In the midst of an economic crisis, Iraq acquires a new government

Speaker of the Iraqi Parliament Mohammed Al-Halbousi welcomes former intelligence chief Mustafa Al-Kadhimi (in blue suit) to Baghdad on May 6.
Speaker of the Iraqi Parliament Mohammed Al-Halbousi welcomes former intelligence chief Mustafa Al-Kadhimi (in blue suit) to Baghdad on May 6. IRAQI PARLIAMENT MEDIA OFFICE / VIA REUTERS

After six months of political crisis, Iraq has established a government. Former intelligence chief Mustafa Al-Kadhimi, 53, won the confidence of parliament on the night of Wednesday May 6 to Thursday May 7.

The Shia, Sunni and Kurdish parties, however, left him no leeway to compose the "Solutions firm" which he called for in the face of the conjunction of crises. Clinging tooth and nail to the denominational and ethnic distribution system of posts, which has favored corruption and clientelism since 2003, each camp and party defended its share of ministerial portfolios and its candidates.

Only fifteen out of twenty-two ministers were endorsed. No names have been proposed for petroleum and foreign affairs, which are still disputed. Aside from prominent interior and finance figures, "Most of them have profiles of directors of administration: neither politicians nor high-flying technocrats", comments an observer.

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The spectacle of political arrangements carried out until the last minute in the precincts of Parliament contrasts with the urgency of the crisis caused by the fall in oil prices and the Covid-19 pandemic, which left almost 100 people dead in the country. Revenues from oil exports for April confirm bleak predictions. Second OPEC producer country – the cartel of exporting countries – Iraq, which derives 95% of its revenues from black gold, saw its revenues drop to $ 1.4 billion ($ 1.3 billion). 'euros) in April, against 2.9 billion dollars in March.

In the medium term, with stagnating oil prices, reduced production quotas and the economic impact of the health crisis, the outlook is poor. In its quarterly report, published in early May, the World Bank anticipates a contraction of gross domestic product (GDP) by 9.7% in 2020, and a budget deficit of more than 29% of GDP, or "The worst annual performance in the country since 2003".

Crises are piling up for Baghdad

With mounting tensions between the United States and Iran on its soil, and a notable resurgence of attacks by the Islamic State organization, crises are piling up for Baghdad.

The vote on the 2020 budget law is one of the priority projects for Prime Minister Mustafa Al-Kadhimi. The project on which his predecessor, Adel Abdel Mahdi, was working, forced to resign in November 2019 by a large mobilization, must be reviewed. It was counting on a price of a barrel of crude at $ 56 – it was $ 30, May 6 – and wanted to be even more ambitious than the 2019 budget, almost in balance with $ 90 billion in revenue and $ 93 billion expenses.

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