🇮🇶🔥 IRAQ HAS REACHED THE “PAYING THE PRICE” PHASE — BUT IS THE COUNTRY FINALLY BUILDING THE STRUCTURE IT NEEDS?
📰 NEWS SUMMARY
Economic expert Ziad Al-Hashemi says Iraq has entered a phase of “paying the price” for more than two decades of accumulated corruption, mismanagement and failed economic policies.
His warning is significant: Iraq’s current problem is not simply a temporary liquidity crisis. It is the consequence of an economic system built around oil dependence, oversized government spending, political quotas and insufficient structural reform.
He argues that continuing to borrow money or postpone payments without fixing the underlying system will only extend the problem — and ultimately the citizens will pay the price.
🔎 WHAT IS THE REAL PROBLEM?
The deeper issue is not simply:
💵 “Iraq needs more liquidity.”
It is:
🏛️ Iraq needs a stronger economic structure.
For years, Iraq had the opportunity to use enormous oil revenues to build:
🛢️ A diversified economy
🏭 Strong private-sector industries
🏦 A modern banking system
📊 Better fiscal management
🌾 Agriculture and food production
🌐 International trade
💻 A digital economy
But according to Al-Hashemi, too much of that opportunity was lost through corruption, political division and poor resource management.
⚠️ WHY BORROWING OR PRINTING MONEY IS NOT THE REAL SOLUTION
This connects directly to the recent reports about Iraq's liquidity problems.
If the government simply:
💰 Borrows more
💵 Prints more money
⏳ Delays payments
🛢️ Continues depending almost entirely on oil
then Iraq may solve today's cash-flow problem without solving tomorrow's economic problem.
The IMF has likewise identified Iraq's excessive dependence on oil, large public-sector footprint and institutional weaknesses as structural constraints on non-oil growth. (IMF)
🇮🇶 SO WHERE DOES IRAQ STAND RIGHT NOW?
This is where the picture becomes VERY interesting.
Iraq has not finished the transformation, but there is evidence that several pieces of the new economic structure are already being built.
🏦 1. BANKING REFORM — UNDERWAY
Iraq has been working to modernize its banking sector, strengthen compliance and bring financial institutions closer to international standards.
The banking system remains underdeveloped, with state-owned banks dominating the sector, and public distrust and non-performing loans remain significant problems. But regulatory and AML/CFT reforms have advanced. (BTI 2026)
➡️ STATUS: 🟡 IN PROGRESS — significant work remains.
💳 2. DIGITAL PAYMENTS — MOVING FORWARD
Iraq is pushing toward greater use of electronic payments and reducing dependence on cash.
That matters because a modern economy requires money to move through transparent, traceable financial channels rather than remaining outside the banking system.
UNDP has described Iraq's transition toward digital payments as a potential turning point for economic modernization, financial transparency and inclusion. (UNDP)
➡️ STATUS: 🟢 ADVANCING
🛃 3. CUSTOMS & NON-OIL REVENUE — BEING REFORMED
Iraq is also working on improving customs and revenue collection, an essential step if Baghdad wants to reduce its dependence on oil.
This directly addresses the structural problem identified by Al-Hashemi:
Oil cannot remain the only engine financing the state.
➡️ STATUS: 🟡 UNDER DEVELOPMENT
🛢️ 4. ECONOMIC DIVERSIFICATION — STILL THE BIGGEST CHALLENGE
This is where Iraq has the most work to do.
The IMF says non-oil growth remains constrained by low productivity, limited investment, inefficient use of human capital, an oversized public sector and continued dependence on oil. (IMF)
At the same time, Iraqi authorities have been discussing economic and financial reforms specifically aimed at diversifying income sources and reducing dependence on oil revenues. (Iraq Business News)
➡️ STATUS: 🟡 STARTED, BUT FAR FROM COMPLETE
🔥 PUT IT ALL TOGETHER
Look at the direction:
OLD IRAQ
🛢️ Oil dependence
💵 Cash economy
🏦 Weak banking infrastructure
🏛️ Heavy government spending
📉 Limited non-oil revenue
🔴 Structural corruption & inefficiency
⬇️
TRANSITION
🏦 Banking reform
💳 Digital payments
🛃 Customs modernization
📊 Fiscal reform
🌐 International financial integration
🏭 Private-sector development
🛢️ Economic diversification
⬇️
THE IRAQ THEY ARE TRYING TO BUILD
🇮🇶 A more diversified economy
💵 A more efficient monetary system
🏦 A modern banking sector
💳 A digital financial infrastructure
🌐 Greater integration with international markets
📈 Stronger non-oil economic activity
💡 AND THIS IS WHERE THE MONETARY REFORM QUESTION BECOMES INTERESTING
The important question isn't simply:
“When will Iraq change the exchange rate?”
The bigger question is:
“Is Iraq building the economic and financial infrastructure necessary to support a fundamentally stronger monetary system?”
And the answer today appears to be:
YES — but the transformation is NOT finished.
Iraq is actively working on many of the components needed for a modern economy, but major weaknesses remain, particularly in banking, governance, public-sector dependence and economic diversification. (BTI 2026)
That means the current period could be viewed as a structural transition rather than simply a liquidity crisis.
And if Iraq succeeds in completing these reforms, the country could eventually have a much stronger foundation for whatever monetary changes the CBI decides to implement.
⚠️ Important: None of this confirms a specific RV, exchange-rate change or “Delete the Zeros” timetable. Those would require an official announcement from Iraqi authorities.
🇮🇶 Iraq isn't simply trying to find more money. It is being forced to rethink how its entire economic system works.
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#IQD #Iraq #IraqiDinar #CBI #MonetaryReform #EconomicReform #BankingReform #DeleteTheZeros #IraqEconomy #DigitalPayments #DeDollarization #EconomicDiversification
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AN ECONOMIST SAYS IRAQ HAS ENTERED A PHASE OF “PAYING THE PRICE” AS A RESULT OF ACCUMULATED MISMANAGEMENT AND CORRUPTION – URGENT
Economic expert Ziad Al-Hashemi said on Tuesday (August 4, 2026) that Iraq has entered a phase of “paying the price” for what he described as the accumulation of failures, corruption and mismanagement over more than twenty years, considering that the current crisis is the result of the policies of successive governments, in addition to the responsibility of political parties, parliament and oversight institutions.
Al-Hashemi said, in a statement followed by “Baghdad Today”, that financial and administrative losses and failures have accumulated during the past years without real treatment, accusing political forces of being preoccupied with “dividing the spoils”, while the regulatory and legislative bodies were unable or negligent in performing their role in accountability and reform.
He added that, in his view, the responsibility is not limited to governments, but extends to the parliament that approved large budgets, the political forces that dealt with the state according to the logic of power-sharing, as well as regulatory institutions, elites, media and the public, some of whom he said contributed, to varying degrees, to the continuation of the existing approach.
Al-Hashemi pointed out that Iraq is not facing a temporary liquidity crisis, but rather is going through the repercussions of what he described as an economic and political system that relied on quotas, corruption and buying loyalties, considering that the reform opportunities that were available during the years of financial abundance were not invested in building a diversified economy that is more capable of facing crises.
He warned that continuing to address the crisis through borrowing or postponing payments, without implementing structural reforms, could prolong the economic challenges, stressing that the cost of this would be borne by the citizens.
Economic and political experts offer differing views on the causes of the crisis and ways to address it, amid repeated calls for the implementation of financial and economic reforms, diversification of income sources, and a reduction in dependence on oil.
(Mnt Goat: I could not have said it any better than Al-Hashemi. I think he is spot on.)