Introduction: A Question That Changes Everything
In a recent article, an economist made a striking admission:
“Budget reform in Iraq has been stalled since 2009.”
At first glance, this sounds unbelievable. Why would a country rich in oil, resources, and international partnerships delay reform for more than a decade?
According to Jeff’s analysis, the answer is far simpler — and far more revealing — than most people realize.
They are waiting for the exchange rate to change.
Why Budget Reform Has Been Frozen for Over a Decade
It Was Never About Lack of Planning
Iraq has produced:
Budgets
Draft reform laws
Banking frameworks
Financial restructuring plans
So why hasn’t real reform happened?
Because budget reform cannot function properly without a tradable national currency.
As long as the Iraqi dinar remains restricted and non-international, meaningful reform remains impossible.
The Core Issue: A Non-Tradable Currency
Why Iraq Is Still Using the U.S. Dollar
Right now, Iraq’s primary tradable currency is the U.S. dollar, not the dinar.
This creates a fundamental problem:
Iraq cannot fully interact with global banking systems
Foreign currency exchange is limited
International settlements remain restricted
Sanctions complicate foreign transactions
Without a tradable dinar, Iraq cannot complete its financial transformation.
Banking Reforms and Foreign Currency Handling
What the Reforms Are Really About
A major component of Iraq’s banking reforms involves:
Foreign currency handling
International settlements
Cross-border transactions
Compliance with global banking standards
But here’s the catch:
If the dinar is not tradable internationally, banks cannot properly function within the global system.
This is why reforms appear stalled — they are paused, not abandoned.
Sanctions and the Waiting Game
Why Timing Matters
Sanctions and international oversight require:
Transparency
Stability
A recognized exchange rate
A currency that can move across borders
Iraq is essentially in a holding pattern, waiting for the moment when:
The exchange rate changes
The dinar becomes internationally tradable
Banking reforms can finally be activated
Until then, pushing reforms would be ineffective — or even dangerous.
Jeff’s Key Insight: Everything Hinges on the Rate
According to Jeff:
Budget reform
Banking reform
Foreign investment
International trade
all depend on one missing step.
A change in the exchange rate that allows the dinar to go international.
Without it, Iraq remains stuck using the dollar as a bridge currency — a temporary solution that cannot support long-term reform.
Featured Snippet: The Critical Insight
Iraq’s budget reform has been stalled since 2009 because the dinar is not yet tradable internationally, making full banking and foreign currency reforms impossible without an exchange rate change.
Why Reform Cannot Come Before the Rate Change
Sequence Matters
Many assume reforms should come first — but Iraq’s situation demands the opposite order:
Exchange rate adjustment
International tradability of the dinar
Activation of banking reforms
Functional budget reform
Full global integration
Skipping step one breaks the entire process.
Q&A: Breaking It Down
Q: Why hasn’t Iraq reformed its budget since 2009?
A: Because meaningful budget reform requires a tradable national currency, which Iraq does not yet have.
Q: What currency is Iraq actually using for trade?
A: The U.S. dollar remains the primary tradable currency.
Q: How does this affect banking reforms?
A: Banks cannot handle foreign currency or international transactions properly without a tradable dinar.
Q: Are sanctions part of the delay?
A: Yes. Sanctions require strict compliance that hinges on exchange rate stability and transparency.
Q: What unlocks the entire process?
A: A change in the exchange rate that allows the dinar to go international.
The Bigger Picture: Not Delay, But Design
This isn’t incompetence or neglect.
It’s intentional sequencing.
Iraq is holding back reforms until the monetary foundation is ready. Once the exchange rate changes, reforms that have been “stalled” for years can be implemented rapidly.
That’s why observers often say:
“Everything is ready — they’re just waiting.”
Final Thoughts
Budget reform, banking reform, and economic modernization in Iraq are not separate issues.
They are all tied to one central reality:
You cannot reform a financial system without a tradable national currency.
Until the dinar goes international, Iraq remains in waiting mode.
And that is exactly why budget reform has been stalled since 2009.
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Jeff
They announced in this article "An economist says budget reform has been stalled since 2009"
Why? They're waiting for the rate to change.
Part of the banking reforms have to do with foreign currency - handling and dealings...If the dinar is not tradable, which right now their tradable currency is the US dollar, they're not able to trade, interact and work with foreign currencies due to sanctions waiting for the rate to change, going international, having a tradable currency.