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.



Fear Stalks Tehran as Israel Bombards, Shelters Fill Up and Communicating Grows Harder

Shops remain shuttered Tehran's historic Grand Bazaar, Monday, June 16, 2025. (AP)
Shops remain shuttered Tehran's historic Grand Bazaar, Monday, June 16, 2025. (AP)
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Fear Stalks Tehran as Israel Bombards, Shelters Fill Up and Communicating Grows Harder

Shops remain shuttered Tehran's historic Grand Bazaar, Monday, June 16, 2025. (AP)
Shops remain shuttered Tehran's historic Grand Bazaar, Monday, June 16, 2025. (AP)

The streets of Tehran are empty, businesses closed, communications patchy at best. With no bona fide bomb shelters open to the public, panicked masses spend restless nights on the floors of metro stations as strikes boom overhead.

This is Iran’s capital city, just under a week into a fierce Israeli blitz to destroy the country's nuclear program and its military capabilities. After knocking out much of Iran's air defense system, Israel says its warplanes have free rein over the city's skies. US President Donald Trump on Monday told Tehran's roughly 10 million residents to evacuate “immediately.”

Thousands have fled, spending hours in gridlock as they head toward the suburbs, the Caspian Sea, or even Armenia or Türkiye. But others — those elderly and infirm — are stuck in high-rise apartment buildings. Their relatives fret: what to do?

Israeli strikes on Iran have killed at least 585 people and wounded over 1,300, a human rights group says. State media, also a target of bombardment, have stopped reporting on the attacks, leaving Iranians in the dark. There are few visible signs of state authority: Police appear largely undercover, air raid sirens are unreliable, and there’s scant information on what to do in case of attack.

Shirin, 49, who lives in the southern part of Tehran, said every call or text to friends and family in recent days has felt like it could be the last.

“We don’t know if tomorrow we will be alive,” she said.

Many Iranians feel conflicted. Some support Israel's targeting of Iranian political and military officials they see as repressive. Others staunchly defend the country and retaliatory strikes on Israel. Then, there are those who oppose Iran’s rulers, but still don't want to see their country bombed.

To stay, or to go? The Associated Press interviewed five people in Iran and one Iranian American in the US over the phone. All spoke either on the condition of anonymity or only allowed their first names to be used, for fear of retribution from the state against them or their families.

Most of the calls ended abruptly and within minutes, cutting off conversations as people grew nervous or because the connection dropped. Iran’s government has acknowledged disrupting internet access. It says it's to protect the country, though that has blocked average Iranians from getting information from the outside world.

Iranians in the diaspora wait anxiously for news from relatives. One, an Iranian American human rights researcher in the US, said he last heard from relatives when some were trying to flee Tehran earlier in the week. He believes that lack of gas and traffic prevented them from leaving.

The most heartbreaking interaction, he said, was when his older cousins with whom he grew up in Iran told him “We don’t know where to go. If we die, we die.”

“Their sense was just despair,” he said.

Some families have made the decision to split up.

A 23-year-old Afghan refugee who has lived in Iran for four years said he stayed behind in Tehran but sent his wife and newborn son out of the city after a strike Monday hit a nearby pharmacy.

“It was a very bad shock for them,” he said.

Some, like Shirin, said fleeing was not an option. The apartment buildings in Tehran are towering and dense. Her father has Alzheimer’s and needs an ambulance to move. Her mother's severe arthritis would make even a short trip extremely painful.

Still, hoping escape might be possible, she spent the last several days trying to gather their medications. Her brother waited at a gas station until 3 a.m., only to be turned away when the fuel ran out. As of Monday, gas was being rationed to under 20 liters (5 gallons) per driver at stations across Iran after an Israeli strike set fire to the world's largest gas field.

Some people, like Arshia, said they are just tired.

“I don’t want to go in traffic for 40 hours, 30 hours, 20 hours, just to get to somewhere that might get bombed eventually,” he said.

The 22-year-old has been staying in the house with his parents since the initial Israeli strike. He said his once-lively neighborhood of Saadat Abad in northwestern Tehran is now a ghost town. Schools are closed. Very few people even step outside to walk their dogs. Most local stores have run out of drinking water and cooking oil. Others closed.

Still, Arshia said the prospect of finding a new place is too daunting.

“We don’t have the resources to leave at the moment,” he said.

Residents are on their own

No air raid sirens went off as Israeli strikes began pounding Tehran before dawn Friday. For many, it was an early sign civilians would have to go it alone.

During the Iran-Iraq war in the 1980s, Tehran was a low-slung city, many homes had basements to shelter in, and there were air raid drills and sirens. Now the capital is packed with close-built high-rise apartments without shelters.

“It's a kind of failing of the past that they didn’t build shelters,” said a 29-year-old Tehran resident who left the city Monday. “Even though we’ve been under the shadow of a war, as long as I can remember.”

Her friend's boyfriend was killed while going to the store.

“You don’t really expect your boyfriend or your anyone, really to leave the house and never return when they just went out for a routine normal shopping trip,” she said.

Those who choose to relocate do so without help from the government. The state has said it is opening mosques, schools and metro stations for use as shelters. Some are closed, others overcrowded.

Hundreds crammed into one Tehran metro station Friday night. Small family groups lay on the floor. One student, a refugee from another country, said she spent 12 hours in the station with her relatives.

“Everyone there was panicking because of the situation,” she said. “Everyone doesn’t know what will happen next, if there is war in the future and what they should do. People think nowhere is safe for them.”

Soon after leaving the station, she saw that Israel had warned a swath of Tehran to evacuate.

“For immigrant communities, this is so hard to live in this kind of situation,” she said, explaining she feels like she has nowhere to escape to, especially not her home country, which she asked not be identified.

Fear of Iran mingles with fear of Israel

For Shirin, the hostilities are bittersweet. Despite being against the theocracy and its treatment of women, the idea that Israel may determine the future does not sit well with her.

“As much as we want the end of this regime, we didn’t want it to come at the hands of a foreign government,” she said. “We would have preferred that if there were to be a change, it would be the result of a people’s movement in Iran.”

Meanwhile, the 29-year-old who left Tehran had an even more basic message for those outside Iran:

“I just want people to remember that whatever is happening here, it’s not routine business for us. People’s lives here — people’s livelihoods — feel as important to them as they feel to anyone in any other place. How would you feel if your city or your country was under bombardment by another country, and people were dying left and right?”

“We are kind of like, this can’t be happening. This can’t be my life.”