The Iraqi Ministry of Finance announced its inability to pay the salaries of more than 5 million permanent employees, after it had settled the dues of retirees and those covered by the social security network.
The reason announced by Finance Minister Ali Abdul Amir Allawi was the lack of financial liquidity due to the decrease in oil prices and the surge in the budget deficit. Consequently, he asked the parliament to adopt an internal borrowing law to finance the salaries for the remaining three months of the current year.
Millions of Iraqi employees have been waiting for their salaries for more than 20 days, while the Finance Ministry is linking the disbursement of the funds with the adoption of the internal borrowing law, which amounts to about 41 trillion Iraqi dinars (about USD 39 billion).
Iraqi political forces had different views over the matter. The opponents of Prime Minister Mustafa Al-Kadhimi blamed the current government for the crisis, while other blocs stressed that the former successive governments’ failures have led to the present situation.
The Iraqi Parliament’s Finance Committee announced, in a statement, that it has “information and data that shows that the amount of the borrowing presented by the government is exaggerated, compared to the disbursement of previous months.”
“The Financial Committee is keen to pass the borrowing law in a manner that guarantees disbursement of salaries of employees and retirees, the social security network and other expenses, in addition to the implementation of financial and economic reforms by the government,” the committee said.
In turn, the Ministry of Finance announced the reduction of the borrowing rate to 31 trillion Iraqi dinars, in response to the Finance Committee’s objection, according to a statement by the committee’s member, Ahmed Mazhar al-Jubouri, during a parliament session.