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The economy of #Iraq is teetering on the edge of collapse.
Historically low oil prices and an extremely young population desperate for jobs has put the country on the road to a fiscal apocalypse.
Thread:
Historically low oil prices and an extremely young population desperate for jobs has put the country on the road to a fiscal apocalypse.
Thread:
Oil revenue, which makes up 90% of #Iraq’s federal budget, is drying up as prices fall.
The IMF projected -4.7% growth for Iraq in 2020, with this downturn likely to spill into next year.
Even if oil prices rise, revenue will barely be able to pay off wages owed by the gov’t.
The IMF projected -4.7% growth for Iraq in 2020, with this downturn likely to spill into next year.
Even if oil prices rise, revenue will barely be able to pay off wages owed by the gov’t.
#Iraq’s new government has inherited a messy budget from @AdilAbdAlMahdi:
Total annual expenditure (IQD): 161 trillion.
Projected 2020 oil price ($): 56 per barrel.
Annual deficit (IQD): 53 trillion.
That’s a deficit of $44.5 billion.
Total annual expenditure (IQD): 161 trillion.
Projected 2020 oil price ($): 56 per barrel.
Annual deficit (IQD): 53 trillion.
That’s a deficit of $44.5 billion.
#Iraq’s bureaucracy is a major part of the issue.
The public sector tripled since ‘05, from 850k to 3.7 million jobs.
@AdilAbdAlMahdi added around 400,000 unnecessary jobs last year.
83k in @AL_Khatteeb’s Ministry of Electricity alone.
The PS inflation is killing the economy.
The public sector tripled since ‘05, from 850k to 3.7 million jobs.
@AdilAbdAlMahdi added around 400,000 unnecessary jobs last year.
83k in @AL_Khatteeb’s Ministry of Electricity alone.
The PS inflation is killing the economy.
The inflation in public sector salaries is truly staggering.
Aggregate public sector salary expenditure in 2005: $3.6 billion (with oil at about $50).
Aggregate public sector salary expenditure in 2020: $36 billion (with oil at about $25).
Salaries doubled, oil revenue halved.
Aggregate public sector salary expenditure in 2005: $3.6 billion (with oil at about $50).
Aggregate public sector salary expenditure in 2020: $36 billion (with oil at about $25).
Salaries doubled, oil revenue halved.
#Iraq’s public sector is not only bigger but also gets paid more than in other countries.
Iraq (size of PS): 4.1 million employees out 38 million total population.
Japan: 1 million out of 126 million.
PS salary levels as % of #Iraq GDP? 25%.
16% in Saudi, 5% in Malaysia.
Iraq (size of PS): 4.1 million employees out 38 million total population.
Japan: 1 million out of 126 million.
PS salary levels as % of #Iraq GDP? 25%.
16% in Saudi, 5% in Malaysia.
#Iraq put all its chips on oil and that gamble has not paid off.
Agriculture, manufacturing, tourism, construction etc. all need serious attention. The private sector needs resuscitation.
Tax reform is badly needed.
The public sector must shrink.
Or the economy will collapse.
Agriculture, manufacturing, tourism, construction etc. all need serious attention. The private sector needs resuscitation.
Tax reform is badly needed.
The public sector must shrink.
Or the economy will collapse.
The ongoing public backlash in #Iraq to rumours that pensions would be slashed demonstrated that the public don’t understand how badly the impending collapse might be.
Restructuring the Iraqi economy will be incredibly painful. But without it, the collapse would be catastrophic.
Restructuring the Iraqi economy will be incredibly painful. But without it, the collapse would be catastrophic.
I do not envy @MAKadhimi one little bit.
He has received an economy on its last legs, as #Iraq navigates a very difficult social moment with the October protests still alive in many provinces.
He has to convince Iraqis that the pain they must endure will pay dividends later.
He has received an economy on its last legs, as #Iraq navigates a very difficult social moment with the October protests still alive in many provinces.
He has to convince Iraqis that the pain they must endure will pay dividends later.
