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.



Hezbollah’s ‘Statelet’ in Syria’s Qusayr Under Israeli Fire

Smoke billows from al-Qusayr in western Syria following an attack. (SANA)
Smoke billows from al-Qusayr in western Syria following an attack. (SANA)
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Hezbollah’s ‘Statelet’ in Syria’s Qusayr Under Israeli Fire

Smoke billows from al-Qusayr in western Syria following an attack. (SANA)
Smoke billows from al-Qusayr in western Syria following an attack. (SANA)

Israel has expanded its strikes against Hezbollah in Syria by targeting the al-Qusayr region in Homs.

Israel intensified its campaign against Hezbollah in Lebanon in September and has in the process struck legal and illegal borders between Lebanon and Syria that are used to smuggle weapons to the Iran-backed party. Now, it has expanded its operations to areas of Hezbollah influence inside Syria itself.

Qusayr is located around 20 kms from the Lebanese border. Israeli strikes have destroyed several bridges in the area, including one stretching over the Assi River that is a vital connection between Qusayr and several towns in Homs’ eastern and western countrysides.

Israel has also hit main and side roads and Syrian regime checkpoints in the area.

The Israeli army announced that the latest attacks targeted roads that connect the Syrian side of the border to Lebanon and that are used to smuggle weapons to Hezbollah.

Qusayr is strategic position for Hezbollah. The Iran-backed party joined the fight alongside the Syrian regime against opposition factions in the early years of the Syrian conflict, which began in 2011. Hezbollah confirmed its involvement in Syria in 2013.

Hezbollah waged its earliest battles in Syria against the “Free Syrian Army” in Qusayr. After two months of fighting, the party captured the region in mid-June 2013. By then, it was completely destroyed and its population fled to Lebanon.

A source from the Syrian opposition said Hezbollah has turned Qusayr and its countryside to its own “statelet”.

It is now the backbone of its military power and the party has the final say in the area even though regime forces are deployed there, it told Asharq Al-Awsat.

“Qusayr is critical for Hezbollah because of its close proximity to the Lebanese border,” it added.

Several of Qusayr’s residents have since returned to their homes. But the source clarified that only regime loyalists and people whom Hezbollah “approves” of have returned.

The region has become militarized by Hezbollah. It houses training centers for the party and Shiite militias loyal to Iran whose fighters are trained by Hezbollah, continued the source.

Since Israel intensified its attacks against Hezbollah in Lebanon, the party moved the majority of its fighters to Qusayr, where the party also stores large amounts of its weapons, it went on to say.

In 2016, Shiite Hezbollah staged a large military parade at the al-Dabaa airport in Qusayr that was seen as a message to the displaced residents, who are predominantly Sunni, that their return home will be impossible, stressed the source.

Even though the regime has deployed its forces in Qusayr, Hezbollah ultimately holds the greatest sway in the area.

Qusayr is therefore of paramount importance to Hezbollah, which will be in no way willing to cede control of.

Lebanese military expert Brig. Gen Saeed Al-Qazah told Asharq Al-Awsat that Qusayr is a “fundamental logistic position for Hezbollah.”

He explained that it is where the party builds its rockets and drones that are delivered from Iran. It is also where the party builds the launchpads for firing its Katyusha and grad rockets.

Qazah added that Qusayr is also significant for its proximity to Lebanon’s al-Hermel city and northeastern Bekaa region where Hezbollah enjoys popular support and where its arms deliveries pass through on their way to the South.

Qazah noted that Israel has not limited its strikes in Qusayr to bridges and main and side roads, but it has also hit trucks headed to Lebanon, stressing that Israel has its eyes focused deep inside Syria, not just the border.