Iraq Economic News and Points To Ponder Wednesday Evening 5-13-26
Exclusive: US warning: Iraq has only five months' worth of "financial buffers" to avoid "the mother of all crises".
2026-05-13 Shafaq News – Washington Mustafa Hashim On Wednesday, economist Ziad Dawood painted a "bleak" picture of the future of the Iraqi economy in light of the sharp fluctuations in global oil prices, warning that the country could find itself facing "bitter choices" within a few months if the growing financial gap is not addressed.
In remarks made during economic discussions at the Iraq Dialogue Day at the Atlantic Council in Washington, which was attended by a correspondent from Shafaq News Agency, Dawood explained that Iraq is currently experiencing a state of "excessive dependence" on oil revenues, which makes its budget more vulnerable to external shocks than it was in the crises of 2008, 2014 and 2020.
Salaries And Currency Value
Dawood defined the concept of "economic crisis" in Iraq with two main axes that represent the existential obligations of the state:
1. Currency stability: Maintaining the dinar's peg to the dollar at its current levels.
2. Salaries and obligations: The ability to pay employee salaries, wages, and pensions without delay.
Daoud warned that failing to meet either of these commitments would mean entering "the mother of all crises," stressing that the process of "currency revaluation" (devaluing the currency) is a painful process economically and socially.
Narrow Safety Margin
The economist presented a detailed calculation to estimate the length of time Iraq could withstand the decline in oil revenues:
Reserves: the central bank of iraq has approximately $100 billion.
Currency Cover: To ensure the stability of the dinar and maintain the circulating money supply, the central bank needs to allocate about $75 billion as cover.
Available Surplus: Iraq practically has only $25 billion left that can be used to cover the deficit.
Payroll: The annual cost of salaries and pensions is approximately $64 billion, which is equivalent to about $5.3 billion per month.
The result: According to Dawood, the available surplus ($25 billion) is only enough to cover salaries for five months in the event of a sharp interruption or decline in oil revenues, before the country reaches "the brink of collapse".
Post-World Cup Predictions
Dawood indicated that Iraq may experience a period of relative stability until next July, coinciding with the celebrations for the 2026 World Cup, but he expressed deep concern about the price levels and economic pressures that will follow this period.
He concluded his statement by emphasizing that Iraq faces "difficult choices," as dependence on oil has increased rather than decreased, making any disruption in global markets a direct threat to the social and economic stability of Iraqis.
Ahmed Al-Basheer ridicules Iraq’s political system as Al-Zaidi nomination fuels criticism
2026-05-13 / 15:49 Shafaq News- Washington Iraqi political satirist Ahmed Al-Basheer on Wednesday delivered a public critique of Iraq’s post-2003 political order, mocking the opaque rise of businessman Ali Al-Zaidi toward the premiership and arguing that elections in Iraq have become little more than a ceremonial exercise overshadowed by elite bargaining and foreign influence.
Speaking during a session hosted by the Atlantic Council, Al-Basheer said Iraqis were introduced to Al-Zaidi’s candidacy with almost no public understanding of who he was politically. “We woke up one morning to headlines saying Ali Al-Zaidi would become the next prime minister,” he said. “Honestly, I had never heard of him as a politician. I only knew him as a businessman whose food products I personally buy abroad.”
The comedian then turned the discussion into a broader indictment of Iraq’s political culture. “We know nothing about this man,” he continued. “Is he Islamist? Liberal? Atheist? Nobody knows because he has never even given an interview. We are dealing with a ghost prime minister. We do not even know what his voice sounds like. The voice we eventually hear could literally be AI.”
Read more: Who is Ali Al-Zaidi? The businessman tapped for Iraq's premiership
Drawing laughter from the audience, Al-Basheer mocked the media image circulated of Al-Zaidi, saying he had expected “the traditional Iraqi political figure with a thick moustache and an old-fashioned suit,” only to find someone who “looks more like your friend from a café smoking shisha than the man expected to run a country drowning in crises.”
But the sharpest part of Al-Basheer’s remarks targeted the political system itself rather than Al-Zaidi personally. He argued that Iraqi elections have steadily lost meaning because real power lies in closed-door negotiations among party leaders and regional actors.
“Since 2005, Iraqis vote in one direction and America or Iran pushes things in another,” he said. “We exhaust ourselves with purple ink [elections] while nine political leaders sit in a room deciding who comes next. Why continue this game at all?”
Al-Basheer described parliament as a “gold mine” for comedy, portraying lawmakers as figures driven less by policy conviction than by instructions from party leadership.
“Our MPs suddenly become guardians of morality when a woman wearing a short skirt appears on television,” he said sarcastically. “But on oil, corruption, and stolen money, they turn into puppets waiting for WhatsApp instructions.”
The Iraqi presenter also painted a bleak picture of media freedom inside the country, arguing that most television channels operate as extensions of political factions rather than independent institutions. “Yes, Iraq has hundreds of channels,” he said. “But they function exactly like our democracy. Every outlet attacks the rival side only until political deals are reached. Once agreements happen, the ‘freedom of expression’ disappears overnight.”
He added that his ability to criticize political figures openly was tied largely to the fact that he lives outside Iraq.
Still, Al-Basheer surprised some attendees by saying that the era of former Prime Minister Nouri al-Maliki witnessed broader tolerance toward media criticism than later periods. “I criticized al-Maliki relentlessly and he never pursued me legally,” he said.
Despite his criticism, Al-Basheer ended on a more hopeful note, saying meaningful change in Iraq would ultimately come from society itself rather than from outside intervention.
He also recalled receiving a phone call from former Prime Minister Haider Al-Abadi after Al-Abadi left office, during which Al-Abadi thanked him for exposing “the snakes” surrounding his administration, despite years of criticism directed at him on the show.
“I once believed one sentence could change the country overnight,” he said. “Now I believe change takes time. Iraqis will eventually reclaim their country from corruption and militias, just as the October protest movement surprised all of us. No Iron Man is coming to save Iraq —Iraqis will have to do it themselves.”
A Kurdistan Democratic Party MP Told Rudaw: Oil And Gas Law Talks Between Baghdad And Erbil Have Reached The Point Of Agreement
Keywords: Oil and Gas Law Rudaw Digital Iraq's economy is almost 90% dependent on oil production, yet remarkably, there is still no specific law governing oil and gas. Most political parties believe that the absence of such a law has been a source of tension between Erbil and Baghdad. Enacting such a law would be key to resolving many of the issues between the two sides.
Hakim Farouk, a member of parliament from the Kurdistan Democratic Party bloc, told Rudaw Media Network that the oil and gas law has been discussed and "extensive talks have taken place, reaching the point of agreement."
For nearly two decades, the oil and gas bill in parliament has not been passed; the Kurdistan Democratic Party’s condition for participating in the new Iraqi government was the passage of this law.
Hakim Farouk, a member of parliament from the Kurdistan Democratic Party bloc, told Rudaw Media Network: “During both Ali al-Zaidi and Nechirvan Barzani’s visits to Baghdad, the oil and gas law was discussed, as well as the need to pass it as soon as possible and in the next legislative session. Many talks were held on the matter, which reached the point of agreement.”
Hakim Farouk - Member of Parliament for the Kurdistan Democratic Party bloc
In 2007 and 2011, two different drafts of the Iraqi Oil and Gas Law were prepared, but they were not passed due to disagreements between Baghdad and Erbil, and now attempts are continuing once again to amend them.
Shaker Mahmoud Abu Turab, a member of parliament from the Fatah Alliance, told Rudaw Media Network that "there are many problems that need to be amended, and this will become apparent when they are presented and discussed. They are currently in the drawers of the House of Representatives.
We - the Badr Bloc - have two important laws as our priorities: the Popular Mobilization Forces Law and the Oil and Gas Law. There are other laws, but these two are the most important."
Shaker Mahmoud Abu Turab - Member of Parliament for the Fatah Alliance
The draft currently in the Iraqi parliament is the 2011 draft law consisting of 49 articles; according to the principles of this draft, the “Federal Council for Oil and Gas” must be formed, which is responsible for determining oil policy in Iraq, and the Kurdistan Region will have a representative in it at the level of a minister. https://www.rudawarabia.net/arabic/middleeast/iraq/110520262
Al-Zaydi And The Dollar: Expectations Of A Breakthrough In The Exchange Market
2026-05-13 02:43 Shafaq News – Sulaymaniyah An economic expert predicted on Wednesday that the formation of the new Iraqi government would contribute to lowering the dollar exchange rate against the dinar in local markets, noting that there was an expected “American support” that would positively affect the financial market.
Sulaymaniyah currency market spokesman Jabbar Goran told Shafaq News Agency that the resumption of government projects after the formation of the government will lead to an increase in spending in Iraqi dinars and a full return of the ministries’ activity, which will boost demand for the local currency and support the stability of the exchange rate.
He added that the United States renewed its support for the formation of the government of Prime Minister-designate Ali al-Zaidi, considering that this support gives a "positive signal" to the financial markets, provided that no new tensions or wars occur in the region.
He explained that there was confusion surrounding the news regarding the "stopping of dollar transfers" from the United States to Iraq, indicating that Baghdad had requested the transfer of part of the surplus oil revenues deposited in JPMorgan Chase Bank and subject to the supervision of the US Treasury Department.
He pointed out that Iraq does not need all of its oil revenues immediately, so part of them is kept in the United States, noting that Washington informed Baghdad that it would postpone the transfer of additional funds until after the formation of the new government.
Goran predicted that the exchange rate of 100 dollars would fall to less than 150,000 dinars in the coming period, if regional conditions stabilize and there is no security or military escalation.
He stressed that the natural difference between the official price of 132,000 dinars per 100 dollars and the market price should remain within the limits of 12,000 to 13,000 dinars only. https://www.shafaq.com/ar/اقتصـاد/الزيدي-والدولار-توقعات-بانفراجة-مرتقبة-في-سوق-الصرف