ularly on food and energy, continue to weigh down the economy,
and administrative controls, widespread corruption, and other
rigidities undermine the potential for private-sector-led growth. As
a result of these inefficiencies, significant informal market
activity flourishes and shortages are common. High oil prices in
recent years have enabled Iran to amass nearly $70 billion in
foreign exchange reserves. Yet this increased revenue has not eased
economic hardships, which include double-digit unemployment and
inflation - inflation climbed to 26% as of June 2008. The economy
has seen only moderate growth. Iran's educated population, economic
inefficiency and insufficient investment - both foreign and domestic
- have prompted an increasing number of Iranians to seek employment
overseas, resulting in significant "brain drain."

Iraq
Iraq's economy is dominated by the oil sector, which has
traditionally provided about 95% of foreign exchange earnings.
Although looting, insurgent attacks, and sabotage have undermined
economy rebuilding efforts, economic activity is beginning to pick
up in areas recently secured by the US military surge. Oil exports
are around levels seen before Operation Iraqi Freedom, and total
government revenues have benefited from high oil prices. Despite
political uncertainty, Iraq is making some progress in building the
institutions needed to implement economic policy and has negotiated
a debt reduction agreement with the Paris Club and a new Stand-By
Arrangement with the IMF. Iraq has received pledges for $13.5
billion in foreign aid for 2004-07 from outside of the US, more than
$33 billion in total pledges. The International Compact with Iraq
was established in May 2007 to integrate Iraq into the regional and
global economy, and the Iraqi government is seeking to pass laws to
strengthen its economy. This legislation includes a hydrocarbon law
to establish a modern legal framework to allow Iraq to develop its
resources and a revenue sharing law to equitably divide oil revenues
within the nation, although both are still bogged down in
discussions. The Central Bank has been successful in controlling
inflation through appreciation of the dinar against the US dollar.
Reducing corruption and implementing structural reforms, such as
bank restructuring and developing the private sector, will be key to
Iraq's economic success.

Ireland