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.



West Bank Refugee Camp Gets Foretaste of UNRWA's Demise

UN workers clean up after the Israeli raid - AFP
UN workers clean up after the Israeli raid - AFP
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West Bank Refugee Camp Gets Foretaste of UNRWA's Demise

UN workers clean up after the Israeli raid - AFP
UN workers clean up after the Israeli raid - AFP

Residents of Nur Shams camp in the occupied West Bank are fearful for their future after an Israeli raid this week damaged the UN agency for Palestinian refugees office there.

The 13,000 inhabitants of the camp near the northern city of Tulkarem depend heavily on the United Nations Relief and Works Agency for Palestine Refugees.

UNRWA notably runs two schools, a clinic and sanitation services in Nur Shams.

Stunned refugees watched as workers cleared rubble from around the office, which was almost totally destroyed in an "anti-terrorist" operation on Thursday.

"For us, it's UNRWA or nothing," Shafiq Ahmad Jad, who runs a phone shop in the camp, told AFP.

"For the refugees... they look to UNRWA as their mother," said Hanadi Jabr Abu Taqa, an agency official in charge of the northern West Bank.

"So imagine if they lost their mother."

UNRWA chief Philippe Lazzarini blamed the destruction on Israeli forces, saying they had "severely damaged" the office.

But the military firmly denied the accusations, telling AFP that the damage was "likely" caused by explosives planted by "terrorists".

The office will have to be relocated, "a significant investment" according to Roland Friedrich, the agency's head in the West Bank.

"The psychological impact, of course, is devastating," he added after speaking to residents on Saturday.

- 'Attack on right of return' -

From his phone shop whose facade was torn off, Jad watched as excavators removed rubble and technicians repaired communications cabling.

He said he believed the chaos was linked to the Israeli parliament's adoption late last month of a law banning "UNRWA's activities on Israeli territory".

Were the agency to disappear even from the Palestinian territories like Tulkarem, he said the streets would fill with even more rubbish and sick people would go without care.

"To want to eliminate it is to want to eliminate the Palestinian question," Jad said.

Fellow camp resident Mohammed Said Amar, in his 70s, said Israel was attacking UNRWA "for political ends, to abolish the right of return".

He was referring to the principle that Palestinians who fled the land or were expelled when Israel was created in 1948 have the right to return, as do their descendants.

He insisted that Palestinian armed groups did not use the UNRWA premises, which locals consider "sacred".

If the army destroyed the building, as he believed, this meant it always wanted to target it.

Nihaya al-Jundi fumed that daily life was paralysed after every raid and that impassable roads left residents isolated.

Nur Shams needs international organizations like UNRWA to rebuild, said Jundi, whose center for the disabled was damaged and where the wheelchair ramp collapsed.

The camp, established in the early 1950s, was long a fairly quiet, tight-knit community.

But in recent years, armed movements have taken root there against a backdrop of violence between Palestinians and Israelis, economic insecurity and no political horizons.

- 'They worry' -

Two days after the Israeli operation, the internet was still not repaired and some main roads remained an obstacle course.

UNRWA's operations have resumed, however.

"The first thing we do is that we make sure that we announce that the schools are open," said the agency's Jabr Abu Taqa.

"We know how important it is for us to bring the children to what they consider a safe haven," she added.

As she strolled through the camp, many anxious residents approached her.

One young man pointed to a ransacked barber's shop and asked: "What did he do to deserve this, the barber? He no longer has work, money. What will he do?"

Mustafa Shibah, 70, worried about his grandchildren. He turned his radio's volume all the way up during the raids -- but the little ones were not fooled.

"My granddaughter wakes up (from the raids) and bursts into tears," he said.

"They worry, they have trouble getting to school because of the (damaged) road."

For him, the threats to UNRWA are just the latest example of the suffering of Nur Shams residents who feel abandoned by Palestinians elsewhere.

"Why is it only us that have to pay while they dance in Ramallah and have a good life in Hebron?" he asked.

He said Israel "feels they can do anything" with no one to stop them.