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Iraq lacks ‘real economy’ due to reliance on oil and mismanagement: PM Kadhimi

Iraq has failed to develop a “real economy” over the last two decades due to mismanagement, corruption and a reliance on oil revenues, warned the newly-inaugurated Iraqi prime minister Mustafa al-Kadhimi on Thursday, amidst an economic crisis, compounded by the COVID-19 pandemic.

Speaking to journalists at a press conference in Baghdad, Kadhimi blamed previous cabinets for mismanagement and political parties for pressuring them to commit corruption, saying the country is facing a great challenge.

“When oil prices fall, so does the economy. Who shoulders the responsibility? Why did the previous cabinets not build an economy? When countries faced setbacks due to coronavirus they relied on their economy. Where is our economy?” asked the premiere.

“Do not tell us that our economy is strong because it is a lie as we do not have an economy at all. We only have finance which relies on oil … We do not have a real economy.”

Iraq has heavily relied on oil revenues since the US invasion in 2003. Kadhimi stated that the country currently gets 94.7 of its income from oil sales. He argued that the previous cabinets should have diversified its income resources.

In addition to the dramatic drop of oil prices, Iraq is facing a rapid spread of the novel coronavirus. It recorded 1,261 new cases of the virus and 31 deaths on Thursday, bringing the total number of cases to 16,675. Of this, 6,548 have recovered while 457 have died. This data includes the Kurdistan Region.

The great number of civil servants is also a headache for the government, which has finally decided to reduce the salaries of some of its four million employees.

“Iraq currently has four million employees while its population is below 40 million. In other countries, the population is 90 million while they have less than 300 thousand employees,” said the prime minister, warning that, “Iraq is before a real challenge.”

He claimed that some political parties have promised “thousands” of job opportunities to their supporters during the election campaign. “This means rigging elections and changing the results of the elections.” Source