The Iraqi Cabinet has said at its regular meeting in Baghdad tbat it will change public spending priorities, but gave few details.

It’s full statement is as follows:

The Cabinet held its regular meeting in Baghdad on Tuesday under the chairmanship of Prime Minister Mustafa Al-Kadhimi.

At the start of the meeting, the Prime Minister told the Cabinet that the new government intends to implement a comprehensive reform programme that will mark the beginning of a new phase for Iraq and puts the country on the right path.

The Prime Minister added that that the government is acutely aware of the difficulties faced by many Iraqis, is determined to respond to their demands, and fulfill  their aspirations, saying that “we have no option but to succeed.”

The Minister of Health briefed the Cabinet on the latest Covid-19 developments and outlined measures to strengthen Iraq’s capacity for rapid screening for the coronavirus.

New spending priorities

The Deputy Prime Minister and Minister of Finance, Ali Allawi, presented a detailed report on the current financial situation and the proposed fiscal and economic reforms.

Following discussions, the Cabinet agreed to change public spending priorities as part of the government economic reform programme.

The new spending priorities will affect the salaries of senior public sector staff, those who receive two salaries from the state and the pensions paid to the former detainees at Camp Rafha, and to former employees of the dissolved entities of the previous regime.

The Cabinet approved a draft law to ratify the Double Taxation Agreement between the Republic of Iraq and the State of Kuwait.

(Source: Govt of Iraq)

The Iraqi government says Iraq faces an immediate challenge caused by the decline in oil prices and the impact this has had on the economy and fiscal liquidity.

Officials say that the impact of the fall in oil prices is compounded by other weaknesses caused by decades old policies of a command economy, and by the approach to the economy by successive Iraqi governments over the past seventeen years.

These policies, they add,  have led, amongst other things, to an exponential increase in the size of the public sector, low levels of private investment, mismanagement and administrative corruption.

According to official figures, salaries and staff allowances in the public sector constitute approximately 60% of public spending, and this does not include other expenditure on daily activities of ministries, while spending on investment projects represents 2% of the budget.

The figures show that the number of people employed in the public sector in 2005 was around 850,000, but the number of state employees has risen to more than 3 millions now, and this figure does not include contract employees or those on daily rates, costing Iraq US$36 billions annually, a ten-fold increase from US$3.6 billions annually a few years ago.

The new Iraqi Cabinet announced the establishment of the Emergency Cell for Financial Reform to lead the response to the crisis, under the chairmanship of the Prime Minister, and with the membership of the Ministers of Finance, Foreign Affairs, Planning, the Governor of the Central Bank, the Secretary General of the Council of Ministers, and other officials as nominated by the Prime Minister.

The Cell’s mandate is to ensure financial liquidity, agree measures to rationalise public spending, diversify resources, and propose finance mechanisms for reconstruction and investment projects from outside government funding streams.

As well as rationalising public spending, the new Iraqi government says it will embark on an economic reform programme in Iraq that includes:

  • Supporting the expansion of the private sector and encouraging investment
  • Introducing automation and simplifying procedures in the public sector
  • Adopting a single budget account to monitor spending by ministries to reduce waste and corruption
  • Expanding the electronic payment system for salaries, and pressing ahead with the e-government project
  • Rebalancing Iraq’s economic relations with all neighbouring countries

Earlier this month, the Minister of  Finance, Ali Allawi, said that cutting spending was essential, and that this will include reductions to the the benefits and allowances of state employees, including those of senior officials, but he stressed that the basic salaries of employees will not be reduced, and that any cuts will not include employees or pensioners who earn 500,000 dinars or less a month.

(Source: Govt of Iraq)

Iraq’s Minister of Finance, Ali Allawi, arrived in Kuwait on Saturday for talks with senior officials.

Mr. Allawi held discussions with the Prime Minister of Kuwait, Sheikh Sabah Al-Khalid Al-Sabah, on bilateral relations and delivered a written message from Prime Minister Mustafa Al-Kadhimi.

He also held talks with the Minister of Finance, Barrak Al-Shitan, the Minister of Oil, Khaled Al-Fadhel, the Deputy Foreign minister, Khaled Al-Jarallah and other senior Kuwaiti officials.

The discussions focused on taking forward and implementing the decisions of the International Conference for the Reconstruction of Iraq held in Kuwait in February 2018, linking the electricity grids of the two countries, and rescheduling Iraq’s compensation payments to Kuwait.

The two sides also discussed encouraging Kuwaiti investment in Iraq, especially in the commercial and industrial sectors, and in infrastructure.

Mr. Allawi earlier visited Saudi Arabia where he held talks with Saudi officials on deepening economic and commercial and cooperation.

(Source: Govt of Iraq)

By John Lee.

Iraq’s Minister of Finance, Ali Allawi, on Saturday concluded a visit to Saudi Arabia, during which he delivered a message from Prime Minister, Mustafa Al-Kadhimi to King Salman bin Abdulaziz Al Saud.

During his visit, Mr. Allawi also held meetings with the Minister of Energy, Prince Abdulaziz bin Salman Al Saud, the Minister of Foreign Affairs, Prince Faisal bin Farhan Al-Saud, the Minister of Finance, Mohammed Al-Jadaan, the Minister of  Commerce and Investment, Majid Al Qasabi, and other senior Saudi officials.

In a television interview before leaving Baghdad, Mr. Allawi said that his discussions with Saudi officials will focus on encouraging Saudi companies and institutions, especially in the fields of energy and agriculture, to enter the Iraqi market, invest in Iraq and play a part in the reconstruction of the country.

He underscored that the new Iraqi government is pressing ahead with plans to balance Iraq’s economic relations with neighbouring countries, saying that the Iraqi market is open to all.

Iraq’s Finance Minister acknowledged during the interview that there were several factors that discourage investors from coming to Iraq, and highlighted the legal and administrative frameworks, the banking system and land acquisition rules as some of the key impediments that the new government is determined to address in order to create a welcoming, modern and efficient investment climate in Iraq.

Mr. Allawi’s visit to Saudi Arabia is the first in a series of planned official visits to countries in the region to strengthen economic cooperation and bolster trade.

(Source: Govt of Iraq)

From Rabee Securities; re-published with permission by Iraq Business News:

Mr. Allawi was born in Baghdad in 1947.

He left Iraq in 1958 with his family after the 14 July Revolution (the 1958 Iraqi coup d’état, that resulted in the overthrow of the Hashemite monarchy in Iraq that had been established by King Faisal I in 1921 under the auspices of the British) due to the family’s links to the monarchy.

Both his father, Abdul Amir Allawi served as minister of Health in several cabinets while his grandfather, Abdul Hadi Chalabi was head of the Senate.

Mr. Allawi is a nephew of Ahmad Chalabi (the founder of the Iraqi National Congress (INC) the President of the Governing Council of Iraq, and deputy prime minister).

A Shia Muslim, Allawi, went to school in the UK and graduated from MIT in the United States with a BSc in Civil Engineering in 1968. He completed an MBA from Harvard Business School in 1971, and studied at the London School of Economics.

After completing his MBA, he worked in international development for the World Bank. In 1978, he co-founded the Arab International Finance merchant bank. In 1992 he founded the Fisa Group which manages hedge funds. Between 1999 and 2002 he was a Senior Associate at St Antony’s College, Oxford. He was part of the Iraqi exile opposition community during Saddam Hussein’s rule in Iraq.

After 2003, he held the positions of Minister of Trade and Minister of Defense in the Interim Iraq Governing Council from September 2003 to 2004. From 2005 to 2006, he was Minister of Finance in the Iraqi Transitional Government.

He is also the author of several books including the widely reviewed “The Occupation of Iraq – Winning the War: Losing the Peace » in 2007.  In it he says, “The situation in Iraq is complex, dangerous and fraught with poor alternatives. But it is not hopeless.” In 2009, he published his second book, “The Crisis of Islamic Civilization”, and in 2014 he published the first major biography of King Faisal I, “Faisal I of Iraq”.

The New York Times Book Review called The Occupation of Iraq “…the most comprehensive historical account of the disastrous aftermath of the American Invasion.” In October 2009 the Washington Institute for Near East Policy announced that The Crisis of Islamic Civilization was awarded the Silver Prize of its annual book prize. In December 2009, The Economist named The Crisis of Islamic Civilization one of the Best Books of 2009.

He was elected as a Senior Visiting Fellow at Princeton University for 2008-2009 and has held several visiting scholar positions since.

Mr. Allawi started serving as both finance minister and acting oil minister in Mustafa Al-Kadhimi’s government.

At Rabee Securities we wish the new Minister best of luck at these difficult times.

(Source: Rabee Securities)

By John Lee.

Iraq’s Council of Representatives (Parliament) on Thursday approved fifteen candidates nominated by Prime Minister  Mustafa Al-Kadhimi for membership of the Council of Ministers (the Cabinet).

Reuters reports that voting on the oil and foreign ministries was delayed as the parties failed to agree on candidates.

The parliament rejected Kadhimi’s picks for justice, agriculture and trade; and, according to Xinhua, also rejected his nominees for culture and migration.

Members of the new Iraqi Cabinet are:

  • Prime Minister and Commander-in-Chief: Mustafa Al-Kadhimi
  • Minister of Defence: Juma’a Enad Saadon Khattab
  • Minister of Interior: Othman Ali Farhood Musheer al-Ghanimi
  • Minister of Health and Environment: Hassan Mohammed Abbas Salman
  • Minister of Finance: Ali Haidar Abdulameer Abbas Allawi
  • Minister of Communication: Arkan Shihab Ahmed Kadhim
  • Minister of Construction and Housing: Nazineen Mohammed Wassaw Sheikh Mohammed
  • Minister of Education: Ali Hameed Mukhlif
  • Minister of Higher Education, Science and Technology: Nabil Khadim Abd Al-Sahib
  • Minister of Electricity: Majid Mehdi Hantosh
  • Minister of Industry and Minerals: Manhal Aziz Mahmoud
  • Minister of Labour & Social Affairs: Adil Hashush Jabir Jassim
  • Minister of Planning : Khalid Battal Najim Abdullah
  • Minister of Youth and Sport: Adnan Dirjal Matar Jasim
  • Minister of Transportation: Nasir Hussein Bander Hamad
  • Minister of Water Resources: Mehdi Rasheed Mehdi

Prime Minister Al-Kadhimi will submit to Parliament nominees for other Cabinet posts at a later date.

During the parliamentary session in Baghdad, the Prime Minister told MPs that the new government will create a consultative framework that brings together all blocs, parties, women organisations, the protest movement, professional bodies and trade unions so that together, Iraqis can overcome current crises and challenges.

A new programme for government

The Prime Minister also set out the key priorities of his government which include mobilising all resources to combat the coronavirus pandemic, preparing for early elections, submitting a special draft budget law to address the economic crisis, ending internal displacement in Iraq and protecting the country’s sovereignty and security.

Prime Minister Al-Kadhimi called on all Iraqis to work together, saying that the challenges facing Iraq are great, but they are not greater than our ability to address them.

Click here for details of the Iraqi government programme.

(Sources: Govt of Iraq, Reuters, Xinhua)

By John Lee.

Iraq is reportedly seeking financial assistance from the United States to help it deal with the coronavirus pandemic and collapsing oil revenues.

Bloomberg quotes Health Minister-designate Jaafar Allawi as saying:

“We have been promised by the United States government as part of this strategy between Iraq and United States to help us financially … I think there is a team negotiating now, or in the process of negotiation, to get Iraq some support, financial support, from America.”

More here.

(Source: Bloomberg)

From Middle East Monitor, under a Creative Commons licence. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

Iraqi protesters gathered in Tahrir Square in the capital Baghdad after the government scaled back some of its anti-coronavirus measures during the month of Ramadan, Anadolu Agency reported

The protesters held photos of Prime Minister-designate Mustafa Kadhimi with a red “X” on his face in rejection of his candidacy for the role.

Activist Ghassan Adel told the news agency that “any transitional government that brings with it party quotas is rejected not only in Tahrir Square, but in all the country’s protest arenas”.

Adel, who had been protesting in Tahrir Square for months, said: “The masses are stronger than tyrants, parties and politicians,” adding that “this government will not pass. If it is passed, we will overthrow it with escalatory measures.”

Another protester, Mohamed Diyab said: “Kadhimi is forming a government of corrupt parties to continue the looting of the country.”

“We are the country of civilisations and we will no longer accept those who are ignorant and thieves to rule us,” he added.

Earlier this month, Iraqi President Barham Salih named Kadhimi, the head of National Intelligence Service, as the country’s third prime minister-designate this year.

This came after Adnan Al-Zurfi resigned his candidacy after he failed to gather enough support to form a government. Al-Zurfi blamed “internal and external reasons” for the failure.

Al-Zurfi had been appointed after Mohammed Allawi withdrew his candidacy on 1 March after parliament twice failed to achieve quorum to approve his government.

By Ali Mamouri for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraqi PM designate readies cabinet to present to parliament

Mustafa al-Kadhimi, director of Iraq’s National Intelligence Service, is expected to present his cabinet to the Council of Representatives early next week.

On April 9, Iraqi President Barham Salih designated Kadhimi to form a new government within 30 days. Kadhimi is the third PM-designate this year. Mohammed Tawfiq Allawi and Adnan al-Zurfi previously tried, and failed, to form governments.

Kadhimi appears to have broad backing among Iraq’s political factions – all of the major Shiite parties, as well as the key Kurdish and Sunni blocs support him – with no major political opposition so far.

Click here to read the full story.

By Ali Mamouri for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraqi PM designate readies cabinet to present to parliament

Mustafa al-Kadhimi, director of Iraq’s National Intelligence Service, is expected to present his cabinet to the Council of Representatives early next week.

On April 9, Iraqi President Barham Salih designated Kadhimi to form a new government within 30 days. Kadhimi is the third PM-designate this year. Mohammed Tawfiq Allawi and Adnan al-Zurfi previously tried, and failed, to form governments.

Kadhimi appears to have broad backing among Iraq’s political factions – all of the major Shiite parties, as well as the key Kurdish and Sunni blocs support him – with no major political opposition so far.

Click here to read the full story.