Despite Oil Wealth, Poverty Fuels Despair in South Iraq

From patchy supplies of water and electricity, to pockmarked roads and toxic pollution, Basra residents are struggling -- a job in the petroleum sector is the ultimate prize - AFP
From patchy supplies of water and electricity, to pockmarked roads and toxic pollution, Basra residents are struggling -- a job in the petroleum sector is the ultimate prize - AFP
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Despite Oil Wealth, Poverty Fuels Despair in South Iraq

From patchy supplies of water and electricity, to pockmarked roads and toxic pollution, Basra residents are struggling -- a job in the petroleum sector is the ultimate prize - AFP
From patchy supplies of water and electricity, to pockmarked roads and toxic pollution, Basra residents are struggling -- a job in the petroleum sector is the ultimate prize - AFP

In Iraq's southern province of Basra, the oil flows freely but little of the wealth trickles down to the people, and many struggle to make ends meet.

Sajad, 17, who lives in Basra city, says he "has no future" and no present. Like other young people, he says he just survives, a living emblem of the city's maladies.

Basra province produces about 70 percent of crude oil in Iraq, itself the second biggest exporter in the Middle East after Saudi Arabia.

Yet the province is hit especially hard by many of the problems plaguing Iraq, which is still seeking to recover from years of war and turmoil since the 2003 US-led invasion that toppled dictator Saddam Hussein.

Unemployment in Basra affects 20 to 25 percent of the people and almost 30 percent of youth, estimated Iraqi economist Barik Schuber in the absence of official figures.

This compares to a national rate of 13.7 percent, according to World Bank figures, AFP reported.

From patchy supplies of water and electricity, to pockmarked roads and toxic pollution caused by extracting hydrocarbons, Basra province and its four million inhabitants are struggling.

But what hits hardest is the despair of the young.

Gathered around their shisha pipes, Sajad and Jawad, both aged 16, are hard pressed to find anything to be optimistic about.

Sajad does not work, while Jawad said he toils for "eight to 13 hours in a restaurant for 7,000 dinars (about $4.80) per day".

"I don't see a future here, I want to go to Baghdad," said Sajad, sitting on the shores of the Shatt al-Arab waterway, where the Tigris and Euphrates rivers meet.

Some investments have been made, such as a new stadium under construction ahead of the Gulf Cup football tournament due to be held in Basra in January 2023.

But the deputy governor of Basra, Dorgham al-Ajwadi, conceded that "the people are angry".

He blamed the distant government in Baghdad for the inequitable distribution of the federal budget.

"In 2021, the Iraqi budget is about 130 trillion Iraqi dinars ($89 billion), but for Basra it's less than one trillion," he told AFP.

"It is maybe 0.7 percent of the total budget, while more than 108 trillion come from Basra."

For Basra resident Mortada, 27, it's not Baghdad that's to blame but rather the local authorities.

Before the pandemic, he ran an unregistered ice cream shop, he explained.

"Then the authorities shut down the illegal businesses, including mine," he said, requesting that his surname not be published to avoid problems "with certain people".

In Iraq's October 10 parliamentary elections, he voted for an independent candidate unaffiliated with the major parties because "I believe he can change things".

For many, the grievances run deeper.

Basra was a hotbed of massive protests in mid-2018, a precursor to the near-nationwide protests that rocked the country from October 2019.

Anger erupted in Basra over corruption, poor public services and, above all, the influence of neighboring Iran, whose local consulate was set ablaze.

Tehran has long exercised influence over Iraq through certain political parties, as well as factions of the Hashed al-Shaabi -- a former paramilitary umbrella organization that was folded into the Iraqi armed forces.

In Basra, some accuse "groups loyal to Tehran" of wielding harmful influence and of infiltrating the economic fabric.

One such critic refused to give his name, saying that "if it is published, I risk being killed".

Three years after the Basra demonstrations, little has changed, according to Mortada, who does odd jobs and dreams of working "for the state".

In Basra, more than in any other part of the country, a job in the petroleum sector is seen as the ultimate prize for its promise of stability and prosperity.

But according to Mac Skeleton, executive director of the Institute of Regional and International Studies based in Iraqi Kurdistan, jobs in Basra's petrol industry are handed out through nepotism.

"Each of the major Shiite majority parties are competing over the Basra oil company, they're competing over the security contracts in the oil fields, for different assets," he explained.

But "connections" are necessary for a way in, he said, adding that "at the end of the day there is a kind of limit to how many people can benefit from these different spheres of power".

Some people miss out despite having connections, said Sajad, whose uncle works at the oil ministry.

The young man complained that his elder relative had already "accommodated two people from his family" and therefore "cannot hire me".



Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)

Saudi Arabia’s non-oil exports soared to a two-year high in May, reaching SAR 28.89 billion (USD 7.70 billion), marking an 8.2% year-on-year increase compared to May 2023.

On a monthly basis, non-oil exports surged by 26.93% from April.

This growth contributed to Saudi Arabia’s trade surplus, which recorded a year-on-year increase of 12.8%, reaching SAR 34.5 billion (USD 9.1 billion) in May, following 18 months of decline.

The enhancement of the non-oil private sector remains a key focus for Saudi Arabia as it continues its efforts to diversify its economy and reduce reliance on oil revenues.

In 2023, non-oil activities in Saudi Arabia contributed 50% to the country’s real GDP, the highest level ever recorded, according to the Ministry of Economy and Planning’s analysis of data from the General Authority for Statistics.

Saudi Finance Minister Mohammed Al-Jadaan emphasized at the “Future Investment Initiative” in October that the Kingdom is now prioritizing the development of the non-oil sector over GDP figures, in line with its Vision 2030 economic diversification plan.

A report by Moody’s highlighted Saudi Arabia’s extensive efforts to transform its economic structure, reduce dependency on oil, and boost non-oil sectors such as industry, tourism, and real estate.

The Saudi General Authority for Statistics’ monthly report on international trade noted a 5.8% growth in merchandise exports in May compared to the same period last year, driven by a 4.9% increase in oil exports, which totaled SAR 75.9 billion in May 2024.

The change reflects movements in global oil prices, while production levels remained steady at under 9 million barrels per day since the OPEC+ alliance began a voluntary reduction in crude supply to maintain prices. Production is set to gradually increase starting in early October.

On a monthly basis, merchandise exports rose by 3.3% from April to May, supported by a 26.9% increase in non-oil exports. This rise was bolstered by a surge in re-exports, which reached SAR 10.2 billion, the highest level for this category since 2017.

The share of oil exports in total exports declined to 72.4% in May from 73% in the same month last year.

Moreover, the value of re-exported goods increased by 33.9% during the same period.