Iraqi Cabinet Approves Budget Reforms

Although Zebari announced that the government intends to announce an austerity plan to address the developments in the financial crisis, the prime minister’s office denied its intention to announce the austerity plan.

This inconsistency is justified as the new government has found itself facing accumulated crises at all levels, the inherited mistakes in the management of Iraq’s economy and the procedures that failed for years to revitalize the Iraqi economy and diversify its resources.

The recent oil agreement between Baghdad and Erbil can be considered an attempt by the government to save what can be saved in the 2015 budget.

Nevertheless, all of these are formal and temporary solutions, and Iraq needs an extensive economic rescue plan that allows to reform the inherited economic structures, and shift the nature of the Iraqi economy from being a rentier economy, which works according to laws in socialist-totalitarian states, into a productive society that attracts investments and takes into account global economic developments.

In Iraq, nearly 6 million people receive salaries from the state, according to former Minister of Planning Ali Shukri, who revealed that “this figure is three times the need of the state institutions.”

This is a real knot that prevents any structural reform in the Iraqi economy, and that needs bold and revolutionary decisions and actions that include the promotion of foreign investments in conjunction with encouraging nonproductive employees to work in the private sector.