10 years before the disaster... the Iraqi Finance Minister is fueling anger and fear

POSTED ON 2021-12-28 BY SOTALIRAQ


The Iraqi economy's dependence on oil has become a source of concern

The Iraqi Finance Minister, Ali Allawi, sparked a wave of widespread anger, after his statements about the layoffs of state employees, after 10 years, due to the demise of the oil era, in light of Iraq's dependence on it, in order to finance its financial budgets.

Allawi, a veteran financial expert, said in a press statement, " Oil  will collapse forever after 10 years, and Iraq will lay off its employees, due to the continued dependence on oil, which constitutes more than 90 percent of state revenues."

Although the Iraqi minister’s speech  included the necessity of diversifying the economy’s resources, resorting to non-oil resources, such as tourism, and reviving the private sector, it sparked a wave of widespread resentment among commentators and popular circles, not from the person of the minister; But the arrows of criticism went to the way the economy is managed in the country.

Iraq witnessed   a financial crisis in June 2020, as the government’s first borrowing took place with the aim of financing the salaries of employees and projects for a period of 3 months, and the crisis was renewed in September of that year, when the government was unable to pay salaries and was delayed 45 days, which prompted the House of Representatives to approve the second loan to the government .

white paper

Although the current government, headed by Mustafa Al-Kazemi, announced a major project to manage the economy in Iraq, in the medium and long term, within what was known as the “white paper”, but reaching this requires a long time and harsh measures.

The new plan included controlling border crossings, activating the agricultural sector, enhancing the investment environment, and reassuring foreign companies, through concrete measures, as well as reducing the dinar exchange rate, with the aim of encouraging local products.

Experts believe that the economic deterioration that Iraq is witnessing today is not a result of the moment, but rather began since the oil boom five decades ago, when the state relied on oil rents, and neglected the traditional basic sectors of the Iraqi economy, namely agriculture, industry and tourism.

Moreover, during the past years, Iraq witnessed mismanagement and militarization of society, which produced the current dire situation, at a time when the Iraqi economy was able to occupy a position among the strongest economies in the region.

In the same vein, the expert in Iraqi economic affairs, Sarmad Al-Shammari, believes that “the minister’s warnings are known to all, but the most important of them is the launch and establishment of a new phase, of stabilizing the pillars of the Iraqi economy, such as tourism, agriculture, and industry, and setting clear programs, to activate those aspects, which the current government has worked on in parts, but the issue needs more time.”
 
Al-Shammari added in a statement to "Sky News Arabia" that "the concern and the Iraqi public's interaction with the minister's statements are correct, and stem from the development of the citizen's ability to diagnose, understand the defect, and participate in decision-making."
 
He pointed to "the need to distance the economy from political problems and partisan disagreements, which have always obstructed development projects and canceled many of them."

defeat oil

Warnings escalated with the advent of cars powered by alternative energy, whether powered by solar energy or any other energy, which means that the demand for crude oil will decrease, which is what the countries of the region are preparing for through a number of projects in this path.

The Iraqi minister faced wide criticism, as activists blamed him for putting the country on the right track, and not only posing problems, which are often known to everyone.

The specialist in Iraqi political affairs, Fadel Abu Ragheef, called for solutions to be put in place to avoid any economic crisis that Iraq might face in the future.

And he said in a tweet to him, "The statements of the Minister of Finance show a dark future for the Iraqi economy. He spoke with disappointing numbers, and waved the emptiness of the country's coffers, and posed problems and did not put solutions in front of them."

He stressed that "his speech calls on the coming governments to seek the assistance of the best economists in the world, and we need to change our economy from rentier to open, and from importers to producers."

Iraq is on the brink of a “serious crisis”... Urgent intervention is required

As for the academic Ahmed Younis, he wrote, “I fully agree with the minister’s statement. The world is heading for a second path, and new policies, and we live on oil, which will reach the peak of global demand by 2030, and decline before 2050.”

So far, Iraq is still on the way to renewing its labor regulations in order to move away from what is described as inherited socialism, which dates back to the Baath Party era from 1968 to 2003.

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