How much will $15bn IMF Loan really cost Iraq?

Economic expert Abdul Rahman al-Mashhadani told Al-Monitor that the SBA is similar to the 2004 agreement that Iraq signed but didn't uphold.

"The IMF will help provide the loan to Iraq from several parties: The IMF will provide $830 million; the World Bank, about $5 billion with an interest of 1.5-3%; and the rest will come from other organizations and countries and will be guaranteed by the IMF at an interest rate of 7.5- 8%, provided that Iraq repays the loan and its interest in a very short period of seven years," Mashhadani said.

"Among the conditions set by the IMF is that the government decrease subsidizing fuel prices and reformulate the budget terms and fund allocations to reduce government spending, especially in the operating budget. A large number of parliamentary blocs have rejected this on the grounds that the budget is a law that should remain untouched," he added.

The government is facing a predicament, and it has failed to deal with the Iraqi public with transparency and clarity in a bid to end the controversy over the IMF conditions. In 2004, Iraq refused to continue to abide by the IMF's terms after 2007 because of a hike in oil prices and concerns over the public's wrath.

Iraq consequently lost the confidence of the global market and economic organizations. Now, the current drop in oil prices will force the country to defer to the will of the IMF and face the wrath of citizens, who will have to pay more for fuel, consumer goods and services as the subsidies are lifted.