MNT GOAT: Can Iraq End the Election Deadlock Soon?
Iraq remains stuck in a political deadlock, centered on whether former Prime Minister Nouri al-Maliki returns to power. His bid has deepened divisions within the Shiite Coordination Framework and drawn a stern warning from Washington regarding U.S.-Iraq relations.
Parliament has failed twice to convene sessions to elect a president and designate a prime minister, prolonging the government formation crisis.
The Maliki Factor in Political Paralysis
Disagreement over Maliki’s candidacy is the main cause of deadlock, not Kurdish infighting.
Sources indicate three proposed scenarios to end the standoff:
Persuade Maliki to withdraw in favor of a compromise candidate.
Move ahead with Maliki despite opposition (unlikely).
Extend the caretaker government while talks continue.
MNT GOAT warns that these scenarios are largely conversation pieces, with the real solution likely being the continuation of Mohammed Shia' Al Sudani for another term. Attempts to extend the caretaker government have been deemed unconstitutional, according to experts, highlighting the importance of a permanent solution to maintain political stability.
Central Bank of Iraq (CBI) Advances Banking Reforms
Despite political deadlock, the independent Central Bank of Iraq continues to implement major reforms:
Ali Al-Alaq, CBI Governor, revealed a “huge plan” to modernize Iraq’s banking sector over the coming years.
Citizens are urged not to rush to the market, despite temporary unofficial dollar price spikes.
The CBI maintains strong foreign reserves, ensuring the Iraqi dinar remains stable.
Key Initiatives:
Expansion of digital finance
Development of electronic payment systems (E-Passula, My Account projects)
Strengthening cooperation with Kurdistan Region
Improving transparency, efficiency, and public trust
MNT GOAT notes that progress continues in the banking sector despite election stalemates, signaling a gradual strengthening of Iraq’s financial infrastructure.
Kurdistan Region Cooperation
Masrour Barzani praised CBI reforms during meetings with Ali Al-Alaq and banking/digital wallet representatives.
Regional collaboration emphasizes active coordination between Baghdad and Erbil, ensuring reforms are implemented across Iraq.
SOMO’s Strategic Shift to Global Oil Trading
Iraq’s Oil Marketing Company (SOMO) is transitioning from traditional crude sales to global oil trading:
Objective: maximize revenue and take advantage of global market fluctuations.
Approach: proactively seek buyers and negotiate pricing strategies beyond traditional markets.
Potential Impact: could introduce other currencies for transactions and influence oil revenue streams.
MNT GOAT highlights that this is a strategic economic step, potentially strengthening Iraq’s fiscal position alongside CBI reforms.
Q&A Section
❓ Why is Iraq stuck in an election deadlock?
Disagreement over Nouri al-Maliki’s return as prime minister has blocked parliamentary sessions to elect a president and form a government.
❓ Are proposals to extend al-Sudani’s term constitutional?
No. Experts confirm that the 2005 Iraqi Constitution does not allow extending a caretaker government beyond its term.
❓ What banking reforms is the CBI implementing?
Digital finance expansion
Electronic payment system rollout (E-Passula, My Account)
Strengthened Baghdad-Erbil cooperation
Maintaining dinar stability and foreign reserves
❓ How is SOMO changing its oil strategy?
SOMO is moving toward global oil trading, negotiating prices and buyers internationally, aiming to maximize revenues rather than relying solely on traditional buyers.
Featured Snippet Summary
Iraq’s election deadlock is primarily caused by Nouri al-Maliki’s potential return.
Proposals to extend caretaker government are unconstitutional.
The CBI continues banking reforms under Ali Al-Alaq, maintaining dinar stability.
Kurdistan Region collaborates closely with Baghdad for sector modernization.
SOMO shifts to global oil trading, maximizing revenue and expanding market reach.
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MNT GOAT
Can Iraq end the election deadlock soon?
In the recent article titled “IRAQ’S MALIKI STANDOFF: THREE EXITS, NO EASY WAY OUT” Iraq’s political deadlock now turns on a single question: does Nouri al-Maliki come back? His bid to return to power has pushed the government formation crisis into a more volatile phase, deepening divisions inside the Shiite Coordination Framework and drawing an unusually blunt warning from Washington.
For the second time, parliament failed to convene a session to elect a president and designate a prime minister. This time, the collapse was driven not by Kurdish infighting, but by disagreement over Maliki’s candidacy, according to sources inside the Coordination Framework, the Shiite coalition entitled to nominate the next government. It has been nearly two weeks already after President Donald Trump warned that Maliki’s return would have consequences for U.S.-Iraq relations, Shiite leaders remain deadlocked.
A Framework official told Alhurra that three scenarios are now under discussion to end the deadlock. Please go read the article in full in the Articles Section of today’s Newsletter for details of each of these solutions. Note that I believe none of these scenarios will work and are just conversation and not real solutions. There is in FACT only one solution and that is to give al-Sudani yet another term. I believe that in the end he will be nominated and appointed for yet another term.
I find it ironic that they are thinking about an option to extend al-Sudani term for another year, giving them time to work out solutions to the election deadlock. But is this even doable? Is it constitutional? In the article titled “OUTSIDE THE CONSTITUTION”: AN EXPERT REFUTES THE PROPOSAL TO EXTEND THE CARETAKER GOVERNMENT” a source within the coordination framework revealed to Shafaq News Agency that caretaker Prime Minister Mohammed Shia al-Sudani had received a proposal to extend his government’s term for one year with specific powers, with the aim of finding a way out of the political deadlock. Aa legal expert confirmed on Thursday that “the 2005 Iraqi constitution contains no provision allowing the extension of a caretaker government”, considering any attempt in this direction to be a departure from the principle of the rotation of power.
As investors we do not want this extension as we want a permanent solution and the political side to be able to quickly work these issue out. This is called ‘stability’. It is not bad to have a deadlock but for how long? This shows the democratic principles at work.
What else is in the Iraqi news?
We all should know that even during the election deadlock and amidst all the ongoing saga associated with it, the independent Central Bank is still moving forward with reforms in the background. Today I have some more very good news in this direction.
In article titled “IRAQ HAS ‘HUGE PLAN’ TO TRANSFORM BANKING SECTOR, SAYS CBI GOVERNOR” we read that Ali al-Alaq told The New Region that citizens must not“rush to the market” amid a rise in unofficial dollar prices, insisting that the Central Bank is maintaining foreign reserves “at a very good level.”
ERBIL, Kurdistan Region of Iraq – Central Bank of Iraq (CBI) Governor Ali al-Alaq told The New Region on Wednesday that Baghdad has a “huge plan” to change the banking sector in the next few years, reassuring the Iraqi population that the value of the Iraqi dinar compared to the US dollar is under control. Alaq urged the Iraqi people to “calm down” and not to “rush to the market,” amid a recent soaring rise in unofficial dollar prices, going from around 1,420 dinars per $1 in the black market to 1,570, before settling around 1,500. In comparison, the CBI has set the value at 1,300 dinars per $1.
This week, the CBI governor and the prime minister al-Sudani met with the head of the KRG Barzani. Based on explaining this ‘huge’ banking reform plan and the reforms already accomplished the KRG praised the CBI work. We read about this meeting in the article titled “MASROUR BARZANI PRAISES AL-ALAQ’S MEASURES TO IMPROVE THE BANKING SYSTEM IN IRAQ”
On Tuesday, the Prime Minister of the Kurdistan Region, Masrour Barzani, held an expanded meeting with the Governor of the Central Bank of Iraq, Ali Al-Alaq, and officials and representatives of a number of banks and digital wallet companies participating in the (My Account) and (E-Passula) projects. The Prime Minister expressed his gratitude to the Governor of the Central Bank and his team for the facilities, great cooperation, and high coordination with the regional government, and for their support of the reform steps in the field of developing the banking sector, praising the reforms led by the Governor of the Central Bank with the aim of activating and improving the banking system throughout Iraq.
This week there was also more good news (big news) about increased projected oil revenues and strategic moves in this direction. We can read the news in article titled “SOMO IS MOVING TOWARDS GLOBAL OIL TRADING”. The Iraqi Oil Marketing Company (SOMO) is moving towards a qualitative shift in its operations, from simply selling crude oil through traditional outlets to entering the field of trading in global oil markets. The company’s management described this move as aiming to maximize revenues and seize opportunities in a rapidly fluctuating market, while oil experts warned of the risks of this step if the appropriate institutional and legal environment is not prepared for it.
The Director General of the Oil Marketing Company, Ali Nizar Al-Shatri, told Al-Sabah that the company is currently studying mechanisms for transitioning from the traditional sales model to a trading model, in line with Iraq’s economic interests, noting that this approach comes within a vision aimed at maximizing oil revenues and not limiting marketing operations to Iraqi ports only.
In other words, as I see it, they are no long going to just receive customers who need oil but are going to reach out and find customers who need the oil and the products generated from it. They are going to reach out globally instead of just sitting waiting for business to come to them. This could have ramifications of using other currencies to purchase the oil and bargaining on price to get the highest price available based on local demands not just oil market prices.