🇮🇶 IRAQ ECONOMIC PLAN EXPLAINED: SIMPLE BREAKDOWN
Here is a clear and easy explanation of what the article says:
🔎 What is this article about?
It discusses an economic plan by the Iraqi government (led by Al-Zaydi) to deal with Iraq’s financial crisis.
The plan has three main pillars:
💰 1. Managing debt by selling or restructuring institutions
- The government proposes eliminating or selling state-owned institutions with heavy debt.
- This is intended to reduce the financial burden on the state.
- Economists warn this could lead to corruption or undervaluation of public assets.
👉 Simply put: they want to sell or offload state assets to quickly raise money.
💵 2. Changes in the dollar exchange rate
- A possible adjustment of the Iraqi dinar vs. the US dollar exchange rate is being discussed.
- In recent years, the rate has changed several times (1,180 → 1,450 → 1,300 dinars per dollar).
- This is important because it affects:
- salaries
- inflation
- the national budget
⚠️ Important: The text does NOT mention a strong dinar revaluation. It only refers to exchange rate adjustments.
👉 Simply put: they are considering changing the dollar rate to help balance the budget.
⚖️ 3. Recovering money stolen through corruption
- The government aims to recover funds stolen through corruption cases.
- It is estimated that up to $50 billion could be recovered if successful.
- This includes pursuing high-level officials and corruption networks.
👉 Simply put: trying to recover lost public money from past corruption.
🔗 Other key points in the article
🧩 Economy and security are linked
To attract foreign investment (U.S. and Gulf countries), Iraq needs:
- stronger state control over weapons
- reduced influence of armed groups
👉 Simply put: without security, there is no investment.
🏛️ Political debate
- The plan has political support, but also strong skepticism.
- Critics argue that selling assets could:
- increase corruption
- reduce the real value of public property
⚠️ Final summary
The article describes a government plan to address Iraq’s economic crisis through asset sales, exchange rate adjustments, and anti-corruption efforts, combined with political and security reforms.
📌 Key takeaway (Iraqi dinar context)
This type of reporting:
- ❌ Does NOT confirm a currency revaluation
- 📊 Focuses on exchange rate management and reforms
- 🏦 Is about fiscal stability, not a strong increase in the dinar’s value
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AL-ZAYDI’S THREE-PRONGED PLAN: LIQUIDATING INDEBTED INSTITUTIONS, RAISING THE DOLLAR’S VALUE, AND RECOVERING FUNDS FROM CORRUPT INDIVIDUALS!
THE FRAMEWORK APPROVES THE GOVERNMENT’S PLAN TO OVERCOME THE FINANCIAL CRISIS.
From the home of Ammar al-Hakim, leader of the “Wisdom Movement,” in Jadriya, a rare consensus emerged within the coalition. The ruling Shiite forces unanimously approved an economic vision presented by Prime Minister Ali al-Zaidi. This vision includes measures described as the boldest in years, beginning with the elimination of debt-ridden government institutions and extending to a review of the dollar exchange rate.
However, the path to these transformations does not pass through the Ministry of Finance alone, but rather through more sensitive issues: the proliferation of weapons, foreign investment, and the prosecution of high-ranking officials accused of corruption. These issues appear interconnected in the mind of the new government, which seeks to forge a different economic identity for Iraq.
Al-Zaidi, who sparked widespread controversy a few days ago by calling for a “departure from the socialist mindset,” is trying to present himself as the architect of a comprehensive economic project. His opponents and supporters alike describe him as the “billionaire prime minister” due to his extensive network of financial and commercial institutions linked to state partnerships.
Eliminating debt: a sale or a transfer of ownership?
According to informed sources who spoke to Al-Mada, the plan presented by the Prime Minister during a meeting on Monday evening focused in its first phase on addressing the public debt, which exceeds $83 billion both domestically and internationally.
Al-Zidi proposes transferring ownership of government-owned productive institutions that have accumulated debt, considering this a key way to alleviate the state’s financial burden.
However, he did not provide further details on this point, as information is being kept largely unavailable.
The latest data from the Ministry of Finance, as of the end of April, reveals that the total domestic debt exceeded 96 trillion and 629 billion dinars, equivalent to approximately $73.3 billion, while the external debt exceeds $10 billion.
Al-Zidi recently announced that he found only one trillion dinars in the state treasury when he assumed office, while his predecessor, Mustafa Al-Kadhimi, had previously asserted that he handed over the treasury to the subsequent government (the Al-Sudani government) containing approximately 100 trillion dinars.
This approach, however, is not without its early skepticism. Economic experts predict that the plan will effectively lead to the sale of state assets under the pressure of the financial crisis, a course of action that raises widespread concerns about transparency and the true value of those assets.
In this context, Nabil al-Marsoumi, professor of economics at al-Maqal University in Basra, warns that selling government assets could become a new avenue for waste rather than a tool for financial rescue, given the continued high levels of corruption and weak oversight of valuation and sale processes.
Al-Marsoumi tells Al-Mada that this option was also raised during the government of Mohammed Shia al-Sudani, and the discussions at that time were accompanied by the same warnings. He points out that the problem is not unique to Iraq,
but has emerged in the experiences of other countries plagued by corruption, with unfavorable outcomes.
He adds that the danger lies in the gap between the true value of the assets and the prices at which they might be sold, noting that a government institution might be sold for $25 million even though its actual value exceeds $100 million—a difference that could become a new source of corruption instead of being part of the solution.
In 2016, the government of Haider al-Abadi considered selling approximately 600,000 government properties, including more than a thousand palaces belonging to the former regime, to address the financial deficit resulting from the collapse of oil prices.
At that time, the parliamentary finance committee estimated to Al-Mada that this operation could generate up to $150 billion.
The dollar is back in the spotlight .
The most intriguing point in Al-Zidi’s plan concerns the exchange rate.
Sources speak of a proposal to raise the dollar’s value again, without disclosing the rate proposed by the Prime Minister during the meeting.
In 2023, Mohammed Shia’ al-Sudani decided to lower the exchange rate to 1,300 dinars per dollar and fix it at that level. According to estimates at the time, this decision cost the treasury approximately 15 trillion dinars annually, adding to the budget deficit, which was financed through borrowing, thus contributing to increased debt.
At the end of 2020, Mustafa al-Kadhimi’s government raised the official rate from 1,180 to 1,450 dinars per dollar.
It seems that revisiting the exchange rate issue was expected given the escalating financial pressures, especially after Foreign Minister Fuad Hussein’s statements about the state being forced to print 25 trillion dinars to meet its financial obligations, primarily salaries.
The new version of the “Ritz-Carlton” plan to address the deficit doesn’t stop at selling assets or adjusting the exchange rate.
Leaks suggest a third approach: recovering stolen funds from high-ranking officials accused of corruption, in a manner similar to the “Ritz-Carlton” campaign in Saudi Arabia several years ago. The first signs of this approach emerged with the arrest of Adnan al-Jumaili, during which authorities announced the seizure of dozens of properties, cash, and weapons.
In a significant development related to financial disputes, the Karkh Court of First Instance in Baghdad issued a ruling yesterday ordering former MP Jamal al-Karbouli to pay $4.5 million to the head of the Iraqi Red Crescent Society in his official capacity.
This development brings to mind the case of Nour Zuhair, the main defendant in what was dubbed the “theft of the century,” estimated at around $4 billion.
Meanwhile, political circles are circulating information about the possibility of referring ministers, undersecretaries, and senior officials to the judiciary. Some leaks even suggest the possibility of questioning al-Sudani himself, while his supporters deny these reports, describing them as part of a hidden power struggle within the coordination framework.
Estimates suggest that the state could recover approximately $50 billion if the campaign to pursue corruption succeeds. According to a report published by Al-Mada in 2020, the previous al-Kadhimi government attempted to reach settlements with political figures and parties accused of embezzling public funds, based on recovering half the stolen money in exchange for dropping the charges.
At the time, the prevailing belief was that imprisoning corrupt individuals alone would not generate any financial return for the state, especially since most of the accused possessed extensive experience in concealing and transferring funds.
This argument was based on previous estimates by former Finance Minister Ali Allawi, who stated that approximately $250 billion had been stolen from Iraq since 2003.
This sum was considered sufficient to build entire countries if properly invested.
The government at the time arrested about 20 officials, as part of the work of the anti-corruption committee formed by former Prime Minister Mustafa Al-Kadhimi.
According to leaks at the time, the detainees, including officials from economic bodies and airports, were held in the intelligence headquarters in central Baghdad and denied visits. This committee was later accused of torture and corruption.
Al-Zaidi had begun his term by forming a Supreme Council for Integrity, despite the existence of the Integrity Commission.
This move raised questions about whether it would accelerate anti-corruption efforts or simply add another layer of bureaucracy to the already complex administrative landscape. No to weapons… and goodbye to socialism!
But the most striking aspect of the new vision is the direct link between the economy and security.
The government is banking on attracting American and Gulf investments, the latter estimated at around $50 billion. However, this goal, according to circulating information, is contingent on establishing complete control over weapons and confining them to the state.
The government faces an obstacle in the form of the refusal of some armed factions to participate in the currently proposed integration plans.
During a meeting with governors last week, al-Zaidi stressed the importance of proceeding with the process of restricting weapons to state institutions, considering this step a fundamental entry point for supporting economic development and stimulating investment. In his Eid holiday address, al-Zaidi went beyond direct financial measures, announcing that his government was working to “draw a new economic identity for Iraq and move away from the socialist mindset.”
Al-Zaidi appears to want an economy more open to global investment, more reliant on the private sector, and less tied to the traditional rentier state. However, this proposal is not without political and economic objections. Critics argue that the problem lies not so much in the “socialism” of the Iraqi economy, but rather in the fragility of state institutions, the weakness of the private sector, and the prevalence of corruption.
World Bank reports indicate that Iraq is experiencing a state of “distorted capitalism,” with oil still funding more than 90% of the general budget, the private sector suffering from bureaucracy and a weak banking system, while the bloated public sector continues to drain resources. Amer al-Fayez, a leader in the Coordination Framework behind al-Zaidi
, revealed that the Prime Minister requested broad legislative support from Parliament during the last meeting, particularly regarding banking sector reform. He told Al-Mada that all previous governments had spoken about encouraging foreign investment, but the difference today lies in the greater security stability and the move towards changing banking policies.
Al-Fayez confirmed that the Coordination Framework endorsed the reform vision presented by Al-Zidi, and the political blocs pledged to push their representatives to support the necessary legislation for the project’s success. In the official statement following Monday’s meeting, the Framework announced its full support for the government “parliamentary, politically, and in the media,” emphasizing the need to expedite the completion of the cabinet and to support the proposed solutions for addressing the economic and electricity crises, as well as activating labor and social security laws.