Security Situation Weighs on Iraq's Economy

Nevertheless, the war alone, in the sense of military operations, was not a key reason behind the rise in poverty rates. Rather, it was coupled with other reasons — most notably the mass displacement of Iraqis from IS-controlled areas, unemployment and the decline in crude oil global prices to less than $60 per barrel, particularly since 90% of Iraq's federal budget relies on oil revenues.

Despite this complex situation, Deputy Prime Minister for Economic Affairs Rose Nuri Shawis seems optimistic. He said, “There is [a] great possibility that Iraqi individuals will have positive living conditions, if Iraq overcomes its challenges.”

Shawis summarized these challenges to Al-Monitor, saying they consist of “the security situation, which is a major obstacle to Iraqis in all fields.”

Abdul-Zahra al-Hindawi, spokesman for the Iraqi Ministry of Planning, told Al-Monitor, “The displacement from Anbar, Ninevah, Salahuddin and Diyala provinces has heavily increased poverty rates in the country.” He added, “The economic situation in those provinces has caused half a million people to lose their jobs.”

Hindawi said that while the poverty rate was 23% in 2013, it has now increased to 30%. “The security situation has hampered the ministry's plan to reduce poverty,” said Hindawi.

Najla Ali, head of the ministry’s initiative to alleviate poverty, did not seem convinced by these statistics. She told Al-Monitor, “In collaboration with the World Bank, the ministry’s action plan will be implemented soon to determine poverty rates following the great displacement in Iraq.”