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Australia and Iraq enjoy a warm and increasingly diverse relationship. Australia is a significant development assistance donor to Iraq and both countries are working to enhance the trade relationship. Australia and Iraq are represented bilaterally through Embassies in Baghdad and Canberra, respectively.
There is a sizeable Iraqi community in Australia. As at 30 June 2010, 48,694 people born in Iraq were living in Australia. In 2009-10 Iraqis were the second largest national group of entrants to Australia under Australia's Humanitarian Program.
Iraq is a federal constitutional democracy. The Head of State is the President (Mr Jalal Talabani). The Head of Government is the Prime Minister (Mr Nouri Al-Maliki), who is drawn, along with the Cabinet Ministers, from the Council of Representatives (CoR). Ministers forego their CoR seats to serve in Cabinet. The Iraqi people elect the 325 members of the CoR through an open-list, proportional representation electoral process. In the March 2010 elections 7 seats were specifically elected by Iraqis living outside Iraq, and another eight by minorities. Members serve four year terms. The Iraqi Constitution provides for the establishment of an upper house, the Federation Council.
There are 18 provinces in Iraq, including three provinces under the control of the Kurdish Regional Government (KRG), an autonomous regional government recognised under the Iraqi Constitution. The status of the neighbouring disputed areas around Kirkuk, Mosul and northern Diyala are yet to be resolved.
The formation of a democratic government in Iraq followed the overthrow of the regime of Saddam Hussein in 2003 by a United States-led coalition of forces, in which Australia participated. After Saddam's fall, the coalition established the Coalition Provisional Authority (CPA) which initiated the process for creating a new Iraqi constitution and holding elections. The CPA was disbanded on 28 June 2004, with sovereign authority for governing Iraq transferred to the Iraqi Interim Government. Based on the timetable laid out in the Transitional Administrative Law, the Interim Government governed Iraq until elections were held on 30 January 2005; thereafter the Iraqi Transitional Government assumed authority.
In May 2005, the Iraqi Transitional Government appointed a multi-ethnic committee to draft a new Iraqi Constitution. The new Constitution was finalised in September 2005, and was ratified in a nationwide referendum held on 15 October 2005. On 15 December 2005, Iraqis again went to the polls to participate in the first national legislative elections as outlined by the Constitution. The government took office in March 2006 for a four year term, and a Cabinet led by Prime Minister Al-Maliki was approved and installed in May 2006.
The second national elections were held on 7 March 2010. The Independent High Electoral Commission of Iraq (IHEC) estimated that 62 per cent of eligible Iraqis voted across the country. Australia was one of the sixteen countries where out-of-country voting took place. Final results were delayed due to legal processes, including a recount of 2.5 million votes in Baghdad and retroactive disqualification of about sixty candidates. IHEC announced the results of the Baghdad recount on 16 May and reported only minor discrepancies with the original vote count.
The certified results confirmed the provisional results released on 26 March which gave 91 seats in Iraq's 325-seat CoR to former Prime Minister Iyad Allawi's Iraqiya bloc, and 89 seats to Prime Minister Nouri Al-Maliki's State of Law coalition.
The inaugural session of the new CoR convened on 14 June 2010 but was suspended indefinitely pending discussions on the appointment of the Speaker, Deputy Speaker, President and Prime Minister. After a prolonged deadlock the CoR approved a new Government of National Unity, lead by Prime Minister Al-Maliki, in December 2010.
Since January 2008, the CoR has passed several significant pieces of legislation, which have helped strengthen political, social and economic reconstruction. However a number of controversial issues remain unresolved including proposed legislation to provide a framework for foreign investment in the oil and gas sector, and to establish a process for the distribution of oil revenue.
Following the overthrow of Saddam Hussein, Iraq witnessed widespread violence led by insurgent groups along sectarian lines, and against the coalition forces. Following a peak in the level of violence in 2006/2007, the security situation improved slowly due to a combination of ongoing political progress and the increased capability of the Iraqi Security Forces (ISF), under the guidance of coalition forces. These successes allowed coalition forces to progressively transfer primary security responsibility to the ISF.
In 2011, year-on-year inflation was (subject to review) 5.0 per cent. The Iraqi Dinar has replaced the US dollar as the main currency, and a functioning banking system and stock exchange now operate.
Iraq's growth rate in 2011 was 9.6 per cent, up from 0.8 per cent in 2010. Oil is critical to the Iraqi economy as it accounts for more than two-thirds of Iraq's GDP and almost all of its export revenue. Fluctuating world oil prices present particular challenges for the Iraqi economy and the national budget. Iraq's oil production reached 3.0 million barrels of oil per day at the end of 2011 and it is anticipated that this will increase to 3.4 million barrels per day by the end of 2012.
Australia has had diplomatic relations with Iraq in various forms since 1935. Australia opened an Embassy in Baghdad in 1976; Iraq established an Embassy in Canberra in 1995. After the closure of the Australian Embassy in Baghdad in 1991, and the closure of the Iraqi Embassy in Canberra in 2003, full diplomatic relations resumed when each Embassy reopened in 2004, following the transfer of authority from the CPA to the Iraqi Interim Government.
In June 2008, the Australian Government, in close consultation with the Government of Iraq, withdrew Australia's combat troops from Overwatch Battle Group-West in Iraq. Naval and air elements were briefly redeployed in December 2008. Following the withdrawal of personnel embedded in coalition headquarters, the Australian Defence Force's Operation Catalyst concluded on 31 July 2009.
A small number of Australian personnel remained in Iraq, with about 35 personnel providing security and support to the Australian Embassy in Baghdad until August 2011. With their withdrawal, Australia's military participation in Iraq formally concluded. Two Australian officers remain deployed with the United Nations Assistance Mission for Iraq. For further information on the Australian Defence Force's contribution in Iraq see the Department of Defence website () .
In March 2009, Prime Minister Nouri Al-Maliki visited Australia as a Guest of Government. As the first visit by an Iraqi Prime Minister to Australia, Prime Minister Al-Maliki's visit was of historic importance and signalled a new phase in the bilateral relationship. During the visit, Prime Minister Al-Maliki and then Prime Minister Kevin Rudd signed a declaration (http://pmrudd.archive.dpmc.gov.au/node/5261) agreeing to increase cooperation in six key areas and to enhance trade and investment ties. Memoranda of Understanding (MOUs) were subsequently developed on Agriculture; Resources and Energy; Trade Cooperation; Education, Training and Research; Public Health; and Security and Border Control.
Ms Julia Gillard, Deputy Prime Minister at the time, visited Baghdad on 27 June 2009 (http://ministers.deewr.gov.au/gillard/deputy-prime-minister-signs-six-memoranda-understanding-iraq) and signed the six MOUs with relevant Iraqi Ministers, in the presence of Prime Minister Al-Maliki. Substantial progress has been made in the implementation of each MOU.
Australia continues to support international efforts to assist Iraq's complex transition to a democratic society with an open market-based economy. Australia focuses its assistance on niche areas in Iraq where Australia has particular expertise and where progress can be made against the Millennium Development Goals (http://www.ausaid.gov.au/keyaid/mdg.cfm) .
Australia's aid program to Iraq is an important part of the bilateral relationship and integral to the implementation of the MOUs. The goal of the program is to improve the quality of life in Iraq by strengthening agriculture and governance sectors. It has totalled $360 million since 2003, in addition to US$850 million in debt relief. Total official Development Assistance for 2011-12 is estimated to be $36 million. Australia is also a major donor to programs that clear landmines and explosive remnants of war, educate children on the risk of mines and provide health services, training and business grants to victims.
For further information on Australia's aid program in Iraq see the AusAID website. (http://www.ausaid.gov.au/)
Historically, Australia's primary commercial interest in Iraq has been wheat, which it has exported to Iraq for over 50 years.
Australian bilateral trade with Iraq was valued at $327million in 2011, up from $79 million in 2010. The principal export was wheat, valued at $319 million.
The Australian and Iraqi Governments continue to work to broaden bilateral trade relations. In 2007, Iraq announced the opening of an Iraq Trade Liaison Office in Canberra and the appointment of a senior trade official to Australia. At the same time, Austrade continues to facilitate trade links between Australia and Iraq through its trade office in Amman. For further information on export opportunities in Iraq and the current trade environment see the Austrade website (http://www.austrade.gov.au/) .
Australia is committed to building comprehensive bilateral ties with Iraq. Australia actively supported Iraq's successful bid for observer status in the World Trade Organisation and will continue to assist Iraq to engage with the global economy.