Iraq's financial crisis "explodes" days before the December 15th demonstration: We have reached a dangerous stage
The depth of the financial crisis
For weeks, government ministries have been facing significant financial pressures as the fiscal year draws to a close, amid rising operational spending requirements and numerous government obligations.
This has impacted the funding of several projects, most notably payments owed to companies and contractors. Official data indicates that the available allocations are insufficient to cover all the required amounts at once, resulting in a considerable delay in disbursing funds.
This crisis is no longer limited to the accounts of ministries or financial schedules, but has begun to affect the service and project sectors, while contractors are awaiting urgent solutions after accumulating debts to banks, suppliers and workers, and the delay has become a direct cause of the failure of hundreds of projects in the governorates.
Contractors Union: We have reached a dangerous stage, and the demonstration will proceed as scheduled.
Ismail al-Rubaie, a member of the Iraqi Contractors Union, told Baghdad Today that “the private sector has reached a critical stage due to the delay in payments, and that the peaceful demonstration scheduled for December 15 will proceed as planned, after the number of participants reached thousands of contractors.”
Al-Rubaie added that “the total cost of the projects implemented by the companies amounts to about 200 trillion dinars, while the contractors’ dues from the government amount to 30 trillion dinars,” explaining that “the Prime Minister directed the disbursement of 5 trillion, but the Ministry of Finance released only 2 trillion, which is an amount that does not address the crisis, and therefore we refused to receive it.”
He pointed out that “a large percentage of contractors are on the verge of bankruptcy, while dozens are being pursued with lawsuits or arrest warrants due to accumulated debts, and others have been forced to mortgage their homes while awaiting a final solution.”
He stressed that “the next step will be to halt projects if the dues are not disbursed, especially water, electricity and services projects, which depend directly on the ongoing contracts.”
The Ministry of Finance refutes the accusations and presents details of the expenditures.
In response, the Ministry of Finance issued a lengthy statement refuting what was said by the head of the Contractors Union during a televised interview, stressing that “the claim regarding sending one of the female MPs to negotiate with Minister Taif Sami about the dues is completely untrue, and that the Ministry did not receive any female MP for this purpose.”
The Ministry of Finance said in a statement received by “Baghdad Today” that “the Ministry officially handed over to the representative of the Union the two Cabinet Resolutions (435 and 721 of 2025), which included the allocation of an amount of (2) trillion dinars, in addition to the allocation schedules amounting to 25% of the entitlements.”
She added that “the financing procedures included the disbursement of (1,371,451,904,190) trillion dinars to the ministries, and (1,000,000,000,000) trillion dinars to the governorates, and that work is underway based on the requests received from the Ministry of Planning,” stressing that “the representative of the Union was present at all the meetings and was aware of their content.”
The ministry stressed that it “reserves its legal right to hold accountable the channels and media professionals who promote misleading information regarding this issue.”
The outstanding payments file is turning into a financial and administrative test.
The interactions of the past few days show that the issue of contractors' dues has become a central part of the pressures facing finance, especially with the multitude of obligations that require immediate funding, in contrast to the clear restrictions on the liquidity currently available.
A reading of the official data issued by the Ministry of Finance indicates that the ministry is operating within the limits of the approved allocations, and cannot disburse the full entitlements before the Ministry of Planning completes its requests, which makes scheduling the only option at the moment.
On the other hand, contractors believe that the delay has led to significant losses for companies, and that continuing at the same pace will lead to the suspension of essential service projects, which increases the pressure on the state ahead of the December 15 demonstration.
Despite the ongoing discussions between the two sides, the size of the gap between what the Contractors Union is demanding and what the Ministry of Finance can currently release makes this issue one of the most prominent challenges facing the government in the coming weeks. link