Saturday Iraq News Posted by Tishwash at TNT 6-13-2026
TNT:
Tishwash: Government: World Bank delegation arrives in Baghdad next week to prepare program budget
Iraqi government spokesman Haider al-Aboudi revealed on Friday (June 12, 2026) that a delegation from the World Bank will arrive in Baghdad next week to complete the requirements for preparing the program budget, enabling Iraq to move towards adopting a budget capable of facing current and future economic challenges.
Al-Aboudi told Baghdad Today that “next week will witness the arrival of a delegation from the World Bank to complete the requirements for preparing a program budget through which Iraq can proceed with preparing a program budget that can meet the challenges,” indicating that “Prime Minister Ali Falih Al-Zaidi places the economic aspect among his top priorities.”
He added, "The World Bank delegation will work with the Ministry of Finance on economic reforms based on sound constitutional principles that address many sectors such as industry, agriculture, education, and others. Since the government took office after gaining the confidence of Parliament, the focus has been on empowering state institutions to improve their work."
He pointed out that "the government and the Prime Minister's vision is to support the Financial and Economic Council in order to work on building a financial and economic system to face current and future challenges."
Over the past years, the Iraqi economy has faced multiple challenges, most notably fluctuations in oil prices, the expansion of operational spending, and pressures to provide job opportunities and improve services, which has prompted government agencies to search for more effective financial and administrative tools to control economic performance. link
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Tishwash: 46% non-oil: An ambitious goal for restructuring Iraq's finances
The advisor to the Prime Minister for Financial and Economic Affairs, Mazhar Muhammad Saleh, affirmed that the government program represents an integrated strategic framework for achieving financial and economic diversification, and aims to reduce dependence on oil by enhancing non-oil revenues and expanding the productive base of the national economy.
Saleh added in a special statement to “ Al-Jarida ” that these trends fall within the “Iraq 2050” vision, which is based on reforming public finances and consolidating the principles of a social market economy, in order to achieve a balance between the developmental role of the state and the effectiveness of the market and the private sector, and to establish a long-term structural transformation in the Iraqi economy.
He explained that the vision requires an integrated reform and legislative framework that establishes the foundations of sustainability, efficiency and flexibility in fiscal policy, noting that one of its most prominent goals is to raise the contribution of non-oil revenues to the general budget to no less than 46% of total revenues by 2050, which will enhance financial sustainability and reduce the impact of fluctuations in global oil markets.
He pointed out that the government plan also aims to increase the private sector’s contribution to GDP compared to current levels, reflecting the Iraqi economy’s shift to a model that relies more on investment, individual initiative, job creation, and stimulating sustainable growth.
Saleh explained that achieving these goals will be through activating the national strategy for developing the private sector, and implementing institutional, legislative and regulatory reforms that contribute to improving the business environment, enhancing competitiveness and expanding the base of local and foreign investment.
He stressed that the Market Development Council will play a pivotal role in regulating market institutions according to the principles of governance, transparency and efficiency, creating an attractive investment environment, as well as supporting private sector-led projects in the manufacturing, agriculture, logistics and digital economy sectors.
He concluded by saying that this approach aims to build integration between reforming the financial sector and developing the productive sectors, which will contribute to reducing the rentier nature of the Iraqi economy and establishing a development model based on productivity, competitiveness and partnership between the state and the private sector, leading to building a diversified and sustainable economy that achieves prosperity by 2050. link
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Tishwash: Despite financial reform efforts, Iraqis still hold billions of dinars outside of banks.
Reforming the banking sector represents one of the most prominent economic challenges facing Iraq at the present stage, given the need to build a financial system capable of supporting development, stimulating investment, and enhancing trust between citizens and banking institutions.
Despite the expansion of loan and credit programs over the past years, challenges related to oversight, governance, transparency, and limited reliance on digital technologies continue to hinder the achievement of the desired goals.
Experts have confirmed that the success of any banking reform requires moving from traditional treatments to a modern system that relies on digitization, effective supervision, and the development of the legislative and credit infrastructure to ensure the sustainability of financing and reduce risks. Economic expert Ahmed Al-Tamimi believes that this success depends on adopting a comprehensive reform program that is not limited to administrative procedures, but extends to modernizing the legislative, supervisory, and technological infrastructure of both government and private banks.
Al-Tamimi told Baghdad Today on Friday (June 12, 2026) that “the crisis of advances and loans granted to citizens is not only related to the size of the available funding, but also to the mechanisms for granting loans, following up on them, and evaluating the creditworthiness of borrowers. Addressing this crisis requires the establishment of unified databases for borrowers and the development of a modern credit rating system that reduces cases of default and ensures that funding is directed to those who are eligible and able to repay.”
He explained that “achieving fairness in lending and controlling banking liquidity requires adopting clear and transparent standards in granting loans, away from interventions and mediations, with the need to expand the base of financial inclusion and increase reliance on official banking instruments instead of cash trading outside the banking system, which contributes to enhancing financial stability and raising the efficiency of liquidity management.”
He added that "weak financial oversight during the past years has contributed to the rise in default rates in some loans and advances, as a result of inadequate follow-up and auditing procedures and the absence of early warning systems for credit risks. Strengthening the role of regulatory bodies and activating governance and compliance within banks represent a fundamental pillar to reduce these problems."
He added that “the shift towards digital banking systems has become an urgent necessity, not an option, as digital technologies, electronic payment systems, electronic archiving, and digital loan application and follow-up platforms can reduce opportunities for corruption and bureaucratic red tape, speed up the completion of transactions, raise the level of transparency, as well as enable regulatory bodies to track financial operations more accurately and efficiently.”
Al-Tamimi stressed that “reforming the Iraqi banking sector is achievable if it is coupled with political will, professional management, and serious investment in technology and oversight, because building a modern and reliable banking sector is one of the most important conditions for revitalizing the economy, attracting investments, and achieving sustainable development in Iraq.”
For years, the Iraqi banking sector has suffered from accumulated challenges related to weak financial inclusion, widespread reliance on cash transactions, and limited digital banking services compared to global standards.
Banks also face challenges related to loan and advance management, borrower follow-up, and creditworthiness assessment, in addition to the need to update control, compliance, and governance systems.
In recent years, the government has moved towards adopting financial and banking reform programs aimed at expanding the use of electronic payment, promoting digitalization, and improving the investment environment, amid increasing calls from experts to link banking reforms with modern technology and effective supervision to ensure the building of a more efficient financial sector capable of supporting the national economy. link
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Tishwash: Cash versus digitalization: Will Iraq succeed in its financial transformation?
Economic experts believe that reforming the Iraqi banking sector and accelerating the shift towards electronic payments are two essential pillars for addressing many of the financial and economic challenges facing the country, from the loan and advance crisis to enhancing transparency, combating corruption, and stimulating investment.
Economic researcher Ahmed Al-Tamimi affirms that the success of any banking reform process requires a comprehensive program that is not limited to traditional administrative procedures, but extends to modernizing the legislative, regulatory and technological structure of government and private banks.
Al-Tamimi explained that the loan and credit crisis is not only related to the amount of money available for lending, but also to the mechanisms for granting financing, monitoring borrowers, and assessing their creditworthiness.
He pointed out that addressing this crisis requires the creation of unified databases for borrowers and the development of a modern credit rating system that contributes to reducing default rates and ensuring that financing reaches eligible borrowers who are able to repay.
Controlling liquidity and promoting financial inclusion
He added that achieving fairness in granting loans requires adopting clear and transparent standards, free from interference and mediation, while expanding the base of financial inclusion and increasing reliance on official banking instruments instead of cash transactions outside the banking system.
He explained that this transformation contributes to enhancing financial stability and improving liquidity management within the banking sector, as well as raising the efficiency of the financial performance of economic institutions.
He also pointed out that weak oversight in recent years has contributed to higher default rates on some loans due to inadequate auditing and follow-up procedures and the absence of early warning systems for credit risks.
He stressed that strengthening governance and activating control and compliance tools within banks are essential steps to reduce these problems and improve the quality of banking services.
Electronic payment is an economic necessity.
For his part, economic researcher Sadiq Al-Azraqi believes that the shift towards electronic payment is no longer just a technical option or a modern means of payment, but has become an economic and administrative necessity imposed by the nature of the modern economy and the requirements of transparency and financial stability.
He explained that the Iraqi economy still relies heavily on cash liquidity stored outside the banking system, which limits the state’s ability to monitor the movement of funds and manage economic activity efficiently.
He added that expanding the use of electronic payment tools would bring a large portion of circulating funds into the formal economic cycle, which would help regulate financial activity and reduce the risks of money laundering and tax evasion.
He pointed out that electronic systems also reduce the costs associated with cash management, including transportation, protection, manual inventory and counterfeiting risks, as well as making it easier for citizens to access various banking services such as loans, savings and investment.
Challenges of digital transformation
Despite the significant benefits expected, Al-Azraqi emphasizes that digital transformation still faces a number of challenges in Iraq, most notably the lack of confidence in the banking sector as a result of accumulated crises and past experiences, in addition to problems related to the stability of electricity and internet services.
He also noted that small and medium-sized business owners have concerns that electronic payment methods could become a means of pursuing them for tax purposes or imposing additional financial burdens on them.
He added that Iraqi society still tends to deal with direct criticism, which constitutes a cultural barrier that needs time and extensive awareness programs to overcome.
Combating corruption and promoting transparency
Al-Azraqi believes that one of the most important gains of digital transformation is the reduction of financial and administrative corruption, because electronic transactions leave a digital trace that can be tracked and reviewed, unlike cash transactions which are difficult to monitor.
He explained that the digital economy provides the state with a huge database that helps it understand consumption patterns, manage markets, predict supply crises, and monitor prices more accurately.
He added that the success of this transformation requires simultaneous administrative and legislative reforms, as well as providing incentives that encourage citizens and business owners to use electronic payment methods. link