LONDON (AFP) - Iraqs war-ravaged economy has been hit hard by the global financial crisis, forcing the authorities to try and diversify away from the core oil business, Deputy Prime Minister Barham Saleh said Friday. The financial crisis has had a serious impact (on the Iraqi economy)... the plummeting oil prices really forced us to constrain our government spending, he told a think-tank in London. Saleh said Iraq had last month been forced to cut its overall budget by nearly a quarter to around 60 billion dollars and still projected a 20-billion-dollar (15-billion-euro) deficit. 2009, I expect that we will be able to manage it, but 2010 will be a difficult year because government surpluses would have been severely depleted by then. Oil prices have dropped from just above 145 dollars a barrel in March 2008, to around 50 dollars a barrel at present. He added, though, that the credit crunch had provided some rays of light for Iraq, because it was forcing the government to focus on economic reforms and diversification of the economy away from oil. Oil revenue is projected to provide 86 percent of state income in the coming year. This financial crisis... is forcing us to focus further on economic reforms, he said. We were very lax in the last two to three years in developing our oil sector.... Now this financial crisis is obliging us, is forcing us to improve oil production infrastructure. It is also obliging us to diversify our economy, he said, adding that particular focus would be placed on developing agriculture in Iraq. Saleh also stated that the top concerns for potential investors at the Invest Iraq 2009 conference in London a day earlier had been the countrys legislative framework and the security situation. The number one issue for investors was the legislative environment and some of the bureaucratic impediments that an investor would have to deal when they contemplate working in Iraq, he said. The second area of concern was the issue of security (was) whether these flare-ups in security is something serious and would make investors more reluctant. Though security has improved dramatically since sectarian violence between Shiites and Sunnis peaked in late 2007, bombings remain a daily occurrence, and official figures showed April was the bloodiest period in Iraq in seven months. Saleh and British Business Secretary Peter Mandelson signed an agreement promising stronger co-operation on a variety of economic, financial and technical issues at the investment conference on Thursday. They also pledged to better exchange information on economic issues, and set up a joint committee made up of officials in various ministries to help maintain close contact between the two countries private sectors. Last month, Mandelson led an official trade delegation, comprising 23 companies, to Iraq as part of a tour of the Middle East. British combat operations in Iraq officially ended Thursday.