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".



IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.


Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.


Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.