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.



Desperate for Cash, Gazans Sell Clothes Plucked from Rubble

Desperate for Cash, Gazans Sell Clothes Plucked from Rubble
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Desperate for Cash, Gazans Sell Clothes Plucked from Rubble

Desperate for Cash, Gazans Sell Clothes Plucked from Rubble

Moein Abu Odeh clambered up a pile of rubble in southern Gaza, searching for clothes, shoes, anything he could sell to raise cash more than a year since Israel started its relentless bombardments.

The father-of-four delved under blocks and brushed away piles of concrete dust at the site of one airstrike in the wrecked city of Khan Younis. His plan was to sell what he found to buy flour.

"If food and drink were available, believe me, I would give (these clothes) to charity," he said. "But the struggles we are going through (mean we) have to sell our clothes to eat and drink."

Widespread shortages and months of grinding war have generated a trade in old clothing, much of it salvaged from the homes of people who have died in the conflict.

At one makeshift market, shoes, shirts, sweaters and sneakers were laid out on dusty blankets, Reuters reported.

A girl tried on a single worn-out boot, which could come in handy this winter if she can afford it in Gaza's ruined economy.

A trader got an edge on his competitors by shouting out that his wares were European.

One man laughed as he got a young boy to try on a green jacket.

"We get clothing from a man whose house was destroyed. He was digging in the concrete to get some (clothing) and we buy them like this and sell them at a good price," displaced Palestinian Louay Abdel-Rahman said.

He and his family arrived in the city from another part of Gaza with only the clothes they were wearing. So he also keeps some back for them. "The seasons have changed from summer to winter and we need clothing," he said.

In April, the UN estimated it would take 14 years to dispose of the wreckage in Gaza. The UN official overseeing the problem said the clean-up would cost at least $1.2 billion.

More than 128,000 buildings have been destroyed or severely or moderately damaged in Gaza as a result of the conflict, the UN says. Underneath all of that are seams of mangled clothes.

"All our children only have short-sleeve clothing and nobody is helping them," Saeed Doula, a father-of-seven, said. "The war is all-encompassing."