplification to practical benefits, with gradual, fair enforcement preventing the state rewarding rule avoidance at compliant firms' expense.

12. International Comparative Lessons: Transfer the Mechanism, Not the Country

12.1. Viet Nam: Exports Are Insufficient if Domestic Value Remains Shallow

Viet Nam offers a useful lesson because it reveals success and a problem simultaneously. The World Bank report “Viet Nam 2045: Trading Up in a Changing World” states that foreign firms account for approximately 73% of exports, while domestic firms' participation in global value chains fell from 35% to 18% between 2009 and 2023. The report therefore emphasises connecting domestic firms to exporters through a better business environment, digitisation, supply-chain finance and supplier-development programmes. ³⁶

The mechanism suits Iraq: investment or exports are not the chain's endpoint; Iraqi firms must develop around them, learning, supplying and providing services. What does not transfer is the degree of openness, labour model or dependence on export manufacturing itself. Iraq has a large domestic market, resources and a different location; some chains may begin with competitive import substitution or regional services before becoming broad export platforms.

12.2. Morocco: Infrastructure, Skills and Industrial Zones Must Move Together

The OECD Investment Policy Review of Morocco 2024 describes industrial diversification linked to logistics and connectivity infrastructure, economic zones, incentives, finance and skills training, contributing to growth in automotive, aerospace, electronics, food industries and cross-border services. The lesson is not to build a “free zone” and wait for industry, but to combine instruments around real demand and investment, supplier chains and market access. ³⁷

What transfers to Iraq is the requirement for connection and discipline: every zone or incentive must link to investment, production, suppliers, employment and learning, with review terminating privileges when outcomes fail. Sector or incentive choices themselves do not transfer; Morocco's geography, agreements, markets and constraints differ.

13. The 2045 Vision and Transformation Phases

13.1. The Target Economy

By 2045, Iraqi economic strength is measured not only by oil's reduced share, but by non-oil growth becoming less dependent on public-spending volatility, rising worker and firm productivity, and connections among industry, agriculture, services, tourism and the digital economy through suppliers, standards, finance, logistics and data. Oil should become a strategic input, financing source and production activity within a broader economy, not the source determining every other activity's pulse.

In this model, the state neither chooses every project nor withdraws entirely. It builds the general foundation, identifies bottlenecks, finances beneficial public infrastructure, protects competition and contracts, regulates markets, produces data and coordinates interventions where a collective chain problem cannot be solved by one factory or farm. Capital, operations and commercial innovation gradually shift to firms bearing profit and loss under clear rules.

13.2. Phase One: 2027–2030 — Measurement and Removing Bottlenecks

The priority is not dozens of funds and zones, but operational truth. A productive-economy dashboard is built from national accounts, supply-use and input-output tables; the labour-force survey is updated; tourism and digital accounts begin; and a few pilot chains are selected by the chapter's criteria. Each chain identifies four or five bottlenecks repairable in a short period: standards, laboratories, energy inputs, transport, finance, skills or procedures. Infrastructure investments are linked to these bottlenecks through the preceding chapter's quality gate.

13.3. Phase Two: 2031–2035 — Expanding Networks, Not Isolated Projects

After pilot chains prove themselves, supplier development expands; digitisation moves from payment interfaces to operating systems and firms; and working-capital, invoice-finance and supply-chain-finance instruments become more widely used. Governorates begin spatial production portfolios tied to actual advantages, with periodic reviews preventing repeated industrial zones or identical projects without demand.

13.4. Phase Three: 2036–2040 — Upgrading to Higher Value

Priority shifts from capacity expansion to technology, quality, design and accompanying services. Successful chains move from primary products into components, professional services, software, standards and applied research. Foreign-market entry becomes more important, and export policy—addressed separately—is tied to product maturity rather than price support alone.

13.5. Phase Four: 2041–2045 — A Resilient, Productivity-Led Economy

The final test is a shock: if oil falls, a trade route is disrupted or drought occurs, does much private activity continue because it has multiple markets, financing sources and linkages? By 2045, productivity, learning and the ability to redirect chains should drive growth. Domestic value-added figures, private exports, digital and tourism services, and business income should matter more to decision-makers than government-spending totals alone.

14. Indicators and Targets Dashboard

The vision deliberately keeps the dashboard limited. Fifty indicators whose data owners are unknown have no value. Each indicator is classified as an available baseline, an existing official target, or a baseline to be created. Gaps are not filled with cosmetic numbers.

15. Implementation Programmes

15.1. Programme P1 — Productive-Economy Accounts

Problem: current data describe output, employment and establishments, but provide no single contemporaneous dashboard for domestic value, productivity, independent demand and linkages. Objective: make “diversification” measurable. Intervention: update input-output and supply-use tables on their cycles, connect them to labour-force surveys and establishment registers, and build tourism and digital measurement modules and a spatial value map. The Statistics Authority already owns this function and states that its National Accounts Directorate produces input-output tables every three years and supply-use tables every five. The task is better use and integration, not a parallel statistical agency. ⁴⁶

15.2. Programme P2 — Value-Chain Compacts

Problem: bottlenecks are spread across authorities, so no single minister owns them. Objective: select a limited number of chains using the ten criteria, then sign a 3–5-year government–private “outcome compact” identifying bottlenecks, responsible authorities, deadlines, indicators and firm commitments. It is not an open-ended grant: public support is linked to measurable outcomes and includes stopping or redesign provisions if demand and investment conditions are unmet.

15.3. Programme P3 — Supplier Development and Quality Infrastructure

Problem: small and medium firms may remain outside large-company contracts because of quality and management, not absent demand. Objective: qualify suppliers through gap diagnosis, managerial and technical training, accreditation and laboratories, supply-chain finance and pilot connections to anchor buyers. The programme begins with selected chains, not all firms, and measures actual contracts, sales and quality improvement rather than training-course numbers. Viet Nam illustrates why domestic-firm links to value chains remain central even in a successful export economy. ⁴⁷

15.4. Programme P4 — The Productive-Infrastructure Gate

Problem: major infrastructure may be in the wrong place or arrive at the wrong time for firms. Objective: add a value-chain test to public-investment appraisal: beneficiaries, demand, time/cost reductions, utilisation, operation and maintenance, and spatial impact. Passing projects enter chain-linked portfolios through IDMS rather than a separate list. This includes electricity, water, roads, storage and connectivity where they are bottlenecks, without turning this chapter into an infrastructure plan. ⁴⁸⁴⁹

15.5. Programme P5 — Productive-Finance Instruments

Problem: long-term investment loans are not firms' only need; the problem is often inventory, an invoice or a supply contract. Objective: expand working-capital finance, leasing where suitable, invoice/receivables finance, disciplined partial guarantees and supply-chain finance through existing financial institutions. The programme does not automatically create a development bank or guarantee loans without limits. Every public guarantee is recorded as a contingent liability and subject to the fiscal-policy chapter. ⁵⁰⁵¹

15.6. Programme P6 — Enterprise and Market Digitisation

Problem: many firms use the internet and phones while core operations remain cash-based, paper-based and unmeasurable. Objective: practical adoption packages—payments and invoicing, inventory, accounting, e-commerce, tracking and resource management—linked to productivity outcomes. The Central Bank's payments and financial-inclusion transformation provides an enabling foundation; regulators coordinate consumer protection, data and security; and the programme measures digitisation's effects on process time, cost, sales and finance access. ⁵²⁵³⁵⁴

15.7. Programme P7 — The Visitor Economy

Problem: visitor journeys span sectors and institutions without a unified value unit. Objective: build tourism accounts, journey maps, service standards, expenditure and payments data, and links between private investment and real demand. Begin with the existing religious-tourism advantage, then permit heritage, cultural, environmental and business products to diversify when markets and infrastructure are established, without imposing identical tourism projects on every governorate. ⁵⁵

16. Implementation, Cost and Financing Matrix

The chapter gives no aggregate cost because programmes differ and most investments are private or tied to sectoral projects not yet assessed for feasibility. Inventing one number would conflate data costs, quality laboratories, heavy infrastructure and private capital. Four financing categories are therefore used, with detailed estimates required when each programme/chain is designed.

The financing hierarchy begins by reorganising existing resources before requesting new money: (1) cancel or redesign public projects failing the quality gate; (2) use private capital where commercial returns exist; (3) reasonable laboratory or platform fees where users gain direct benefit; (4) international financing/technical assistance for capabilities; (5) direct public financing only for public benefit or established market failure. Every permanent commitment, guarantee or long-term operating subsidy follows the fiscal rules established in the preceding chapter and designed in V2-D04-C07.

17. Risks and Safeguards

The most important political-economic safeguard is preventing the “productive economy” from becoming cover for distributing privileges. Supporting production differs from supporting producers close to power. Every intervention must establish market failure or public benefit, define an outcome and review date, and be comparable with a cheaper alternative. Competition and new entrants must also be protected: a chain becoming a closed club loses its productivity incentive.

18. Governance, Data and Monitoring

18.1. No New Supreme Authority

Planning and monitoring structures already exist in the Ministry of Planning, alongside a Statistics Authority, sectoral ministries, a central bank, governorates and project-monitoring systems. The problem is integration and outcomes, not an absent institutional name. The productive-economy portfolio should therefore be managed within development-plan/vision monitoring, with an “outcome owner” for each programme and chain, not a permanent authority with overlapping powers.

18.2. The Mandatory Data-Gap Register

18.3. The Annual Decision Cycle

Publish a concise annual results dashboard, not a public-relations campaign: which chains were measured? Which bottlenecks were resolved? What private investment materialised? Which suppliers gained contracts? How did productivity and domestic value change? Which interventions were stopped because they failed? Publishing failure is part of a learning state: a project that cannot be stopped after its weakness is established becomes a new rent under diversification's name.

19. Conclusion and Bridge to the Next Chapter

The rentier state does not end through fiscal decisions alone. If Iraq restricts spending without building productive capability, it gains discipline without opportunities. If it pours money into “diversification” without productivity, linkages and markets, it reproduces rent in new sectors. This chapter therefore establishes a middle principle: the state converts temporary rent into public infrastructure and capability; firms turn inputs into value; services, finance, standards and data connect the process; and markets test whether value is real.

Iraq's productive economy in 2045 is a learning economy. Success is not industry or agriculture reaching one number. It is Iraqi firms producing higher value, developing suppliers and services around them, entering formal activity, finance and digitisation, broadening private and external demand, and chains better withstanding oil, water, energy and trade shocks.

This general architecture does not yet answer the harder industrial question: which transformations can Iraq actually build, in what order and with which instruments, without permanent protection or factories without markets? This chapter ends there, and V2-D04-C03 — “Manufacturing” — begins not with an industrialisation slogan, but by testing specific chains: petrochemicals, food, pharmaceuticals, construction materials and energy-related industries, against demand, value, resources, technology and exports.