Will Sudani Adopt the Previous Iraqi Government’s Economic Policies?

A handout picture released by Iraq's prime minister's office shows the new Prime Minister Mohamed Shia al-Sudani arriving for the official handover ceremony at the Republican Palace, the government's seat, in Baghdad's green zone. (Iraq's prime minister's office/ AFP)
A handout picture released by Iraq's prime minister's office shows the new Prime Minister Mohamed Shia al-Sudani arriving for the official handover ceremony at the Republican Palace, the government's seat, in Baghdad's green zone. (Iraq's prime minister's office/ AFP)
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Will Sudani Adopt the Previous Iraqi Government’s Economic Policies?

A handout picture released by Iraq's prime minister's office shows the new Prime Minister Mohamed Shia al-Sudani arriving for the official handover ceremony at the Republican Palace, the government's seat, in Baghdad's green zone. (Iraq's prime minister's office/ AFP)
A handout picture released by Iraq's prime minister's office shows the new Prime Minister Mohamed Shia al-Sudani arriving for the official handover ceremony at the Republican Palace, the government's seat, in Baghdad's green zone. (Iraq's prime minister's office/ AFP)

These days, we are seeing increasing speculation, especially among Iraqi elites and economists, about the extent to which the country’s new prime minister, Mohamed Shia al-Sudani, can reverse some of the critical economic decisions that the Coordination Framework had criticized Mustafa al-Kadhimi’s government of taking. Topping the list are the decision to devaluate the Iraqi dinar and a couple of other economic policies.

Dr. Nabil Al-Marsoumi, an academic and economist, said the program put forward by Sudani’s government did not mention reversing the decision to devaluate the currency by over a fifth - with 1,480 rather than 1,180 dinars becoming the equivalent of one US dollar.

The failure to reverse the decision of the former government demonstrates that its critics, most of whom are part of the pro-Iran Coordination Framework, had exploited the devaluation and its ramifications for the Iraqi people’s purchasing power as a pretext to undermine Kadhimi’s government.

“There was no amendment to the exchange rate in the government’s 2023 budget,” Marsoumi stressed. This affirms that Sudani’s government - and with it, the Coordination Framework deputies who dominate parliament - has backtracked on the exchange rate.

Marsoumi added that reversing the decision taken by Khadimi’s government and bringing the US dollar exchange rate back to 2020 levels would increase the government’s budget by 24 billion dollars.

He noted that over 50 MPs recently petitioned the government to reverse the decision. Sudani’s government, however, did not show any enthusiasm for this step, meaning that the decision taken by the former government had been correct despite the sharp criticism that had been levied at it at the time. Indeed, it is a decision several figures and platforms close to the Coordination Framework continue to criticize it.

Moreover, other economists have noted that the new government’s program did not mention the economic agreements that Kadhimi’s government had concluded with Arab countries.

Many within the Coordination Framework had criticized this decision and fiercely opposed it, especially those that are particularly close to Tehran.

Among them is the accord to sell Iraqi oil to Jordan at a discount and the economic agreements concluded with Egypt and Jordan, and the electric grid agreements with the Gulf states and Türkiye - more evidence that “Iraqi political forces usually pursue their private interests.”

While Sudani had called for reducing the salaries of high-ranking Iraqi officials, which he said would save the government 500 billion dinars (about 400 million dollars) a month, this seems unlikely. Indeed, many observers have said that they doubt Sudani will be able to do that since most ministers and senior officials are affiliated with the parties and groups in power. They are not simply going to roll over and surrender their privileges.

Experts believe that instead of a reduction in salaries, we could see Sudani make cuts to the privileges and financial incentives that come with such positions. In fact, they often cost the government multiples of the officials’ salaries. These incentives often take the form of funds allocated to the minister or official’s office, as well as a budget allocated for security.



What to Know about the Tensions between Iran and the US before Their Third Round of Talks

The flags of US and Iran are displayed in Muscat, Oman, 25 April 2025. Iran and US will hold third round of nuclear talks on 26 April 2025, in Muscat. (EPA)
The flags of US and Iran are displayed in Muscat, Oman, 25 April 2025. Iran and US will hold third round of nuclear talks on 26 April 2025, in Muscat. (EPA)
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What to Know about the Tensions between Iran and the US before Their Third Round of Talks

The flags of US and Iran are displayed in Muscat, Oman, 25 April 2025. Iran and US will hold third round of nuclear talks on 26 April 2025, in Muscat. (EPA)
The flags of US and Iran are displayed in Muscat, Oman, 25 April 2025. Iran and US will hold third round of nuclear talks on 26 April 2025, in Muscat. (EPA)

Iran and the United States will hold talks Saturday in Oman, their third round of negotiations over Tehran’s rapidly advancing nuclear program.

The talks follow a first round held in Muscat, Oman, where the two sides spoke face to face. They then met again in Rome last weekend before this scheduled meeting again in Muscat.

Trump has imposed new sanctions on Iran as part of his “maximum pressure” campaign targeting the country. He has repeatedly suggested military action against Iran remained a possibility, while emphasizing he still believed a new deal could be reached by writing a letter to Iran’s 85-year-old Supreme Leader Ali Khamenei to jumpstart these talks.

Khamenei has warned Iran would respond to any attack with an attack of its own.

Here’s what to know about the letter, Iran’s nuclear program and the tensions that have stalked relations between Tehran and Washington since the 1979 revolution.

Why did Trump write the letter? Trump dispatched the letter to Khamenei on March 5, then gave a television interview the next day in which he acknowledged sending it. He said: “I’ve written them a letter saying, ‘I hope you’re going to negotiate because if we have to go in militarily, it’s going to be a terrible thing.’”

Since returning to the White House, the president has been pushing for talks while ratcheting up sanctions and suggesting a military strike by Israel or the US could target Iranian nuclear sites.

A previous letter from Trump during his first term drew an angry retort from the supreme leader.

But Trump’s letters to North Korean leader Kim Jong Un in his first term led to face-to-face meetings, though no deals to limit Pyongyang’s atomic bombs and a missile program capable of reaching the continental US.

How did the first round go? Oman, a sultanate on the eastern edge of the Arabian Peninsula, hosted the first round of talks between Iranian Foreign Minister Abbas Araghchi and US Middle East envoy Steve Witkoff. The two men met face to face after indirect talks and immediately agreed to this second round in Rome.

Witkoff later made a television appearance in which he suggested 3.67% enrichment for Iran could be something the countries could agree on. But that’s exactly the terms set by the 2015 nuclear deal struck under US President Barack Obama, from which Trump unilaterally withdrew America.

Witkoff hours later issued a statement underlining something: “A deal with Iran will only be completed if it is a Trump deal.” Araghchi and Iranian officials have latched onto Witkoff’s comments in recent days as a sign that America was sending it mixed signals about the negotiations.

Yet the Rome talks ended up with the two sides agreeing to starting expert-level talks this Saturday. Analysts described that as a positive sign, though much likely remains to be agreed before reaching a tentative deal.

Why does Iran’s nuclear program worry the West? Iran has insisted for decades that its nuclear program is peaceful. However, its officials increasingly threaten to pursue a nuclear weapon. Iran now enriches uranium to near weapons-grade levels of 60%, the only country in the world without a nuclear weapons program to do so.

Under the original 2015 nuclear deal, Iran was allowed to enrich uranium up to 3.67% purity and to maintain a uranium stockpile of 300 kilograms (661 pounds). The last report by the International Atomic Energy Agency on Iran’s program put its stockpile at 8,294.4 kilograms (18,286 pounds) as it enriches a fraction of it to 60% purity.

US intelligence agencies assess that Iran has yet to begin a weapons program, but has “undertaken activities that better position it to produce a nuclear device, if it chooses to do so.”

Ali Larijani, an adviser to Iran’s supreme leader, has warned in a televised interview that his country has the capability to build nuclear weapons, but it is not pursuing it and has no problem with the International Atomic Energy Agency’s inspections. However, he said if the US or Israel were to attack Iran over the issue, the country would have no choice but to move toward nuclear weapon development.

“If you make a mistake regarding Iran’s nuclear issue, you will force Iran to take that path, because it must defend itself,” he said.

Why are relations so bad between Iran and the US? Iran was once one of the US’s top allies in the Middle East under Shah Mohammad Reza Pahlavi, who purchased American military weapons and allowed CIA technicians to run secret listening posts monitoring the neighboring Soviet Union. The CIA had fomented a 1953 coup that cemented the shah’s rule.

But in January 1979, the shah, fatally ill with cancer, fled Iran as mass demonstrations swelled against his rule. The revolution followed, led by Khomeini, and created Iran’s theocratic government.

Later that year, university students overran the US Embassy in Tehran, seeking the shah’s extradition and sparking the 444-day hostage crisis that saw diplomatic relations between Iran and the US severed. The Iran-Iraq war of the 1980s saw the US back Saddam Hussein. The “Tanker War” during that conflict saw the US launch a one-day assault that crippled Iran at sea, while the US later shot down an Iranian commercial airliner that the American military said it mistook for a warplane.

Iran and the US have see-sawed between enmity and grudging diplomacy in the years since, with relations peaking when Tehran made the 2015 nuclear deal with world powers. But Trump unilaterally withdrew America from the accord in 2018, sparking tensions in the Middle East that persist today.