In Iraq's Fields of Black Gold, Thousands Lose Livelihoods

Local worker Muhammad Subeih Haider, who was laid off amid the spread of the coronavirus disease (COVID-19), by private British security firm operating in West Qurna 1 oilfield, developed by Exxon Mobil, stands as he protests with others in front of the Basra Oil Company in Basra, Iraq, May 20, 2020. Picture taken May 20, 2020. REUTERS/Mohammed Aty
Local worker Muhammad Subeih Haider, who was laid off amid the spread of the coronavirus disease (COVID-19), by private British security firm operating in West Qurna 1 oilfield, developed by Exxon Mobil, stands as he protests with others in front of the Basra Oil Company in Basra, Iraq, May 20, 2020. Picture taken May 20, 2020. REUTERS/Mohammed Aty
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In Iraq's Fields of Black Gold, Thousands Lose Livelihoods

Local worker Muhammad Subeih Haider, who was laid off amid the spread of the coronavirus disease (COVID-19), by private British security firm operating in West Qurna 1 oilfield, developed by Exxon Mobil, stands as he protests with others in front of the Basra Oil Company in Basra, Iraq, May 20, 2020. Picture taken May 20, 2020. REUTERS/Mohammed Aty
Local worker Muhammad Subeih Haider, who was laid off amid the spread of the coronavirus disease (COVID-19), by private British security firm operating in West Qurna 1 oilfield, developed by Exxon Mobil, stands as he protests with others in front of the Basra Oil Company in Basra, Iraq, May 20, 2020. Picture taken May 20, 2020. REUTERS/Mohammed Aty

Mohammed Haider, a security worker in Iraq's southern oilfields, thought he was safe after signing a new one-year contract to guard oil facilities. Three days later, he was out of a job.

"I got laid off. They threw us out on the pavement," the 38-year-old said, speaking as he protested outside the Basra Oil Company headquarters, the national partner for foreign companies.

Haider had been hired to drive vehicles for a British security firm around the giant West Qurna 1 oilfield that produces hundreds of thousands of barrels of crude each day - part of OPEC member Iraq's principal source of wealth.

He now spends his days at home or searching in vain online for jobs that are hard to come by in a crisis-hit economy.

"I can't even fall back on taxi-driving work. The curfew because of coronavirus means I'd get arrested for driving around illegally," he said later at his home.

Haider is one of thousands of workers in Iraq's oil sector who were laid off this year after a fall in oil prices caused by the COVID-19 pandemic, and who struggle to find any other source of income.

Iraq in March asked international oil companies to cut their budgets by 30% because of plummeting oil prices. Energy companies in the south responded by cutting costs.

Subcontractors, including security, construction and transport firms, let thousands of workers go, according to local authorities.

"Of about 80,000 Iraqis working in the oilfields, some 10,000 to 15,000 are now out of work," said Mohammed Ibadi, a local government official in Basra province, where most of the southern fields are located.

Iraqi workers had been forced to take unpaid leave or had been laid off completely, mostly by subcontractors, he said.

'I'D TAKE HALF MY WAGES'

Ibadi's office received dozens of complaints from workers who asked Iraqi authorities to sanction companies that do not comply with contractual termination terms. The local authorities negotiated 50% and 25% salaries for four months for some 2,000 workers who had been laid off, he said.

Khalid Hamza, associate director of the Basra Oil Company, said the government body would not accept the arbitrary termination of local staff.

"We particularly need to protect the jobs of the local population," he said.

Iraq has pledged to cut nearly a million barrels of oil production per day (bpd) in line with OPEC cuts. Its exports stood at 3.2 million bpd in May. The cuts have slashed state revenue, of which it makes up more than 90%.

The government faces making cuts to public sector pay - a move that would further anger impatient Iraqis who staged protests last year against alleged government corruption and lack of jobs.

Ibadi fears the economic and social crisis will worsen as the COVID-19 pandemic hits Iraq harder.

With most jobs in Basra linked to the energy industry, it is near impossible for workers like Haider to find an alternative source of income.

The father of three, who worked for five years as a driver for the British company, subcontracted by an American oil corporation, is ready to take on any job to provide for his family.

Haider fears he might no longer be able to cover school or medical costs.

"I wish the company would take me back, even for half my wages," He said.



China Approves $840B Plan to Refinance Local Government Debt, Boost Economy

Visitors walk past a shop under construction with a dragon mural at the Sanlitun shopping district in Beijing, Friday, Nov. 8, 2024. (AP Photo/Ng Han Guan)
Visitors walk past a shop under construction with a dragon mural at the Sanlitun shopping district in Beijing, Friday, Nov. 8, 2024. (AP Photo/Ng Han Guan)
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China Approves $840B Plan to Refinance Local Government Debt, Boost Economy

Visitors walk past a shop under construction with a dragon mural at the Sanlitun shopping district in Beijing, Friday, Nov. 8, 2024. (AP Photo/Ng Han Guan)
Visitors walk past a shop under construction with a dragon mural at the Sanlitun shopping district in Beijing, Friday, Nov. 8, 2024. (AP Photo/Ng Han Guan)

China on Friday approved a 6 trillion yuan ($839 billion) plan to help local governments refinance their mountains of debt, in the latest push to rev up growth in the world’s second largest economy.

The plan will be implemented over the next three years, Xu Hongcai, vice-chairman of the National People's Congress's financial and economic committee, said at a news conference Friday.

Finance minister Lan Fo'an estimated that the hidden debt of local governments was 14.3 trillion yuan ($2 trillion) at the end of 2023. Hidden debt refers to debt that has not been disclosed publicly, The Associated Press reported.

Lan said 2 trillion yuan would be allocated each year from 2024 to 2026 to help local governments resolve their debts. He estimated that the amount of hidden debt will drop to 2.3 trillion yuan ($320.9 billion) by the end of 2028.

Officials also said Friday that the ceiling to issue special bonds will be raised to 35.52 trillion yuan ($4.96 billion) from 29.52 trillion yuan ($4.12 billion) for local governments.

Lan said that the implementation of such a large-scale replacement measure indicates a “fundamental shift” in China's approach to debt restructuring and said that China’s government debt risk was “controllable.”

Analysts have called for bold, multi-trillion-yuan measures to reinvigorate the world's second largest economy, which has yet to bounce back fully from the COVID-19 pandemic.
Local government debts have ballooned partly due to high spending and low tax revenues during the pandemic, but also due to a downturn in the property industry, since sales of land use rights, a key source of local government revenue, have sagged.

The central bank loosened restrictions on borrowing in late September, sparking a stock market rally, but economists say the government needs to do more to ignite a sustained recovery. Government officials have indicated that could come at this week's meeting of the Standing Committee of the National People's Congress, which must give official approval to any new spending.

The economy has shown signs of life in the past two months. Purchase subsidies offered to people who trade in old cars or appliances for new ones helped auto sales rebound in September. A survey of manufacturers turned positive in October after five straight months of decline, and exports surged 12.7% last month, the largest increase in more than two years.

For most of the year, the ruling Communist Party appeared more focused on addressing long-term structural issues with the economy rather than short-term ones. Previous steps to boost the economy were piecemeal, seemingly aimed at keeping the economy afloat rather than sparking a robust recovery.

In recent weeks, the party has signaled a growing concern about the economy's sluggishness as it tries to meet its goal of achieving growth of around 5% this year. The central bank's monetary easing was followed by government pronouncements that it still has ample funds to pump into the economy.

Still, the longer-term goals of transforming China into a high-tech and green energy economy seem likely to remain the chief aims of the Communist Party, which doesn't face election pressures like the ones that toppled the Democrats and swept Donald Trump's Republicans to power in America this week.