The weak rule of law and high levels of corruption have further damaged the already crippled economy. The country lacks the legal security, a strong civil society, a vibrant media and active pressure groups, which could influence and shape politics.

The federal government attempts to achieve economic reform in the oil and non-oil sectors have been undermined by high levels of corruption. The private sector remains small and weak. Insecurity and political instability in the past have prevented the development of private business and foreign investment, making the country highly dependent on the public sector.

Through dialog and active diplomacy, Iraq has opened channels with Saudi Arabia without antagonizing Iran and maintained good terms with Iran without antagonizing the United States.

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