Iraq’s Debt Exceeds $160Bn

Displaced Iraqis collect their belongings at Hammam Al-Alil camp, south of Mosul, Iraq | Photo: REUTERS
Displaced Iraqis collect their belongings at Hammam Al-Alil camp, south of Mosul, Iraq | Photo: REUTERS
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Iraq’s Debt Exceeds $160Bn

Displaced Iraqis collect their belongings at Hammam Al-Alil camp, south of Mosul, Iraq | Photo: REUTERS
Displaced Iraqis collect their belongings at Hammam Al-Alil camp, south of Mosul, Iraq | Photo: REUTERS

Iraq’s debt has exceeded $160 billion after the fiscal deficit law was approved, while the foreign public debt alone ranges between $60-70 billion.

MP Abdul Hadi al-Saadawi, member of the Iraqi parliament’s finance committee, said on Sunday that the majority of the country’s debt is external.

According to previous statements in early November, Finance Minister Ali Abdul Amir Allawi said Iraq’s foreign debt is estimated between $60 and $70 billion, while the internal debt amounts to $100 billion.

This comes amid parliamentary warnings from the government’s borrowing policy, which would eventually lead to bankruptcy.

Allawi explained that half of this amount was inherited and the other was added after 2003 for various purposes, including project financing.

The financial crisis suffered by Iraq is the result of the decline in oil prices and the consequent reduction in production, which affected its revenues, Allawi noted, adding that the reduction in oil exports has also caused an increase in the dues of oil contracts and licenses companies.

This has prompted the Finance Ministry to request the Iraqi parliament to issue an internal borrowing law with a 41 trillion dinars ceiling to reduce the deficit in salaries and expenses, such as the import of electricity and fuel, foreign debt, and others.

Allawi affirmed the new loan will cover salaries and expenses for the remainder of 2020 and the first two months of 2021.

He said the current government faced this crisis without any financial liquidity. For this reason, it can only rely on internal borrowing for the short term.

He further noted that the foreign borrowings, which amounted to $5 billion shall be allocated to finance projects.

Allawi warned that the monthly revenues generated from exporting oil, along with the funds in his ministry, are not sufficient to cover the salaries of all employees.

The Finance Ministry has repeatedly warned that the government’s current revenues are insufficient to meet current expenditures in light of low oil prices and Iraq’s commitment to the decisions taken by the Organization of Petroleum Exporting Countries (OPEC) and its allies on reducing oil production.



Egypt Govt Pledges Wage Hikes, Relief for Citizens

 A woman prepares traditional Egyptian butter cookies known as "Kahk", to celebrate Eid al-Fitr, which marks the end of the holy month of Ramadan in Cairo, Egypt, March 23, 2025. (Reuters)
A woman prepares traditional Egyptian butter cookies known as "Kahk", to celebrate Eid al-Fitr, which marks the end of the holy month of Ramadan in Cairo, Egypt, March 23, 2025. (Reuters)
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Egypt Govt Pledges Wage Hikes, Relief for Citizens

 A woman prepares traditional Egyptian butter cookies known as "Kahk", to celebrate Eid al-Fitr, which marks the end of the holy month of Ramadan in Cairo, Egypt, March 23, 2025. (Reuters)
A woman prepares traditional Egyptian butter cookies known as "Kahk", to celebrate Eid al-Fitr, which marks the end of the holy month of Ramadan in Cairo, Egypt, March 23, 2025. (Reuters)

The Egyptian government has pledged to improve wages and ease the financial burden on citizens by raising the minimum wage to 7,000 Egyptian pounds (1 USD = 50.45 EGP in banks) starting from the new fiscal year in July 2025.

In its proposed budget for the 2025-2026 fiscal year, the government allocated an 18.1% increase in wage provisions, totaling 671 billion pounds to fund the new salary increases.

This includes a 10% increase in the periodic allowance for civil service law employees and a 15% increase for non-civil service employees, with a minimum increase of 150 pounds per month, according to Finance Minister Ahmed Kouchouk's statement on Monday.

The government measures also include raising the “cost of living allowance” from 600 to 1,000 pounds and increasing the additional incentive by 300 pounds across all job grades.

This will result in a minimum monthly salary increase of 1,100 pounds for the lowest job grade, boosting overall wages.

While welcoming the increase in the minimum wage, Samira Al-Jazzar, a member of the parliamentary plan and budget committee, called on the government to take further steps to ensure citizens benefit from the wage hikes.

She stressed the need to regulate markets and implement strict measures against price manipulators.

Al-Jazzar expressed concerns about potential price hikes, which could lead to a rise in inflation again.

She told Asharq Al-Awsat that the government should have pursued multiple strategies to address this issue.

The lawmaker also emphasized the importance of expanding production, which she believes would gradually reduce prices.

Economic expert Karim Al-Omda told Asharq Al-Awsat that the new wage increases are a preemptive move by the government to mitigate public anger over expected rises in fuel and service prices.

The government plans to raise fuel prices three times by the end of this year as part of a fuel subsidy reduction strategy under the economic reform program agreed with the International Monetary Fund, which secured a $12 billion loan, according to statements from Prime Minister Mostafa Madbouly.

Al-Omda urged the government to accelerate improvements in the education and healthcare sectors to genuinely enhance citizens' lives.

He highlighted the urgency of speeding up the implementation of the "comprehensive health insurance" system and making substantial reforms to the education system.

The Ministry of Finance has pledged to allocate the necessary funds to hire over 75,000 teachers, 30,000 doctors, and 10,000 other personnel in various government sectors in the upcoming fiscal year.