One of the costs Iraq is incurring thanks to the security crisis revolves around decreasing outputs from the country’s oil fields in places like Kirkuk, Salahaddin and Ninawa, where the IS group has either been fighting or is in control. Iraqi oil fields have also been damaged in the fighting as has other valuable infrastructure.
Saad al-Matlabi, a member of the security committee in Baghdad's provincial council agrees that Iraq's oil situation is worrying. “The whole Iraqi economy is dependent on one product: oil,” he says. And it's not just the IS group causing oil problems. “With the decline in oil prices, the Iraqi economy will continue to suffer. Any attempts to diversify and to increase agricultural or industrial production won’t work because of continuous electricity and fuel shortages.”
Anyway, al-Matlabi concludes, it's almost impossible to try and work out how much this security crisis is costing because the fighting isn’t over yet.
“This war is using up Iraq's financial and human resources,” states local economist, Mohammed al-Ani. “If this goes on much longer, it may lead to the disintegration of the Iraqi state. The costs of the war against the IS group are too high. In particular the costs of the weapons needed to fight the IS group, and the weapons the IS group has managed to take from the Iraqi forces, are a focus for the Iraqi treasury.”
Whatever the eventual final sum, local economists and analysts believe that it will be very high. And because of this, they also believe that Iraq will need international assistance to recover.
“Because of the drop in oil prices and the concurrent decline in Iraq's budget, we are going to need an international project – similar to the Marshall Plan after WWII,” Antoine argues. “To help with reconstruction, to re-build after the damage caused by the IS group and to help the country. We will not be able to handle these huge losses.”
(Iraqi dinar image via Shutterstock)