DOLLAR RISE, SALARIES CUT, AND NO FOOD RATIONS… EXPERT: IRAQ HAS BEGUN IMPLEMENTING THE “WHITE PAPER”
DOLLAR RISE, SALARIES CUT, AND NO FOOD RATIONS… EXPERT: IRAQ HAS BEGUN IMPLEMENTING THE “WHITE PAPER”
(Mnt Goat: It is important to remember that when in many of these articles they normally talk about ‘raising the rate” of the dinar they actually mean raising the sanctioned rate i.e. 1320 to 1440 and this is a devaluation. And when they normally talk about ‘ reducing the rate” of the dinar they actually mean lowering the sanctioned rate i.e. 1320 to 1166 and this is a revaluation)
On Friday, December 12, 2025, economist Nabil Al-Marsoumi spoke about the repercussions of the “White Paper” adopted by the International Monetary Fund and the World Bank to manage economic crises in developing countries, which Iraq has begun to implement.
In a blog post followed by Al-Jabal, entitled “The First Option for Economic Reform (The White Paper)”, Al-Marsoumi said that “the International Monetary Fund and the World Bank believe that economic crises in developing countries are caused by errors in macroeconomic policies in developing countries, and that correcting this requires making fundamental changes to these policies, even if it is at the expense of social goals and the poor.”
He added, “The economic reform package adopted by the International Monetary Fund consists of:
1. Reducing the exchange rate of the national currency and then floating it.
2. Raising the interest rate and setting credit ceilings.
3. Gradually reducing government subsidies for government goods and services.
4. Reducing public spending on goods and services.
5. Reducing the salary budget and limiting the appointment of graduates in government institutions.
6. Restructuring and privatizing loss-making public sector institutions.
7. Reducing social transfer expenditure items, particularly with regard to subsidizing the prices of essential food commodities.
8. Raising energy prices to the level of global prices.
9. Raising tax rates, increasing tax revenue, reorganizing and creating other tax bases, imposing direct taxes or policies related to indirect taxes, as well as increasing the taxpayer base, reducing tax exemptions, developing collection methods, and combating tax evasion.
10. Liberalizing all prices and trade.
Al-Marsoumi pointed out that
“Iraq actually began implementing the IMF reform program, under the banner of the White Paper in 2020, after the collapse of oil prices as a result of the spread of Corona and the closure of the global economy. The White Paper was supposed to implement the following measures:
1. Reduce the wage and salary bill from 25% of GDP to 12.5% within three years.
2. Restructuring the public sector salary scale by halting new recruitment and replacement processes in the public sector.
3. Applying income tax to employee allowances, incentives, bonuses, and other benefits.
4. Reducing total government support from 13% of GDP to 5% over three years, which extends from electricity and fuel fees to canceling the ration card and limiting it to those covered by the social protection network after its rationalization, which ultimately means higher prices for fuel, electricity and food, and consequently higher levels of inflation in the Iraqi economy.
5. Raising the exchange rate of the dollar against the Iraqi dinar, which actually happened in Iraq and which had a negative impact on the poor and even middle class in Iraq after the government raised the dollar exchange rate by 23% against the Iraqi dinar.
Al-Marsoumi concluded his post by saying: “In general, implementing the White Paper reforms entails a heavy social cost borne by the poor and those with limited income, and this will push us to publish another possible option that could be a national option for reform.