Former MP Mohammed al-Bayati said on Sunday that Iraq’s current financial crisis was not a surprise and has been building for years, pointing to three main reasons behind it.
Speaking to dinaropinions.com, al-Bayati said the country has long known a crisis was coming, which is why serious steps are now needed to fix the overall economy and reduce Iraq’s heavy dependence on oil price swings.
He explained that the first major issue is the drop in oil prices, which came at the same time as a sharp rise in government spending. Salaries alone, he said, now make up about 80% of public treasury revenues. The second issue is mistakes in how the financial situation has been handled, which directly made the crisis worse.
Al-Bayati added that fixing the financial situation must be the top priority for the next government. He warned that continuing to open new public-sector job appointments without realistically looking at state revenues could push Iraq into an even more difficult economic situation very quickly.
He stressed that the next phase must focus on moving away from an economy that relies almost entirely on oil. Instead, Iraq needs to shift toward a more diversified economy if it wants long-term financial stability.
