Mashhadani said that the IMF imposed several conditions that included reducing the operating expenses, limiting the governmental appointments, applying austerity measures and reducing the government spending. It is likely that based on those conditions Prime Minister Haider al-Abadi proposed Sept. 6 that state employees be granted a vacation of five years and be paid nominal salaries.
Abadi was probably seeking to cut down costs and address next year’s budget deficit, which is expected to reach $18 billion. This was opposed by some political blocs and parliamentary committees, including the parliamentary Finance Committee, which is still calling on the government to present the IMF loan conditions to the parliament.
Member of parliament for the Finance Committee Ahmed Sarhan told Al-Monitor, “According to the information available to the Finance Committee, the government’s idea to give state employees a vacation of five years comes in the framework of the implementation of the IMF conditions, but we will oppose such a proposal as it threatens a wide category of staff.”
Ahmed said, “The parliament may have given the government the authority to conclude agreements and take loans that address the state budget deficit, but this does not mean that the legislative power should not be made aware of the details of the loans that are granted in the form of international agreements so that this power can discuss such details and examine their consequences. We are awaiting the IMF loan details.”
Parliamentarian Sarhan Ahmed told Al-Monitor that next year’s budget is expected to reach about $82 billion, calculated at a price of $40 per barrel of oil, while the deficit is expected to reach $18 billion.
But Ahmed Kanani, the chairman of the parliamentary Finance Committee, said Sept. 2 that the economic crisis plaguing Iraq can only be solved with higher oil prices or a loan. Kanani said in a statement to Mawazin News, “The World Bank loan will help solve part of the budget crisis until the end of the year.” This infers the absence of agreement between the government and the parliament on ways to address the financial crisis and solve the budget deficit amid the ongoing drop in oil prices.
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