Beyond diplomacy… Will Baghdad succeed in implementing the Washington agreements?

Iraqi Prime Minister Ali al-Zubaidi’s visit to the United States was not just a passing diplomatic meeting, but came at a pivotal time regionally and economically, in light of the challenges facing Iraq at the level of public finances, the need to attract investments, and the attempt to move from an economy that depends heavily on oil to a more diversified model based on production and investment partnerships.

The visit, which included a meeting between al-Zaidi and US President Donald Trump at the White House, had a main theme: shifting the Iraqi-American relationship from focusing on security issues to expanding economic and investment cooperation, with energy, oil, electricity, infrastructure, and technology issues at the forefront of the talks.

Both sides announced a shared desire to enhance economic cooperation, while Iraqi officials spoke of agreements and memoranda of understanding covering various sectors, amid questions within Iraq about the extent to which these agreements can overcome the experience of previous projects that, according to critics, remained within the framework of pledges and did not turn into tangible results.

Implementation Bet

In this context, Imad Al-Musafir, a political researcher close to the Coordination Framework (which brings together the ruling Shiite political forces in Iraq), believes that Al-Zaidi’s visit to the United States was of great interest within Iraqi political circles, especially in light of the circumstances the region is going through and their repercussions on the economic and social situation in Iraq.

The traveler told Shafaq News Agency, “Al-Zaidi’s visit was awaited by many across the Iraqi political spectrum, especially since Iraq and the region are witnessing major events that are reflected negatively or positively on services and social and living conditions.”

He adds that “what became clear from the visit is that it has an economic and investment character, and this is what Iraq needs at the present time,” noting that the importance of the agreements does not lie only in their signing, but in the government’s ability to turn them into real projects.

He explains that “signing memoranda of understanding and contracts is not the goal in itself, but rather the goal is to find something tangible on the ground, because some previous agreements had no practical effect and remained just ink on paper.”

The traveler affirms that “the Iraqi people hope that the Iraqi delegation in the United States will achieve what it aspires to,” noting that al-Zaidi’s economic background may help advance this path. MiddleEast news

He explains that “Al-Zaidi comes from an economic background, and we hope that this experience will be reflected positively on the Iraqi reality,” adding that any reform program that enjoys internal and external support can be an opportunity to improve the economic Situation.

Investment Environment

In the same vein, economic researcher Ahmed Eid believes that Al-Zaidi’s visit to the United States represents an important opportunity to rebuild the economic partnership between Baghdad and Washington, especially in the energy, investment and technology sectors.

But Eid confirms to Shafaq News Agency that its success will not be linked to merely signing agreements or memoranda of understanding, but rather to the government’s ability to transform them into real projects and investments implemented on the ground.

He says that the impact of the visit’s results on the living conditions and services of citizens requires a package of reforms, foremost among them restructuring the private sector to be a partner capable of attracting foreign investments, in addition to providing a stable and attractive investment environment, consolidating the rule of law, and restricting weapons to the state, which would enhance the confidence of international companies and encourage them to inject their capital into the Iraqi market.

He adds that combating corruption, holding those involved accountable, and recovering wasted funds are essential pillars for enhancing investor confidence, noting that investment needs, above all, an environment characterized by transparency, stability, and the protection of the law.

He points out that the government’s success in implementing these reforms, in parallel with the economic partnerships that may result from the visit, could gradually lead to improved services, job creation, and economic growth. He warns that the absence of these reforms could make the results of the agreements limited and unable to bring about tangible change in the Iraqi economy.

Energy is the Focus of Cooperation

For his part, Fahd al-Jubouri, a leader in the Wisdom Movement headed by Ammar al-Hakim, says that evaluating the results of the visit is linked to the content of the economic agreements that are being discussed, indicating that al-Zaidi obtained a political mandate from the coordinating framework regarding this path.

Al-Jubouri explained to Shafaq News Agency that “the economic agreements that will be signed, according to their contents, will reflect positively on the Iraqi reality and Iraqi society,” but he pointed out that judging their results requires waiting for the implementation phase.

He believes that “whether or not these agreements will be implemented is not something we can talk about now, and we cannot say for certain whether they will bring about a tangible change or not, but the clauses that were agreed upon regarding the energy fund, oil companies and others are things that we see as positive for the Iraqi people.”

He points out that Iraq is seeking to increase its oil production with the support of American companies, explaining that there is an anticipated economic strategy between Baghdad and Washington related to the entry of American companies into Iraq, especially in the oil and electricity sectors.

He affirms that “these two sectors represent some of the most important files in the agreements, and therefore they will have positive returns for the Iraqi people, pending the completion of the necessary political procedures.”

Partnership Transformation

Independent politician Iyad al-Janabi says that the nature of the Iraqi delegation accompanying al-Zaidi reflected the visit’s focus on the economy and investment, noting that the presence of businessmen and investors within the delegation represents a message that Iraq seeks to build economic partnerships with the United States.

Al-Janabi explained to Shafaq News Agency that “the visit was built on an economic partnership, and the delegation accompanying Al-Zidi is mostly businessmen and investors, and this is a message that Iraq is open to the United States in the fields of investment, energy and oil in particular.”

He adds that “the meeting was based on long-term economic partnerships, and this message was successfully conveyed by Al-Zaidi, which is that Iraq wants to be a strategic and economic partner of the United States.”

Al-Janabi believes that the importance of the visit also stems from the nature of regional transformations, noting that the United States views Iraq as an important country from a geopolitical and economic perspective.

He says that “Iraq has an important geographical location, and this is what is driving the United States to develop economic and strategic relations with it.”

What distinguishes the visit, according to Al-Janabi, is the Iraqi government’s attempt to define the nature of the relationship with Washington more clearly compared to previous governments, with which the relationship was, as he described it, “ambiguous.” MiddleEast news

He explains that Al-Zaidi’s statements during the visit focused on the future and avoiding reopening past files, considering that the Prime Minister tried to present a speech based on economic interests and partnerships.

economic positioning

Al-Janabi believes that Al-Zaidi’s economic background played a role in determining the priorities of the visit, saying that Iraq needs a strong economic partner to help it attract funding and investment.

Al-Janabi continues his remarks by saying that Iraq may need funding in the future from international institutions such as the International Monetary Fund or support from European and Gulf countries, considering that a strong partnership with the United States may facilitate this path.

He adds that “investment means the entry of hard money and dollars into Iraq, and this will revive the economy,” noting Iraq’s need to develop infrastructure, production sectors, and increase oil capacity.

He points to the importance of diversifying oil export outlets and not relying on a single route, indicating the need to develop oil infrastructure and transport lines.

Energy and oil files are at the top of Baghdad’s priorities during the next phase, as Iraq seeks to attract major American companies to participate in production, energy and electricity projects.

Previous reports had mentioned talks with American companies operating in the energy sector, in addition to plans to enhance the participation of foreign companies in the development of oil fields and electricity and gas projects.

The Iraqi government is also banking on attracting foreign investment to reduce pressure on public finances, at a time when heavy reliance on oil poses a major challenge to any attempt to diversify the economy.

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84% of which is oil revenues… Iraq’s revenues exceed 33.7 trillion dinars by the end of May

Data from the Iraqi Ministry of Finance regarding the implementation of the federal budget up to the end of May 2026 showed that total revenues amounted to 33.747 trillion dinars, while oil revenues continued to dominate the state’s resources, constituting 84%.

According to data seen by Shafaq News Agency, oil revenues amounted to 27.270 trillion dinars, compared to 6.477 trillion dinars in non-oil revenues, equivalent to 16% of total revenues. Dailynews reports

On the expenditure side, the data showed that total expenditures amounted to 45.070 trillion dinars, of which 41.908 trillion dinars were current expenditures and 3.094 trillion dinars were for debt servicing, while capital expenditures amounted to 13.6 billion dinars.

Employee “salaries” compensation topped the list of expenditure items with a value of 25.556 trillion dinars, followed by social welfare with about 11.373 trillion dinars, then grants, subsidies, interest and other expenses with a value of 3.301 trillion dinars, in addition to 1.542 trillion dinars for commodity supplies and 108.3 billion dinars for service supplies.

In the investment budget, total spending amounted to 1.627 trillion dinars, with the investment program accounting for 915.9 billion dinars, followed by regional development with 605.9 billion dinars, and then petrodollar projects with 71.4 billion dinars.

As for the sectors, the buildings and services sector accounted for the highest investment spending at 992.4 billion dinars, followed by the transport and communications sector at 269.5 billion dinars, then the industrial sector at 249 billion dinars, and the education sector at 99.9 billion dinars, while the allocations for the agricultural sector amounted to 15.9 billion dinars.

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Security concerns prompt Washington to tighten protection measures for al-Zaidi

Tight security measures imposed to protect Iraqi Prime Minister Ali Faleh al-Zaidi during his visit to Washington caused flight operations to be suspended for hours at Ronald Reagan Airport, and hundreds of flights to be canceled or delayed.

A report by the American network “CBS News”, translated by Shafaq News Agency, stated that commercial flights stopped taking off and landing at the airport on Tuesday, from eleven o’clock in the morning until about three o’clock in the afternoon Washington time, due to security arrangements related to the movements of the Iraqi Prime Minister in the American capital.

The restrictions led to the delay of more than 300 flights and the cancellation of at least 126 others, according to data from FlightAware, a website specializing in tracking air traffic, amid cascading repercussions that affected the flight schedule in one of the busiest and most tightly controlled airspaces in the United States.

A senior U.S. administration official said the White House and the Federal Aviation Administration exchanged updates on al-Zaidi’s movements in an effort to limit the impact of security measures, and authorities allowed some planes that were waiting in the air to land, and others that were on the ground to take off.

The Federal Aviation Administration and the U.S. Department of Transportation declined to comment on the reasons for the disruptions or the nature of the security threats that prompted the flight suspensions.

According to the report, al-Zaidi’s convoy left the White House for the Pentagon at 1:30 PM, later than expected, while a security helicopter flew over the convoy as it passed through the airspace near the airport.

US President Donald Trump had received al-Zaidi at the White House to discuss the future of relations between Iraq and the United States, in the Iraqi prime minister’s first visit to Washington since taking office last May.

Trump extended his meeting with al-Zaidi and extended an unscheduled invitation for lunch, saying the meeting showed a “great rapport” between them, which led to an adjustment in the Iraqi delegation’s schedule and a delay in their move to the Pentagon.

The heightened security measures come amid the ongoing four-month-long US-Iranian war, fears that Iran or its affiliates might carry out operations inside the United States, as well as increased security warnings following attempts to assassinate President Trump, according to the report.

The airspace surrounding Ronald Reagan Washington National Airport has been under strict restrictions since the 2025 mid-air collision between an American Airlines passenger plane and a Black Hawk military helicopter, which killed 67 people and led to new rules on helicopter routes near the airport and the Pentagon.

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Exclusive: Baghdad and Washington prepare to sign 18 agreements and establish a $1 trillion development fund

An informed source revealed on Tuesday that Iraq will sign more than 18 agreements with the United States in various fields, while noting that there are agreements ready that will be signed soon. Iraqeconomic analysis

The source told Shafaq News Agency that “Prime Minister Ali al-Zaidi’s visit, which is considered historic as he is the first prime minister to be received with such warmth and attention, will lead to the signing of more than 18 partnership agreements in various fields, including politics, economy, industry, energy, oil, education, health, investment and armament, and that these agreements will strengthen the partnership between Iraq and the United States.”

He added that “Iraq is looking to establish a development fund in one of the American banks, not in the Federal Reserve Bank. According to initial data, the fund will be financed from the revenues of oil exported to the United States, in an amount of up to 500,000 barrels per day, which makes the value of the fund’s financing reach one trillion dollars, to finance investment projects and infrastructure projects, foremost among them electricity projects and other important projects.”

The source indicated that “there are agreements ready that have been finalized and discussed between the two sides, and they will be signed by the relevant officials and ministers accompanying Al-Zaidi with their American counterparts, which will constitute a positive step that reflects the strengthening of relations between the two countries.”

Earlier, US President Donald Trump announced that next week will see the announcement of a major oil partnership with Iraq, in addition to the conclusion of major trade deals.

Earlier, Al-Zaydi called on Iraqi businessmen in the United States, particularly members of the Christian community, to invest in the education, health and oil industries, and to participate in the reconstruction of the Nineveh Plain region.

Al-Zaidi arrived in the US capital, Washington, on Monday, at the head of a high-level delegation that included a number of ministers, officials, investors and business owners, for an official visit that will last for seven days.

Last month, Iraqi government spokesman Haider al-Aboudi announced that the cabinet had decided to establish a development fund project with international guarantees and contributions amounting to $150 billion to achieve economic stability through investment.

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Beyond the statements: Messages from the Trump-al-Zaidi meeting at the White House

In a meeting that carried multiple political, economic and security messages, US President Donald Trump received Iraqi Prime Minister Ali al-Zaidi at the White House on Tuesday evening, Baghdad time, in his first foreign visit since assuming the premiership, amid complex regional circumstances, most notably the renewed tension between the United States and Iran, and escalating fears of a wider confrontation in the region.

The meeting that brought the two sides together in the Oval Office was not just a protocol stop in Iraqi-American relations, but rather seemed to be an attempt to redefine the nature of the relationship between Baghdad and Washington, by moving from a phase that focused on the security and military file to a new phase that puts the economy, energy and investment at the forefront of priorities, while the files of weapons and regional influence remain strongly present on the table of discussion.

During the joint press conference, Trump announced that the United States does not see a need for a continued American military presence in Iraq, stressing that the next phase will depend on a broad economic partnership, especially in the oil sector, while Al-Zaidi stressed that his country is moving towards ending the mission of the international coalition in exchange for opening the door for American companies to invest in Iraq.

But behind the diplomatic language, the meeting addressed more sensitive issues, most notably the future of armed factions, the relationship with Iran, energy security, and the future of Iraq’s role in a region witnessing increasing tensions.

New partnership

During the meeting, the US president stressed that the relationship with Baghdad is entering a different phase, noting that the United States supported Iraq during the war against ISIS, but no longer sees a need for its forces to remain militarily in the country.

Trump said that “there is no need for an American military presence in Iraq,” while emphasizing Washington’s readiness to support Iraq’s security when necessary.

He noted that the United States and Iraq are moving towards a strong partnership in the oil sector, announcing that American energy companies will enter Iraq at levels he described as “unprecedented,” and that next week will witness the announcement of a major oil partnership and extensive trade deals between the two countries.

Trump also described Iraq as a country rich in resources and oil reserves, arguing that the next phase should invest these capabilities in strengthening economic cooperation.

The US president did not hide his political support for al-Zaidi, saying that he was interested in him becoming prime minister, considering that his rival was adopting inappropriate positions towards Washington (referring to Nouri al-Maliki).

Trump described al-Zaidi as a “great leader,” expressing his belief that he would remain in office for a long time, and said that Iraq was undergoing a transformation in its relationship with the United States.

Energy Hub

The energy file occupied a large part of the White House discussions, given Baghdad’s desire to attract American companies to develop the oil and gas sector, increase production and improve infrastructure.

Al-Zaydi said that Iraq wants a strong economic partnership with the United States, and that the end of the American military presence will be met with the entry of American companies into the Iraqi market.

He stressed that the relationship between the two countries should be based on economic and social ties, and not just on military cooperation.

He explained that Iraq, as one of the founding members of OPEC, demands a fair share of oil production commensurate with its capabilities, noting that the country paid a heavy price during the war on terror, which left widespread damage to the infrastructure.

Simultaneously with the White House meeting, Iraqi Oil Minister Bassem al-Abadi discussed in Washington with the president of the American company Chevron, Jake Sperring, opportunities to expand cooperation in the oil and gas sectors, develop production, and benefit from global expertise and technology.

This comes as part of a government initiative to attract major energy companies, diversify oil export outlets, and reduce the risks associated with dependence on the Strait of Hormuz.

The factional dilemma

The issue of armed factions was one of the most sensitive issues during Al-Zaidi’s visit, as the Iraqi Prime Minister confirmed that his government is proceeding with the implementation of the decision to restrict weapons to the state.

Al-Zaydi said that the Iraqi security forces have become capable of protecting the country, and that the phase following the end of the international coalition’s mission at the end of next September will witness full reliance on Iraqi security capabilities.

He added that the government had received quantities of weapons from some factions, and that it would continue to work with those who choose to engage in the political process, stressing that it would not allow any party to carry weapons outside of official institutions.

He explained in his statements that “there is no need for any factions after the end of September,” stressing that the state’s decision is to end the duality of weapons.

Washington had made it clear before the visit that it would assess its position based on “measurable actions and results,” not just political pledges, indicating that the issue of the factions would be a key criterion in evaluating the future relationship with Baghdad.

In this context, Ihsan Al-Shammari, head of the Center for Political Thought and professor of strategic and international studies at the University of Baghdad, believes that this issue will be central to the Washington talks.

Al-Shammari told Shafaq News Agency that regional developments will push the United States to take a tougher stance against Iranian influence and armed factions, noting that the US administration will demand swift action from al-Zaidi. Dailynews reports

He adds that the Prime Minister is facing mutual pressure between Washington on one hand, and the political forces and factions on the other, noting that the challenge before him is to achieve a balance that allows for the implementation of his government program.

Iran file

Iran was not absent from the meeting, as Trump described Tehran as a “great burden” on Iraq, noting that the region had gotten rid of, in his words, an entity that had been a source of pressure.

He also spoke about the US measures against Iran and the sanctions targeting it, stressing that Washington had given Tehran opportunities to reach an agreement but had responded to what he described as Iranian escalation.

These statements coincided with Trump’s announcement that his administration is working to include Iran and the Lebanese Hezbollah in a sanctions bill linked to the sanctions imposed on Russia.

In this regard, political researcher and advisor to the former Iraqi Prime Minister, Ayed Al-Hilali, believes that the regional dimension gives Al-Zaidi’s visit greater importance than just the bilateral relationship.

Al-Hilali told Shafaq News Agency that the escalating tension between Washington and Tehran, along with developments in Yemen and the Red Sea, presents Iraq with a difficult test in managing its balancing policy.

He continues, saying that Baghdad is required to protect its interests with the United States without engaging in a policy of alliances, warning that an escalation of the confrontation could raise the bar for American demands towards Iraq.

Internal debate

Inside Iraq, the visit faced objections from some factions and political forces who warned against the nature of the new relationship with Washington.

In this regard, Abdul Rahman al-Jazaeri, a leader in the Coordination Framework (which brings together the ruling Shiite political forces in Iraq), says that the escalation in the Gulf and the targeting of American bases further complicates the situation, noting that some factions still object to the monopoly on weapons and to economic and political openness with the United States.

Al-Jazaeri adds to Shafaq News Agency that Iranian-Iraqi relations have political, economic and ideological dimensions, and that any American pressure on Baghdad may affect these relations.

He points out that the future of the American presence in Iraq remains unclear, and that the visit is not only related to the economy, but also to Iraq’s position in major regional transformations.

In contrast, Abbas Al-Aqabi, a specialist in legal affairs and international agreements, believes that Al-Zaidi’s visit does not mean that Iraq is siding with one party at the expense of another.

Al-Aqabi told Shafaq News Agency that the visit came at the invitation of the US President, and that it included multiple files related to the economy, energy, investment, agriculture and industry, stressing that Iraq seeks to build balanced relations with Washington and Tehran.

He concludes at the end of his speech that the issue of restricting weapons came within the government program, and that the goal of cooperation with American companies is to provide an investment environment that the country needs, especially with the limited internal financial capabilities.

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As confirmed by Shafaq News, Baghdad and Washington are outlining a new military partnership.

Prime Minister and Commander-in-Chief of the Armed Forces Ali Faleh al-Zaidi directed the formation of an Iraqi committee to negotiate with the United States regarding the nature of the security and military relationship between the two countries, following the complete withdrawal of US forces operating within the international coalition to fight ISIS. Broadcast& Network News

The spokesman for the Commander-in-Chief of the Armed Forces, Sabah al-Nu’man, said in a statement received by Shafaq News Agency that al-Zaidi’s directive came after official talks he held, on Tuesday evening Baghdad time, with US Secretary of Defense Pete Hegseth, at the ministry headquarters in Washington, DC.

Al-Nu’man explained that the committee will be responsible for communicating with the American side to determine the nature of the future security and military relationship between the two countries, in light of preparations for the end of the mission of the American forces operating within the international coalition on September 30.

He stressed that the new relationship will be formulated within the parameters of Iraqi sovereignty and its requirements, and in a way that supports the full authority of the Iraqi armed forces over the country’s territory, as they are capable of protecting Iraq by land and air.

The talks between al-Zaidi and Hegseth included a comprehensive review of security and military relations between Iraq and the United States, as well as an agreement on a number of issues of common interest, including the continuation of intelligence sharing in the field of counter-terrorism.

The two sides also agreed to raise the level of coordination to dismantle the incubators and havens of terrorist organizations, and to develop cooperation in the areas of training, arming and raising the capabilities of the Iraqi armed forces in all their branches.

According to the statement, the talks also addressed expanding technical, technological and digital cooperation in security and military applications, in addition to equipment and armament, while emphasizing respect for Iraqi sovereignty.

Al-Nu’man had revealed, in a special interview with Shafaq News Agency prior to the meeting, Baghdad’s intention to establish a bilateral military partnership with the United States after the end of the international coalition’s mission, which includes training, arming, intelligence cooperation and raising the capabilities of the Iraqi armed forces.

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Washington supports the reactivation of the Kirkuk-Banias oil pipeline.

A U.S. State Department official announced Wednesday that Washington supports Iraqi and Syrian efforts to restart the crude oil pipeline between the two countries, in a move aimed at reducing the impact of disruptions to oil supplies through the Strait of Hormuz.

The official, according to Reuters, said the United States expects American companies to play a role in accelerating the rehabilitation of the Kirkuk-Banias pipeline, most of which has been damaged since the 2003 US invasion of Iraq.

He explained that the pipeline, once restarted, will extend from the oil fields in Kirkuk province to the western coast of Syria, making it one of the projects through which the countries of the region seek to diversify oil export routes and reduce dependence on the Strait of Hormuz.

The official noted that this project is part of a series of efforts by Middle Eastern oil producers to reduce their dependence on the strait, through which about 20 percent of the world’s oil and gas supplies passed before the outbreak of the US-Israeli war on Iran on February 28.

He added that the United States had reimposed a blockade on the Strait of Hormuz after attacks targeted ships within it, holding Iran responsible for those attacks.

Bloomberg reported on Tuesday that Chevron might contribute to rebuilding the pipeline.

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A government advisor explains how US interest rates control the movement of gold and the dollar in Iraq.

The Prime Minister’s financial advisor, Mazhar Muhammad Saleh, confirmed on Wednesday that US interest rates and the strength of the dollar are among the most prominent factors affecting the movement of gold prices globally, indicating that any change in the directions of the Federal Reserve (the US central bank) is directly reflected in the attractiveness of the yellow metal to investors and traders locally. News

Saleh told Shafaq News Agency that raising US interest rates pushes investors towards assets with returns, such as bonds and dollar deposits, at the expense of gold, which does not generate a periodic return, which often leads to a decline in demand for it and a drop in its prices globally.

He added that the rise in interest rates also contributes to supporting the strength of the US dollar, which makes buying gold more expensive for investors outside the United States because the precious metal is priced in green currency, noting that the reduction in interest rates reinforces the demand for gold as a safe haven, a store of value and a tool to hedge against inflation.

Saleh explained that the Federal Reserve kept interest rates unchanged at a range of 3.50% to 3.75%, while markets await its future directions regarding the course of monetary policy, noting that expectations of a future interest rate cut may support gold prices even before an actual decision to cut is issued.

The government advisor pointed out that Iraq, as a net importer of gold, is directly affected by global price movements, explaining that the local market is also affected by competition from the cash dollar, which represents an alternative store of value for traders and Iraqi citizens during periods of market volatility.

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Basra oil exports partially recover to 870,000 barrels per day in June

Official data from the Iraqi State Oil Marketing Company (SOMO) showed that the rate of crude oil exports transported by sea through Basra ports rose to about 870,000 barrels per day during the past month of June, recording a threefold increase compared to the month of May, following the partial resumption of flows through the Strait of Hormuz before security tensions caused it to be closed again. Financialnews subscription

Despite this relative recovery, official data indicates that oil exports are still far below pre-regional crisis levels, with Basra exporting about 3.6 million barrels per day last February.

In a related context, the average exports of Iraqi crude oil via the Turkish Ceyhan pipeline reached about 230,000 barrels per day during June, which represents about half of the pipeline’s usual historical rates. Crude oil produced from federal fields constituted about 176,000 barrels per day of the total quantities exported via the northern pipeline.

The Platts OPEC survey issued by S&P Global Energy showed that Iraq’s total crude oil production reached 4.22 million barrels per day last February, but the loss of southern export outlets and regional unrest led to a decline in the country’s total production to below 2 million barrels per day during the period from March to June.

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Exclusive: Parliamentary Finance Committee reveals gradual shift in Iraqi budget starting in 2027

Hussein al-Daraji, a member of the Finance Committee in the Iraqi Parliament, revealed on Wednesday that the legislative and executive authorities intend to gradually move towards implementing a “programs and performance budget” starting from next year, 2027, to ensure the regulation of spending and the protection of public funds. MiddleEast news

Al-Daraji told Shafaq News Agency in a special statement that the Parliamentary Finance Committee hosted Finance Minister Falih al-Sari last week to discuss the fundamental amendments to the draft budget law, where the change to the current work mechanism and the shift towards a “program budget” was discussed in detail.

Al-Daraji explained that the program budget for the year 2027 will include, in its first phase, the Ministry of Electricity and the governorates of Diwaniyah and Salah al-Din, indicating that the plan set for the 2028 budget will expand to include five ministries and five other governorates, so that the new structure will continue to be gradually generalized to the rest of the state institutions in subsequent years.

The member of the Finance Committee pointed out that the application of the program budget aims primarily to preserve public funds, and to control and regulate financial spending channels in accordance with the government’s strategic vision, specifically within the investment budget items.

This comes in conjunction with the Parliamentary Finance Committee hosting, on July 7, Finance Minister Faleh al-Sari and senior officials in the ministry, to discuss the financial and economic situation, and the mechanisms for preparing the draft federal general budget for 2027.

During the meeting, Uday Awad, Chairman of the Finance Committee, affirmed that the committee is committed to supporting and enacting laws that contribute to addressing financial challenges, developing non-oil resources, and enhancing the state’s financial sustainability.

For his part, Al-Sari confirmed that the 2027 budget project includes a phased plan to implement the program and performance budget, starting with a number of governorates as a pilot model, to be gradually generalized to include all governorates of Iraq.

It is worth noting that the Cabinet had approved last June, under the direction of Prime Minister Ali Faleh Al-Zaidi, the formulation of a “program budget” in coordination and joint cooperation with the World Bank and the Parliamentary Finance Committee, to advance the economic reform process in the country.

Following that, the advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, revealed that the Ministry of Finance has begun preparing the draft federal general budget law for 2027, in the first new budget that Iraq has begun to formulate after two years of not approving a federal budget.

The government’s commencement of preparing the 2027 budget comes after two years of the absence of an effective federal budget with approved schedules, as the 2025 budget schedules were not approved, nor was a budget law approved for 2026, despite the House of Representatives, under the government of former Prime Minister Mohammed Shia al-Sudani, approving the three-year budget law for the years 2023, 2024 and 2025.

The 2025 budget, in its updated form, could not be implemented after its schedules were not approved within the House of Representatives and the fiscal year ended, which prompted the Ministry of Finance to adopt a temporary disbursement mechanism at a rate of 1/12, based on the Financial Management Law, to secure salaries, governing expenses and basic obligations.

The 2026 budget was also not approved due to the political complexities and economic pressures resulting from regional tensions and energy market volatility, so Iraq continues to manage its spending according to the temporary spending mechanism while awaiting a new federal budget that will end this financial deadlock.

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