Much of Iraq’s propaganda describes a state that has been bankrupted by UN sanctions. There is some truth to these claims, but they ignore the fact that much of Iraq’s current poverty is a result of the cost of the Iran-Iraq war and that Iraq could have obtained relief from the economic consequences of sanctions at any time by agreeing to the terms of the cease-fire or to UN resolutions that allowed it to export oil for food under conditions that ensured that the money was spent for the welfare of all of Iraq’s people and was not used to illegally import arms or serve Saddam’s ambitions. It is also important to note that Iraq’s military spending has steadily impoverished Iraq ever since the beginning of the Iran-Iraq War in 1980, and Iraq’s efforts to rebuild and sustain its massive military force structure has made its situation far worse since the end of the Gulf War.
Iraq has long treated its economic statistics as a propaganda weapon and manipulates them for domestic and foreign political purposes. It is important to note, however, that Iraq’s per capita income peaked just after the Iran-Iraq War began, because Iraq was able to exploit the rise in oil prices following the fall of the Shah. Iraq then had a per capita income in excess of $4,000 in 1997 US dollars, and it was spending about 34% of its national budget and 25% of its GNP on military forces.
By 1982, Iraq was spending over 70% of its budget and 45% of its GNP on military forces, and these spending levels were sustained until the end of the Iran-Iraq War in 1988. By that time, a massive drop in oil exports and the failure to develop the economy had cut Iraq’s per capita to around $2,200 dollars, or roughly in half. Iraq had exhausted its national savings and financial reserves and was a major debtor. It had neglected every sector of its economy—espe-