Iraq Economic News and Points To Ponder Late Friday Evening 6-5-26
The Real Problem Versus The Fake Problem!
Published on: June 5, 2026: 03:59 PM There are socialists in Iraq, but there is no socialism, nor has there ever been. Socialism in Iraq is a word, a slogan, an old political myth, like freedom, transparency, fighting corruption, and social justice. What is absent and missing in this country becomes present only when the authorities so desire.
I believe that mentioning socialism as a mindset and a problem lacks any real, philosophical, or intellectual justification, just as there are no demands of a socialist nature. It's no secret that Iraqi socialists themselves don't have a socialist program; they've lowered their expectations within our chaotic system, whose identity remains unclear.
No demonstrations have raised socialist slogans or demanded a socialist system; rather, demonstrations have taken place against rampant corruption—specifically, against the corruption that has turned the state into a cash cow.
This is the real problem that needs to be addressed and confronted with courageous will.
Anything else is simply an attempt to evade a real problem by creating a false one.
So what happened to make the Iraqi Prime Minister call for moving beyond the “socialist mentality” in managing the economy?
Is there truly a socialist mindset managing the economy? I believe Iraq lacks even a sound mind to manage its economy. Since 2003, the political administration has failed to utilize available and readily available professional expertise. Throughout these years, the disregard for professional competence has become the norm.
The political system has not invested in talent but rather in entrenched political factions, most of which lack merit and are solely concerned with their own narrow interests.
The prevailing rentier economy has been exposed since 2003 due to the cessation of any productive, cumulative activity in various economic sectors, with the exception of oil.
However, even oil revenues have been squandered by corruption and haphazard projects. Our economy is not managed by experts but by politicians who think only of their own pockets, served by commercial economic offices and banks run by currency traders, along with a group of accountants to distribute salaries and bonuses.
Ironically, some of those who amassed wealth from the rentier state that controlled the Iraqi economy equated the public sector with socialism.
Among them were those who sought to circumvent the legal frameworks of state and public ownership, facilitating matters for corrupt individuals and the newly rich who profited from fraudulent and failed contracts and projects, and from plundering the state with impunity. I believe the intention behind expanding this analogy, which conflates and politicizes terminology, is to dismantle what remains of the public sector and offer it up to investors complicit with politicians.
The aim is for the market to prevail. But even a market needs an economic and ethical mind to monitor, hold accountable, and regulate, not one that permits looting, bribery, and forged credentials.
And here we are again, arriving at the real crux of the matter: corruption, the traditions of corruption, the lack of oversight, and political collusion with the corrupt—not a socialist mindset!
No one before Mr. Ali al-Zaidi, in all the presidencies, ever uttered the word "socialism." It has no meaning in the Iraq of 2003, occupied by the Americans, not only because the Americans oppose socialism, but also because they dismantled the state—a state that monitors, records, and punishes—and opened the doors of an Iraq that produces nothing but oil.
It has become a garage for cars, restaurants, malls, and banquets for politicians who have divided the spoils of the state amongst themselves. The prevailing economy in Iraq is one of garages, restaurants, buildings, malls, exorbitant salaries, entertainment, and the importation of everything, even electricity and gas.
So where did the idea of abandoning the socialist mentality come from, in circumstances where no mentality governs Iraqi life other than that of corruption and the exploitation of a rentier state that produces nothing but oil and sells it?
Most of the post-2003 wealthy acquired their riches and privileges from the rentier state and its spoils after the American occupation.
Many of them now criticize and attack the state instead of developing a program to rebuild it on productive democratic foundations, diversify its productive sectors in industry, agriculture, and tourism, regulate oversight and taxation, and improve people's living conditions.
Now, there is a growing awareness of a socialist mindset. What is this mindset doing? Is it hindering investment, or is it corruption that is destroying all investor confidence?
Are there socialist laws in place? Profit-driven investment has even infiltrated education and healthcare, leaving public education and healthcare in a state of collapse.
Most of the revenue from this impoverished state is plundered by the forces that constitute the political system. And here we are, returning to the same wound that requires urgent treatment, instead of offering misguided, pseudo-cultural ideas.
Before becoming a political force, Islamists were proponents of intellectual interpretations that countered socialism with an Islamic socialism, and capitalism with an Islamic concept of justice that respected private property but opposed usury. During the presidency of the Islamist Morsi, Egypt requested a loan from Germany.
Because the Islamists were new to the intricacies of governance, requiring a balance between principles and reality—between permissible and usurious funds—they emphasized, to an excessive degree, that the interest rate on this loan was minimal, not exceeding 3 or 4 percent—a reasonable interest acceptable to both reason and religion.
In reality, the loan was approved based on an Islamic legal principle invoked during crises: necessity permits what is forbidden!
After seizing power, they sought to control the public sphere. In collaboration with Salafist groups, they began searching for demons in cinemas, nightclubs, the streets, among oud and violin makers, and among ancient ruins, museums, and the fabric of civil society. (I'm not saying this to be funny; it's true and was a rehearsal for what they call "enjoining good and forbidding evil" campaigns!)
The slogans and phrases will change; they no longer speak of Islamic socialism, though they continue to equate democracy with the consultative system (Shura) as if they were identical, in an attempt to convince the West. They have come to realize that Gamal Abdel Nasser's old socialism was sold out during Sadat's era, and that the Egyptian regime is secular!
Every Islamist term that finds its way into the political sphere is driven by a hidden agenda or is a reaction to a different reality that they are trying to control through manipulation. Political Islam is the biggest producer of empty rhetoric.
And despite all the evils of the system falsely labeled socialist, the poor only lost the basic necessities for a decent and lawful life after the fat cats seized control of the economy during the reign of the pious president.
What is meant by the socialist mentality other than the remnants of the plundered public sector, demanding its privatization instead of its reform, while simultaneously replacing ideas of social justice with the terms of market and investment?
Is this a psychological condition exhibited by bureaucratic employees who fear for their positions, leading them to obstruct, delay, and procrastinate? This is a specific case, not inherent to bureaucracy. But what about employees who obstruct citizens' transactions to extort bribes from them? This is truly prevalent in government departments!
In Iraq, where corruption is systematic, Islamic jurisprudence is transformed into a cynical liberalism, where the forbidden is permissible, and it is the witness by which the absent is measured!
This digression is not without purpose. Returning to the core issue of abandoning the socialist mindset necessarily involves navigating the trenches of politics, political Islam, economic failure, and the decline and corruption of power.
Indeed, labeling our rentier state, which relies on oil production and sales, as a socialist state is a fundamental error—an error rooted in the illusions of the previous political regime and those of so-called nationalist states like Syria, Nasserist Egypt, Gaddafi's Libya, and Algeria. These regimes raised the banner of socialism while clinging to state dominance over the economy, politics, and society.
Some achieved relatively good growth rates, but these were unsustainable due to the authoritarian tendencies of the political system. The problem with these regimes extends beyond state economic control to police state dominance and political despotism. Herein lies the dangerous flaw.
The issue transcends this or that intellectual concept or development plan; it concerns the relationship between the state and the people.
The social contract between the state and the people is broken and reduced to a brutal authority imposing its conditions—an authority, not a state, because the state has been subservient to the political system.
Let us consider this point carefully.
The urgent democratic demands in Iraq can be summarized as follows: rebuilding the state and freeing it from the clutches of corruption and the control of political forces.
These demands have been thwarted by the existing political system, and specifically by the forces that hold power.
The sectarian power-sharing system has squandered the accumulated capital of the rentier state, increased its debt, and undermined the credibility of its leaders, raising doubts about their competence in managing the economy, politics, and social affairs. The problem lies here. The real issue is here, not in any intellectual or mental model!