With a budget languishing in parliament, crucial reforms on theback burner and a hamstrung private sector, prospects for Iraq's economy afterWednesday's election hinge heavily on the oil factor.Iraq has some of the world's largest deposits of oil and gas and aims to boostenergy production dramatically, but a slow-moving bureaucracy and poorinfrastructure are holding it back.Complicating things further is Baghdad's long-running dispute with the energy-richautonomous northern Kurdish region, which has sought to sign deals with foreign firms and export without the express permission of the central government.Any new government formed after Wednesday's parliamentary election will have itshands full with these and other challenges.Crude oil accounts for more than 90 percent of exports and government revenues,and 70 percent of gross domestic product, according to the International MonetaryFund.Despite calls for Iraq to do more to diversify its economy, oil still fuels the country's attempts to rebuild after decades of conflict."What Iraq should be focusing on is actually developing something more diverse aan economy that's less dependent on oil production," said Ayham Kamel, MiddleEast and North Africa Director for Eurasia Group consultancy."The challenge here is, given the security environment, it's very difficult to achievethat."Only one percent of Iraq's workforce is employed in the oil sector but the industryindirectly supports countless others, with revenues in particular helping to paysalaries in the public sector.Meanwhile private firms, outside the oil sector, often complain they are hamstrungby an ageing banking system, with few loans available and outdated laws that makeit hard to set up or maintain a business.Rampant corruption and soaring costs due to electricity shortages and deterioratingsecurity also complicate running a business in Iraq, which is mired in its worstperiod of bloodshed in years."Iraq’s economy suffers from structural weaknesses," said a World Bank report. It noted that although the oil sector was delivering strong growth, overall economicexpansion "has not been broad-based enough to make major inroads on povertyand exclusion.""Poor governance, an inefficient and easily co-opted judiciary system, inconsistentregulations, and security issues keep Iraq at the bottom of global rankings fordoing business," the report said- 'Ambitious' oil goals -That leaves oil at the centre of any discussion about Iraq's economic challenges."The priorities (for a new government) would be dealing with the same problemsthat are holding the oil sector back," said Ruba Husari, editor of the websitewww.iraqoilforum.com.Husari cited "the bureaucracy, the bottlenecks in infrastructure, the shortages in gasthat are forcing the current government to import natural gas from neighbours" aswell as disputes with the Kurdish region over energy exports.She said Iraq's political parties had few differences on energy policy."But it would make a difference if they were to propose technocrats among theircandidates to fill the next government's portfolios."Most of Iraq's oil fields are concentrated in the predominantly-Shiite south of thecountry, though significant deposits can also be found in the northern Kurdishregion as well.Exports hit 2.8 million barrels per day in February, the highest figure in decades,with production above 3.5 million bpd.The authorities, however, aim to expand production capacity to nine million bpd by 2017, a target the IMF and International Energy Agency have warned is ambitious.That would increase the energy sector's share of the economy even further and,some fear, delay reforms to the broader economy."We have not reaped any benefits, or attracted investment, or established industryand there is no real agriculture," said Issam al-Faili, professor of politics atBaghdad's Mustansiriyah University."Unfortunately, over the years, the political elite were either lazy or did not findsolutions, or did not have the ability.