The American withdrawal from Iraq: between illusion and reality

One day later, on September 30, 2026, the withdrawal of the United States and international coalition forces from Iraq will reach its announced and final date. Thus, a military phase that has extended, in various forms, since 2003 will end, and the Iraqi state will enter a new phase in which it is supposed to bear greater responsibility for its security, its airspace, the pursuit of ISIS, and the protection of its institutions and borders. But the problem begins precisely here, because the end of the foreign military presence does not necessarily mean the completion of sovereignty, and the departure of the forces does not automatically resolve the question of who possesses power, who decides to use it, and who has the ability to protect the state when it is threatened. Iraqtravel guides

The official Iraqi discourse has treated September 30 as a moment of restoring sovereignty, a description that is politically understandable, but not sufficient from a strategic standpoint. Sovereignty is not merely the absence of foreign forces from the land, but rather the state’s ability to monopolize security and military decisions, protect its airspace, pursue armed groups outside its institutional structure, and prevent its territory from being used as a platform for others’ conflicts. Therefore, the day after the withdrawal will, in reality, be the most difficult test for the Iraqi state, not the end of the test.

The most striking paradox is that the withdrawal will be completed by the end of September, while Iraq has not yet resolved the issue of weapons outside the state’s full control. Prime Minister Ali al-Zubaidi has moved from the date he previously proposed to end the issue of the factions’ weapons on September 30 to a new plan ending on June 30, 2027. According to the announced plan, the process begins with a ninety-day de-escalation phase during which the factions refrain from launching attacks, in exchange for not being targeted by the American forces. Then the process of transferring weapons to the authority of the state will begin gradually until the end of next June. The American envoy confirmed that Washington and Baghdad agree that, by that date, the state will have the military monopoly.

But the problem is that this timetable does not have the consensus of the factions; some of them demanded that the deadline be extended to the end of 2027, while reservations appeared within the same coordination framework about setting a binding date, considering that setting a strict time limit may complicate negotiations with the armed factions. Herein lies the gray area that Iraq will find itself in after September 30: foreign forces leave, but the state’s monopoly on weapons is not achieved on the same day. This means that the state will enter a new phase and is required to manage the balance between armed forces that possess military and political capabilities, and a declared governmental commitment to restoring the power to the institutions of the state.

This is the difference between withdrawal and sovereignty; withdrawal is a military decision that can be scheduled and implemented, while sovereignty is a long institutional process that does not begin and end with a timetable. If foreign forces leave and the power remains distributed between the state and multiple loyalist factions, the vacuum left by the withdrawal will not necessarily be a geographical vacuum, but may turn into a vacuum in the decision-making center. This does not mean that Iraq is entering a phase devoid of military capability, as Iraqi forces have proven in recent years their ability to carry out operations against the remnants of ISIS, including the use of Iraqi F-16 aircraft in airstrikes targeting the organization’s hideouts in the Kirkuk and Salah al-Din regions. In September alone, Iraqi forces carried out airstrikes against the organization’s positions, and also conducted continuous ground and security operations.

But the existence of this capability does not negate another question: Can the Iraqi system maintain the same level of efficiency without international support in the areas of intelligence, surveillance, reconnaissance, technical support, training, and maintenance? This is the real test that will begin after the withdrawal. Iraq is not starting from scratch, but it also does not transition from dependence on the coalition to self-sufficiency simply by the departure of the last foreign soldier. More importantly, ISIS is no longer a force controlling cities and territories as it was before 2017, but it has not disappeared from the security landscape. On September 27, the village of Al-Malha in Kirkuk Governorate was attacked with mortar shells, and security sources reported the death of a woman and the injury of civilians. On the same day, Iraqi forces clashed with militants wearing suicide belts near Altun Kupri, resulting in the death of two of them and the injury and arrest of a third. These incidents do not mean that ISIS has returned to its former strength, but they confirm that the organization still possesses the ability to move, hide, and carry out operations in rural, mountainous, and desert areas. Therefore, the question after the withdrawal is not: Has ISIS returned? But the question is: Can the Iraqi state prevent the remnants of the organization from turning areas with fragile security into spaces to rebuild its capabilities? Iraqtravel guides

Hence, Kirkuk and the contact zones become more important; the disputed areas are not just a security geography, but an area where the responsibilities of the Iraqi army and the Peshmerga intersect, and the issue of security coordination becomes complicated. Any weakness in coordination can turn into a loophole that the organization can exploit. Therefore, the American withdrawal puts Baghdad and Erbil in front of the necessity to move from situational coordination to building a more clear joint security system in the areas where responsibilities overlap.

In the Kurdistan Region, however, the matter is more sensitive. The withdrawal is not limited to leaving bases in Baghdad or the federal areas, but also includes the forces and defense systems present in the region. The Ministry of Peshmerga Affairs announced on September 28 that the departure of US and coalition forces on September 30 would leave the region without an air defense system, and considered that protecting the region’s airspace, as part of Iraqi airspace, falls under the responsibility of the federal government. Herein lies one of the most sensitive paradoxes of the new phase. The Kurdistan Region does not have an independent decision regarding air defense, because the airspace is part of Iraqi sovereignty, while its own capabilities in this field are limited. Thus, the Kurdish question after the withdrawal becomes an Iraqi question as well: Can Baghdad provide protection for the region’s airspace as it provides it for the rest of Iraq? And can the security relationship between the Iraqi army and the Peshmerga be transformed from a temporary arrangement into a genuine federal defense system?

This question becomes even more important due to the attacks the region has suffered in recent months. On September 28, three marches targeted a camp of the Iranian Kurdish opposition in the Koya area, southeast of Erbil, continuing a series of attacks on sites within the region during the regional escalation. This means that the region is entering a phase of withdrawal in a volatile regional environment, not in a stable security situation where the departure of the American defense umbrella can be treated as a mere administrative transition. Conversely, on September 21, Kurdistan witnessed an important institutional step represented by the official announcement of the unification and reorganization of the Peshmerga forces under the Ministry of Peshmerga Affairs, after many years of two military structures linked to the two main political forces in the region. The ministry announced that the forces are now within a unified command and control structure, while the presidency of the region confirmed that the unification represents the beginning of a new phase. However, the value of this step should not be measured by its political celebration alone, but rather by what it will produce on the ground. Institutional unification acquires its true meaning when military decision-making becomes unified, the chain of command is clear, funding, arming, and training are subject to a single institution, and loyalty is to the institution, not to political forces. Different readings have already emerged regarding the extent to which this transformation has been practically completed, making the next stage the actual test of unification, not merely its announcement.

Here, the paths of Baghdad and Erbil can converge at a single point; Baghdad is required to confine weapons to the state, and Erbil is required to transform the unification of the Peshmerga into a stable military institution; and in both cases, the legal formula alone is not enough. The modern state is not based only on the existence of institutions that bear official names, but rather on the existence of a clear decision-making chain capable of implementing what it decides. Therefore, the withdrawal of the United States places Baghdad and Erbil before an opportunity and a test at the same time; the opportunity lies in redefining the Iraqi security relationship on the basis of the state and institutions, and the test lies in the ability of the two parties to build joint defense arrangements that do not make the region a security zone separate from Iraq, and do not make Baghdad view the security of the region as a secondary issue; and if Iraqi airspace is one constitutionally, then the responsibility for protecting it must also be one in practice.

On the political level, Iraq will enter a more sensitive phase in its relationship with Washington and Tehran after September 30. The direct American withdrawal will reduce the American military presence inside Iraq, but it does not mean the end of the Iraqi-American relationship. Other forms of security, intelligence, and defense cooperation may continue through new bilateral arrangements, which makes the military withdrawal different from a political and strategic separation. At the same time, the end of the American military presence removes one of the main arguments used by armed factions to justify the continuation of their weapons. However, this does not mean that the issue of weapons will end automatically. Armed factions have announced that they link giving up weapons to the withdrawal of foreign forces, while the government says that the state’s monopoly on weapons is necessary to move to the new phase. Iraqtravel guides

Thus, after September 30, the question may shift from one about the presence of foreign forces to a more profound one: What does the state do when there is no longer a foreign presence that can be held responsible for security lapses? At that point, the government’s ability to impose unified rules, manage weapons, protect airspace, control borders, and deal with internal threats will become the standard by which the state will be measured. From this perspective, the relationship with Iran must also be viewed without simplification; Iraq is located in a region where Iranian, American, and Turkish interests overlap, and it cannot erase this reality simply by withdrawing a military force from its territory. What is required is not for Iraq to move from one umbrella to another, but rather to build the capacity of a state that allows it to manage its foreign relations from a more balanced institutional position.

As for the Kurdistan Region, it will face a more complex equation: the need for continued international cooperation on the one hand, and the need to develop its defense capabilities within the Iraqi framework on the other. Therefore, the practical option does not seem to be in refusing to withdraw, nor in ignoring its risks, but rather in building new arrangements that include air defense, intelligence sharing, coordination between the Peshmerga and the Iraqi army, and continued training and technical support through bilateral relations with the countries that participated in supporting Iraq and the region during the past years.

The most dangerous thing that could happen is for Iraq to treat September 30 as the end of the problem, when in reality it is the beginning of a new phase of responsibility. The withdrawal of foreign forces may close a military chapter, but it opens a more difficult political and security chapter. In this chapter, the question will not be: Did the Americans withdraw? That is a given. Rather, the question will be: Can the state fill the space left by the withdrawal? A state that wants full sovereignty needs a capable army, an effective air force, air defenses that protect its airspace, intelligence agencies that have information before danger occurs, political institutions capable of making decisions, and weapons that no other party disputes. It also needs a clear federal relationship between Baghdad and Erbil, because security in Iraq cannot be divided in a way that makes a threat in Kirkuk a federal issue and a threat in Erbil a regional issue, while the airspace, borders, and regional threats are one and the same.

Therefore, the American withdrawal should not be viewed as a complete victory, nor as an inevitable catastrophe. It is a strategic event that shifts responsibility more heavily onto the Iraqi state, while simultaneously revealing the level of preparedness of its institutions to bear that responsibility. If Baghdad and Erbil succeed in transforming the post-withdrawal phase into one of building joint security institutions, the departure of foreign forces could mark a different beginning for the relationship between the state and its institutions. However, if weapons remain dispersed, security decisions fragmented, air defense absent, and federal coordination fragile, then the withdrawal alone will not create sovereignty. Sovereignty does not begin with the departure of foreign soldiers and end at the borders. Sovereignty begins when decisions regarding war and peace, weapons, defense, and security become a single institutional decision. On September 30, a long military presence will end, but the real question will begin the following day: Has Iraq become capable of protecting itself, or has it merely moved from a stage of dependence on foreign power to a stage of testing its ability to build its own strength?

Shafaq.com

Between concessions and tensions… who will open the door to completing the cabinet?

MP Hamid Abbas stressed on Wednesday the necessity of turning the page on political disputes and prioritizing the supreme national interest among all parties and forces to ensure the completion of the cabinet formation within the specified timeframes and to enable state institutions to perform their duties more effectively and stably.

Abbas told Al-Maalouma, “The continued wrangling and bickering over filling the remaining ministerial portfolios does not serve the path of political and executive stability, but rather negatively impacts the pace of service delivery and the follow-up on strategic projects awaited by the Iraqi public.” He explained that “the current stage requires genuine cooperation and transcending narrow interests.”

He added that “completing the cabinet with ministers who possess competence, integrity, and administrative ability is a fundamental step to enhance institutional performance and prevent any administrative vacuum that could affect the reconstruction and development process.” He called on “political blocs to intensify consultations and make mutual concessions in order to resolve this issue and proceed with the government program without obstacles.”

Almaalomah.me

At Trump’s invitation, al-Zaidi participates in a regional meeting in New York

Iraqi Prime Minister Ali Faleh al-Zaidi participated on Tuesday evening, Baghdad time, in a multilateral meeting called for by US President Donald Trump, on the sidelines of the 81st session of the United Nations General Assembly in New York.

The Prime Minister’s Media Office stated in a statement received by Shafaq News Agency that the meeting was attended by the heads of delegations from Saudi Arabia, Bahrain, Kuwait, the UAE, Qatar, Oman, Jordan, Lebanon, Syria, Egypt, and Turkey, in addition to the United States of America. FinancialNews Reports

The statement added that the meeting addressed a number of regional and international issues and files, most notably strengthening security and stability, protecting global trade and securing supply chains, as well as maintaining development levels in the region’s economies.

Iraqi Prime Minister Ali Faleh al-Zaidi arrived in New York on Monday to participate in the 81st session of the United Nations General Assembly.

Shafaq.com

Al-Zaidi is campaigning in New York to accelerate oil projects and strengthen economic partnerships.

In New York, Iraqi Prime Minister Ali al-Zaidi discussed economic and energy developments with the International Monetary Fund, HKN, and ExxonMobil, stressing the government’s intention to accelerate oil projects and expand partnerships with international companies, in addition to proceeding with fiscal policy reform. FinancialNews Reports

This came in separate statements issued by his media office early Wednesday morning, on the sidelines of his participation in the 81st session of the United Nations General Assembly.

During his meeting with Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund, Al-Zaydi discussed the repercussions of the crisis in the region and its impact on markets, prices, supply chains, and inflation rates, as well as its effects on energy consumption and oil prices.

He stressed that the government is proceeding with restructuring the basic pillars of fiscal policy in Iraq, through expanding the automation system and gradually moving towards a program and performance budget within the 2027 budget project, while Azour confirmed the Fund’s readiness to continue cooperation with Iraq and strengthen the path of economic and financial reforms.

In another meeting with the chairman of the board of directors of the American company HKN, Ross Perot, Al-Zaidi called on the company to “redouble its efforts, accelerate the pace of work, and increase execution hours” in its projects and contractual obligations in Iraq, especially with regard to increasing oil production.

He noted the government’s intention to organize the Baghdad Energy Conference, which will witness the announcement of new exploration blocks in Iraq, stressing that the government will work to overcome obstacles and address problems that could delay the implementation of projects and companies’ commitments.

Al-Zaidi also discussed with ExxonMobil CEO Darren Woods prospects for cooperation and partnership in the areas of oil exploration and development of operating fields, stressing the importance of expanding partnerships with major international companies and benefiting from their expertise and modern technologies to develop the oil sector and enhance investment efficiency in natural resources.

Shafaq.com

Central Bank: Iraq’s exports reached $19.55 billion in the first quarter of 2026

Preliminary data from the Central Bank of Iraq showed that the country’s exports reached $19.55 billion during the first quarter of 2026, compared to imports of $10.27 billion, including shipping and insurance costs. FinancialNews Reports

According to the balance of payments table seen by Shafaq News Agency, crude oil exports amounted to $18.64 billion, oil products to $762.2 million, while other exports recorded $148.5 million.

Imports were distributed between $1.35 billion for the government sector and $8.92 billion for the private sector.

The trade balance recorded a surplus of $10.82 billion, according to the central bank’s calculation, which compares exports to imports valued at $8.73 billion after excluding shipping and insurance costs.

The services account recorded a deficit of $3.39 billion, with payments of $4.95 billion and receipts of $1.56 billion.

The data showed a current account surplus of $7.98 billion.

Shafaq.com

Washington to Shafaq News: We are focused on completing the withdrawal of our forces from Iraq by September 30

The US State Department confirmed on Wednesday that the United States is proceeding with the withdrawal of its military forces from Iraq by September 30, while it did not specify its position on a plan under which the process of disarming factions would extend to mid-2027. FinancialNews Reports

A spokesperson for the US State Department, responding to a question from Shafaq News Agency, said that Washington is proceeding according to the transitional schedule agreed upon with Baghdad to end the military operations of the coalition forces in Iraq, and is focused on completing the withdrawal of its forces by September 30, coinciding with the announced end of Operation Inherent Resolve.

He added that the move reflects the growing capabilities of the Iraqi security forces, including the Peshmerga forces, and represents a new phase in relations between the two countries.

The spokesman reiterated Washington’s support for Prime Minister Ali al-Zaidi’s efforts to extend Iraq’s sovereignty, prevent attacks within or originating from its territory, and build a partnership that serves the interests of both countries, referring to what President Donald Trump announced during his meeting with al-Zaidi at the White House on July 14.

Shafaq News’ question concerned whether the Ministry of Foreign Affairs had been informed of a phased action plan to postpone the complete disarmament of the factions until mid-2027, and whether it believed that this date was consistent with Baghdad’s commitments to restrict weapons to the state.

This comes after al-Zaydi announced, in an interview with the New York Times, a plan that begins with a 90-day deadline, followed by the handover of weapons by the factions, to be completed by June 30, 2027. The Iraqi government had linked accelerating the resolution of the issue to the end of the international coalition’s mission on September 30.

Following a meeting between al-Zaidi and US Secretary of State Marco Rubio in New York this week, the US State Department said the two sides agreed on the importance of dismantling what it called “terrorist militias” and preventing attacks from Iraqi territory.

The Prime Minister’s media office said that Al-Zaidi confirmed during the meeting his government’s determination to proceed with measures to restrict weapons to the state.

Shafaq.com

Al-Maliki reveals to the US chargé d’affaires a timeframe and program for restricting weapons by September 30

On Wednesday, Nouri al-Maliki, head of the State of Law Coalition, discussed with Steven Fagin, the acting US ambassador to Iraq, relations between the two countries, the latest political and security developments in Iraq and the region, and ways to enhance cooperation between Baghdad and Washington. FinancialNews Reports

During his meeting with Fagin in Baghdad, Maliki stressed the importance of developing relations between Iraq and the United States on the basis of mutual respect and common interests, especially in light of the Strategic Framework Agreement concluded between the two countries.

Both sides noted the importance of the Prime Minister’s recent visit to Washington last July, and its contribution to strengthening bilateral relations and opening new horizons for cooperation in a number of fields.

On the security front, Maliki affirmed that Iraq is proceeding with addressing the issue of restricting weapons to the state in accordance with the constitution and the law, and in a way that preserves the country’s security and stability. He pointed out that work is underway through the committee formed by the coordination framework to reach a clear and specific program, and stressed that addressing this issue must be done through dialogue and understanding and in accordance with constitutional and legal contexts.

He pointed out that there is a time limit and a program that will be announced on September 30 regarding restricting weapons to the state, noting at the same time that dealing with these issues should be done in a balanced and simultaneous manner that preserves Iraq’s sovereignty and national interests.

Regarding the attacks targeting neighboring countries, Maliki reiterated Iraq’s position rejecting the use of its territory as a launching pad for attacks on any country, whether by Iraqi or non-Iraqi groups, stressing the need to wait for the results of official investigations and not to issue premature statements or conclusions before they are completed.

He added that Iraq is looking forward to a new phase characterized by stability, construction, reconstruction, and enhanced services, and to taking advantage of the end of the foreign presence phase to move to a broader phase of economic and investment cooperation, calling on American companies to come and contribute to development and reconstruction projects in Iraq.

For his part, Fagin affirmed his country’s desire to continue cooperation with Iraq and strengthen the economic and investment partnership, noting that the United States seeks to support Iraq in strengthening its relations with its Arab neighbors and expanding areas of cooperation between the two countries, and stressing the keen interest of a number of American companies to work and invest in Iraq, and the need to create a suitable environment to enhance their presence in the Iraqi market.

At the conclusion of the meeting, both sides stressed the importance of continued communication and dialogue between Baghdad and Washington, which contributes to strengthening bilateral relations, supporting Iraq’s security and stability, and serving the common interests of the two countries and the stability of the region, according to a statement issued by Maliki’s media office.

Shafaq.com

Central Bank moves to lower dollar exchange rate against Iraqi dinar

The Central Bank of Iraq has taken a new set of measures aimed at reducing the gap between the official and parallel exchange rates, and restoring stability to the dollar exchange rates in local markets. IraqEconomic Reports

An informed source at the Central Bank of Iraq stated that these measures were taken due to the rise in the exchange rate of the dollar against the Iraqi dinar in local markets on Saturday, exceeding the level of 160,000 dinars per 100 dollars.

The bank continues to take measures and policies to develop the banking environment, raise the efficiency of the financial system, and provide the necessary elements to support sustainable economic growth, thereby achieving long-term financial stability and maintaining the stability of the exchange rate and the integrity of financial channels.

Earlier yesterday, the Central Bank of Iraq confirmed that it continues to finance foreign trade according to approved purposes and channels, while noting that foreign reserves meet all demands for foreign currency.

The bank said in a statement that “in light of what some media outlets are reporting about rising prices and a slowdown in market activity, the Central Bank of Iraq announces that it has sufficient foreign reserves to meet the demands for foreign currency for financing foreign trade, settling bank cards, and travelers’ requests for cash dollars at the official approved exchange rate.”

He added that “the rise in the exchange rate in the local markets is due to market speculation, expectations, and the misuse of geopolitical conditions in the region to disrupt the economic and financial situation by some beneficiaries of this situation,” stressing “his continued financing of foreign trade according to the approved purposes and channels, in a way that ensures the smooth flow of imports and the provision of the needs of the local market.”

According to the statement, the Central Bank of Iraq called on citizens to “rely exclusively on official information and data issued by it, and not to be swayed by news or information circulating through unreliable sources,” indicating that in case of any violations or inquiries, citizens can submit complaints and reports through the official complaints website of the Central Bank of Iraq.

Burathanews.com

Al-Kinani: Washington has set 10 points for the continued transfer of Iraqi funds

Economic and strategic expert Nasser al-Kinani revealed on Monday that the United States has set ten conditions for the continued transfer of Iraqi funds, including the surrender of weapons. He emphasized that these funds belong to Iraq and are not a US grant.

Speaking to the Information Agency, al-Kinani stated, “The United States has set ten conditions for the continued transfer of funds to Iraq, including the surrender of weapons and other matters, even though these funds are Iraqi and no entity has the right to withhold them from Iraq.”

He added, “Any funds Iraq needs must be requested by the Central Bank of Iraq from the US Federal Reserve for transfer, even though these funds are Iraqi revenues from oil sales and are not American charity or a grant.”

He explained that “the solutions are simple; a request can be submitted to the United Nations to confirm that Iraq is not indebted and that controlling Iraqi funds constitutes an infringement on Iraqi sovereignty.” He also noted that “the Iraqi negotiator was weak from the beginning and was unable to defend the rights of the Iraqi people.”

Al-Kinani pointed out that “an agreement was reached in 2010 to end the transfer of Iraqi funds to the Federal Reserve, and it included three obstacles imposed by the United States, which previous and current Iraqi governments have been unable to overcome.”
He added that “the argument that funds were going to entities claiming financial dues from Iraq has ended, especially after the payment of the last amount claimed by Kuwait, which was $1.65 billion.” He considered that the absence of other entities claiming financial dues from Iraq eliminates the justifications for continuing to control Iraqi funds.

Almaalomah.me

Warning of a “deep recession” in Iraq as trade and finance decline

On Monday, economist Manar Al-Obaidi warned of signs of a significant decline in Iraqi economic activity, particularly in the commercial sector, indicating that the decline in the Central Bank’s foreign currency sales, the decrease in imports, and the decline in bank financing could push the economy into a more pronounced recession. FinancialNews Reports

Al-Obaidi said in a post seen by Shafaq News Agency that “so far, there are no official integrated indicators that accurately show the growth or decline rate of Iraq’s GDP during 2026, except for the International Monetary Fund’s forecasts that indicated the possibility of the Iraqi economy contracting by about 6.8% during this year.”

He added that “reading a number of available indicators gives clear signs of a noticeable decline in economic activity, especially in the commercial sector, which is one of the most important sectors in Iraq after the oil sector and the government sector.”

He explained that “the Central Bank of Iraq’s sales of foreign currency have declined by more than 30% compared to last year, and official export data from a number of countries exporting to Iraq indicates a decrease in Iraq’s imports from them by more than 20%.”

Al-Obaidi pointed out that “these indicators, coinciding with the decline in financing provided by government and private banks, mean that a wide number of economic sectors are under increasing pressure, and the continuation of this trend may push the economy into a more pronounced recession.”

He explained that “in such circumstances, the state’s role should come through a package of economic incentives that help restore economic activity to its normal levels, whether through reducing some fees and customs tariffs, or granting temporary tax exemptions and facilities, or increasing the volume of financing facilities and launching easy financing initiatives that stimulate demand, investment and commercial activity. What is happening in some cases is going in the opposite direction.”

He added that “imposing procedures that require the payment of taxes and customs duties in advance before implementing the external transfer may lead to an increase in the financial and procedural burdens on traders and companies at a time when they are already suffering from weak liquidity, declining demand and difficulty in obtaining financing.”

He added that “the likely outcome is not necessarily an increase in government revenues, but may be a decrease in the volume of official transactions, and an increase in importers resorting to the parallel market to obtain foreign currency to meet import needs.”

He explained that “such measures may be understandable in an economy experiencing high growth and rapid business activity, where the need to control demand or increase government revenue is a clear priority.”

But he added that “applying it at a time when economic pressures are intertwined with geopolitical tensions, and amid signs of declining business activity, finance, consumption and investment, may increase the pressures rather than address them, and may push the economy from a slowdown into a deeper recession.”

Al-Obaidi stressed that “the main problem is that any economic measure should not be viewed in isolation from the rest of the indicators.”

He stressed that “before implementing any new policy, its economic objective must be clearly defined: Is the goal to increase revenues? Or to reduce the demand for the dollar? Or to regulate imports? Or to combat tax evasion? And what will be the impact of achieving this objective on trade, growth, employment, prices and the private sector?”

He pointed out that “the assumption that imposing additional fees or obligations will automatically lead to an increase in state revenues while the volume of trade and imports remains the same is an unrealistic assumption.”

He explained that “the higher the cost of procedures and the more complicated official trade routes become, the more natural it is for some economic activity to decline or move to other routes.”

He warned that “the greatest danger is that the repercussions of this will not be limited to traders or companies only, but will extend to the labor market, which already suffers from high unemployment rates, which may add greater economic and social pressure on the state in the coming period.”

Al-Obaidi concluded by saying that “economic policies during times of slowdown should be based on stimulus first, and that every measure should have clear targets and measurable indicators, with its impact on the economy as a whole being studied before its implementation, not after its results appear.”

Shafaq.com