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Finance in Iraq: Financial chaos and potential risks

For months, Iraq has been experiencing a clear disruption in the implementation of service and investment projects, as a result of the delay in sending the 2025 budget schedules to Parliament, and the accompanying administrative paralysis and funding stoppage.

The continued application of the 1/12 monthly rule, according to Financial Management Law No. 6 of 2019, has resulted in the inability to finance new projects or complete stalled ones, which has cast a heavy shadow on ministries, governorates and implementing companies, and has led to a decline in basic services and an increase in the levels of delays in completion.

The effects of this delay are compounded by the political and technical disputes that have disrupted the completion of the budget schedules, in addition to the widespread criticism of the previously imposed three-year budget (2023–2025), which experts believe opened the door to manipulation of public funds and was not implemented transparently, thus exacerbating the financial turmoil and delaying the funding of vital projects.

Deteriorating services

Meanwhile, MP Mahma Khalil, who won the recent parliamentary elections, says that the budget delay has negatively impacted the level of services and projects, as the astronomical three-year budget for the years 2023-2024-2025 was not spent transparently and was marred by numerous suspicions that led to the stagnation of service projects.

Khalil adds to Shafaq News Agency that the spending in the three-year budget gave the government leeway to manipulate public funds, considering it a resounding failure that necessitates demanding final accounts to know the true size of spending, especially since the 2025 budget has not yet been completed despite the approaching end of the year.

For his part, Baghdad Provincial Council member Amer Dawood Al-Faily told Shafaq News Agency that the lack of budgets has disrupted projects in general, noting that the Baghdad Provincial Council’s budget for 2025 has not been released yet, which has caused obstruction of service projects and delays in payments to implementing companies.

According to Al-Faily, the problem is clearly evident in the projects department of the Baghdad Municipality, where implementing companies stopped working due to the lack of funding, which directly affected services in the capital and caused a decline in completion levels in vital sectors.

reformist vision

In contrast, former member of the parliamentary finance committee, Mu’in al-Kadhimi, explains that there is a trend within the coordination framework to address past mistakes by approving a “real” budget in which unnecessary expenditures are reduced and revenues and levies are increased.

Al-Kadhimi, speaking to Shafaq News Agency, points to the need for political solidarity within the state administration coalition, along with popular understanding of the nature of the upcoming financial phase.

It is also expected that the 2026 budget will amount to only 150 trillion dinars, after the 2025 budget was at the level of 211 trillion dinars, but only 150 trillion dinars were actually spent, which confirms the need for a more realistic budget that is commensurate with the available revenues and reduces waste.

Shafaq.com

The National: Sudani’s chances of a second term are “slim”.

The chances of caretaker Prime Minister Mohammed Shia al-Sudani securing a second term as head of the Iraqi government have become “slim,” according to a report in The National newspaper that discussed the development of heated negotiations between political blocs.

The report, published in English in Abu Dhabi and translated by Shafaq News Agency, noted that the Reconstruction and Development Coalition, led by al-Sudani, came in first place in the recent legislative elections, winning 46 parliamentary seats out of 329.

The report quoted Michael Knights, a researcher at the Washington Institute, as saying that Sudani “was never likely to get a second term because he had few seats and many at the same time.”

He explained that “Sudani has a small number because it requires at least 60 to 70 seats to be able to claim the premiership as a single effort, and a lot of seats because the other Shiite parties want to participate (in choosing) a prime minister who can be controlled and who does not have seats, or almost no seats.”

According to the report, most political parties, especially Shiite ones, are strongly convinced that allowing any prime minister to serve more than one term disrupts the political balance.

The report noted that Nouri al-Maliki’s second term experience raises the possibility of the prime ministership becoming an independent power center capable of establishing a deep political and security network that could override the will of political blocs and threaten their interests, even the political system itself.

At the same time, the report said that some believe that al-Sudani, who is seeking a second term, has likely accumulated experience and networks of influence within state institutions, making him more independent and less susceptible to pressure.

According to this logic, this raises the possibility of the formation of a deep state that extends into the security, economic and foreign affairs sectors, turning the executive authority into a closed system.

The report quoted an unnamed Shiite politician as saying that “so far, al-Sudani does not enjoy the same broad support within the coordination framework as when he was nominated for this position in 2022, and the road ahead is still bumpy.”

According to the same Shiite politician, the coordinating framework is still discussing several candidates to assume the premiership, and it is believed that among the names on the shortlist are the head of the Integrity Committee, Bassem al-Badri, the governor of Basra, Asaad al-Eidani, and the head of the intelligence service, Hamid al-Shatri.

The report quoted Sajjad Jiyad, an expert on Iraqi affairs at the Century Foundation, as saying that the coordinating framework “clearly wants someone who does not have a party, who does not have greater political ambitions in terms of running in the upcoming elections, and someone they feel they will be able to control better.”

Giyad continued, saying, “This type of standard means that al-Sudani is expected to be disqualified.” He added that al-Sudani has “little chance” of securing a second term, noting that he did not achieve a significant majority in the elections, such as winning 70 or 100 seats.

The report quoted a Shiite politician linked to an armed faction as saying, “We cannot deny some of Sudani’s successes in certain areas, but there are also failures,” adding that among them is Sudani’s inclination towards Washington and his willingness to make concessions that could harm the interests of his allies who initially supported him, and this worries us.

According to the same politician, one of the most important conditions for the Sudanese nomination in 2022 was not to build a party base and run in the elections, and “this in itself was a challenge to the partners.”

The report quoted Ina Rudolph, a researcher at the Center for Governance and National Security, as saying that the main red line of the coordination framework is that Sudani has exceeded his ambition to develop beyond the role assigned to him, which is that of “Director General,” referring to a term used by Asaib Ahl al-Haq leader Qais al-Khazali of the Sadiqun bloc in 2022.

According to The National, Rudolph continued, saying that Sudani’s gradual push for a more independent foreign policy, along with his self-promotion as a guardian of Iraq’s stability amid a highly volatile geopolitical conflict, has alarmed entrenched veterans of the Shiite power, such as Maliki.

She explained that these people began to feel an additional threat because of the Sudanese’s relatively higher credibility on the street, which has gained momentum since the municipal elections.

Rudolph believes that despite the challenges facing Sudan, it is seen as a relatively safer option, especially for those who want to keep Iraq out of the regional escalation with Israel and maintain balanced relations with Iran and the United States.

The report quoted Jaber al-Jabri, a political advisor to the Progress Party, as saying that “so far, al-Sudani’s chances are still limited, because there is a strong campaign by al-Maliki to obtain the position, but the final decision depends on the coordination framework.”

He added that the Sudanese are currently part of the coordination framework and “will abide by its instructions and requirements, but the final decision is still unknown.”

The report also quoted an official from the Kurdistan Democratic Party as saying that the party does not oppose al-Sudani’s candidacy for the position, explaining that “we do not have the right to veto anyone. We have been clear with all parties, and our only criterion for supporting any candidate is his commitment to implementing the constitution in its entirety, from A to Z.”

According to the official in the Kurdistan Democratic Party, “The constitution cannot be treated like a restaurant menu, where some items are picked and others are ignored or set aside. Rather, it must be applied fully, fairly, and consistently.”

Shafaq.com

With the participation of 40 companies and a thousand merchants, Sulaymaniyah hosts the third edition of “Made in Iraq”.

The third edition of the “Made in Iraq” exhibition is scheduled to launch in Sulaymaniyah Governorate tomorrow, Wednesday, December 3, and will continue for four days.

According to information obtained by Shafaq News Agency, “The exhibition will witness the participation of forty major companies from the Kurdistan Region, in addition to the presence of approximately one thousand traders and investors from various Iraqi governorates.”

Aram Baban, a member of the Sulaimaniyah Chamber of Commerce and Industry, stated during a press conference attended by Shafaq News Agency that “the aim of organizing this event is to highlight Iraqi industrial products, grant commercial agencies to those wishing to invest and deal with local industries, in addition to providing an important opportunity to promote Iraqi products and open the way for granting investment licenses in industrial projects within the country.”

He stressed that “the exhibition has become a platform that contributes annually to supporting the national industry and enhancing the presence of Iraqi products in the markets.”

Shafaq.com

Six names are competing for the position of Speaker of the Iraqi Parliament.

An informed source in the National Political Council, which includes the Sunni political forces that won the elections, revealed on Tuesday the names nominated for the presidency of the House of Representatives in its new session.

The source told Shafaq News Agency that “the meeting of the National Political Council forces, which includes Sunni components and is scheduled to be held next Thursday, will discuss a list of names of candidates for the presidency of Parliament and the matching of the candidate’s biography with the controls set by the Council in choosing the new Speaker of Parliament.”

He added that “the list of candidates for the position includes the leader of the Progress Party, Mohammed al-Halbousi, former Minister of Education Mohammed Tamim, Minister of Defense Thabit Mohammed al-Abbasi, and the leader of the Azm Alliance, Muthanna al-Samarrai, in addition to Salem al-Issawi and Mahmoud al-Qaisi.”

The source indicated that “the requirements for the position of Speaker of Parliament have been set at 25 points,” explaining that “another session will be held after Thursday’s meeting to finalize the nomination of a suitable candidate for the new Speaker of Parliament.”

A political source previously revealed to Shafaq News Agency that the National Political Council, which unites the Sunni forces that won the recent parliamentary elections, intends to hold its first meeting next Thursday to discuss the distribution of positions among the council’s blocs and parties.

It is worth noting that the spokesman for the Sovereignty Alliance, Mohammed Abbas, revealed to Shafaq News Agency last Saturday that there are some secret names being discussed behind the scenes as candidates for the presidency of the Iraqi Parliament.

Last Sunday, the Sunni alliances and parties that won the elections announced the establishment of the “National Political Council” during an expanded meeting held at the initiative and invitation of the head of the Sovereignty Alliance, Khamis al-Khanjar, in Baghdad, with the aim of unifying visions and positions on major national issues and strengthening joint action between political leaders and blocs, according to a statement issued at the time.

According to the final election results, Sunni forces won 77 seats, making the reshaping of alliances a crucial factor in the negotiations to form the next government.

Shafaq.com

ExxonMobil is negotiating with Baghdad to inherit Lukoil’s stake.

ExxonMobil has approached Iraq’s oil ministry to express its interest in buying the majority stake held by Russia’s Lukoil in the giant West Qurna-2 oil field, according to five sources familiar with the matter who spoke to Reuters.

According to a Reuters report, Lukoil is trying to sell its international assets after the United States imposed sanctions on the company, adding that ExxonMobil’s move would be a major expansion of the leading American company’s return to Iraq, at a time when Moscow is trying to liquidate key energy assets.

He noted that Exxon declined to comment, while Lukoil did not respond to questions, explaining that the US Treasury Department has authorized potential buyers to speak to Lukoil until December 13, but that these buyers will need to obtain approval for specific deals.

The report stated that banking sources estimate the market value of the West Qurna-2 field at approximately $1.6 billion, based on its production and reserves exceeding 8 billion barrels.

The report noted that Lukoil’s largest overseas asset is its 75% operating stake in the West Qurna-2 oil field, one of the world’s largest oil fields, which produces about 470,000 barrels per day, representing about 0.5% of global oil supplies and 9% of total production in Iraq, the second largest producer in OPEC after Saudi Arabia.

He noted that Exxon had long operated the adjacent West Qurna-1 project before withdrawing last year, explaining that the American company signed a non-binding agreement with Iraq last October to help it develop the giant Majnoon oil field and expand oil exports.

The report quoted a senior Iraqi oil official as saying that “Exxon is our preferred choice to take over instead of Lukoil,” adding that the company “has the capability and experience to manage a large and complex field like West Qurna-2.”

On Monday, the Iraqi Oil Ministry invited several American oil companies to enter into negotiations regarding control of the West Qurna-2 oil field, and to seek to transfer the operation of the field to one of the companies through competitive bids.

It is worth noting that the Russian company Lukoil declared force majeure at the West Qurna-2 field on November 19th, after its operations were disrupted due to Western sanctions imposed on it, as it sent an official letter to the Iraqi Ministry of Oil stating that there were force majeure circumstances preventing it from continuing operations.

The West Qurna 2 field is one of the huge oil fields in southern Iraq. It was discovered in 1973, and its operating agreement includes the Russian company Lukoil with a 75% stake and the Iraqi South Oil Company. The field forms a key pillar of the Iraqi economy through its contribution to increasing oil production.

Shafaq.com

Rafidain Bank: Granted approximately 55 billion dinars to the “Riyada” initiative through 41 installments

Rafidain Bank announced on Tuesday that it has granted approximately 55 billion dinars to the “Riyada” initiative through 41 installments. A statement from the bank indicated that “the forty-first installment of the Riyada and Excellence Initiative to support small and medium enterprises has been released with a total amount of 1 billion Iraqi dinars and 82 entries.”

The statement added that “this payment comes as a continuation of efforts to finance entrepreneurs and youth within the Central Bank of Iraq’s initiative.”

He also pointed out that “the number of funded restrictions reached 4205 restrictions and the total value of the amounts granted so far amounted to 54,941,000,000 dinars, which reflects the bank’s commitment to supporting entrepreneurial projects that contribute to building the national economy.”

Burathanews.com

International bids for the Development Road project

The Ministry of Transport is preparing to open international tenders for the Development Road project at the end of this December, in a move that is considered the most prominent since its launch, signaling its official transition to the field implementation phase after the completion of most of the engineering and detailed designs.

The ministry’s media office director, Maitham Al-Safi, told Al-Sabah: “The ministry has made remarkable progress in completing the designs, which paves the way for contracting with specialized international companies that will undertake the implementation of the work packages, which include the highway, railways, industrial and logistics zones.”

He added that the Development Road project is one of the most important strategic projects that the government is relying on to transform Iraq into a logistical and commercial hub linking the Gulf to Turkey and then Europe, indicating that the length of the project extends for approximately 1,200 kilometers from the Grand Faw Port in Basra to the Iraqi-Turkish border.

He noted that a large proportion of the detailed designs for the highway and railway network were completed in cooperation with international consulting firms, and include bridges, stations, logistics corridors and supporting infrastructure, in addition to the continued completion of soil studies in a number of sections along the route.

Al-Safi noted that the project will enter its large-scale implementation phase at the beginning of next year, following the tendering process for international companies in separate packages covering road works, railways, and industrial zones. He explained that the completion of the first 62-kilometer section linking the ports of Faw and Umm Qasr represents the first concrete step in the comprehensive project.

Al-Safi explained that the development route is expected to contribute to providing thousands of job opportunities and revitalizing the transport, construction and logistics sectors, as well as attracting international investments to the industrial zones planned to be established along the route.

He added that the project is managed by an independent company to ensure its continuity and protect it from administrative changes, as it is a pivotal economic project that restores Iraq’s geographical role as a vital transit hub between Asia and Europe, and redraws trade routes in the region.

Alsabaah.iq

Financial fraud weakens citizens’ trust in banks.

Cases of online financial fraud are on the rise in the country, with citizens being targeted by fake calls and links that trick them into transferring their money to fraudulent accounts. This is what happened to Ayman, an employee at a private company, who lost 1.6 million dinars in minutes. Money exchange office owners in Baghdad confirmed that a lack of security awareness and citizens’ impatience make them easy prey for fraudsters who quickly transfer funds to multiple accounts. Dr. Ammar Al-Ithawi, a professor of cybersecurity at Al-Nahrain University, explained that these crimes rely more on psychological manipulation than technical vulnerabilities, noting that fraudsters use fake links or impersonate government officials to convince victims to transfer money.

Regarding funds, Alaa Al-Fahd, a member of the Central Bank’s media office, explained that the bank has strengthened its electronic security systems, issued alerts to banks, and participated in awareness campaigns and the pursuit of suspicious websites, emphasizing that recovering funds is only possible with very early reporting. Legal expert Mohammed Jumaa points out that outdated legislation does not cover modern cybercrimes, calling for updating laws to keep pace with developments. Economic expert Mustafa Al-Faraj affirms that the persistence of electronic financial fraud harms confidence in the banking system and hinders the transition to a digital economy.

Alsabaah.iq

Bitcoin falls below $86,000 amid investor reluctance

Cryptocurrencies saw a sharp decline on Monday, reviving a widespread sell-off that appeared to have subsided in previous days.

Bitcoin fell as much as 6% to below $86,000 during early Asian trading, while Ether dropped more than 7% to below $2,800, and Solana recorded a 7.8% decline.

This decline comes after a weeks-long sell-off that began when nearly $19 billion in debt-funded bets were liquidated in early October, days after Bitcoin hit a record high of $126,251.

The easing of selling pressure last week allowed the cryptocurrency to recover some of its gains, rising above $90,000 before falling back again.

Shafaq.com