IRAQ'S STREET IS FEELING THE PRESSURE WARNING SIGNS TO FIX IRAQ'S ECONOMY

 

Parliamentary warnings about the economic exhaustion of the Iraqi street... Are lean years looming on the horizon?

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MP Duha Laibi, from the Coordination Framework, sounded the alarm regarding the deteriorating living and service conditions in the country, stressing that the Iraqi street has become “completely exhausted” from the burden of the recent economic measures and reforms that have negatively affected its daily strength and future livelihood, at a time when large segments of citizens lack the most basic necessities of life and essential services.

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Laibi told Al-Maalomah that “the ongoing waves of demonstrations and protests in various governorates are nothing but a natural reflection of the deep-rooted unemployment crisis,” explaining that “thousands of graduates continue to flock to the streets to demand their legitimate rights to appointment and job opportunities, coinciding with a state of overwhelming public discontent fueled by the continuation of corruption files and the waste of public money without decisive solutions.”

She added that “the successive wars and conflicts in the region have cast a heavy shadow on the joints of the national economy and levels of national income, leading to a direct erosion of the purchasing power of citizens and exacerbating the harshness of living conditions.”

Laibi revealed “an anticipated parliamentary movement that includes proposals and legislative actions aimed at curbing inflation and ensuring the stability of the Iraqi dinar exchange rate to protect the purchasing power of the citizen,” while stressing the need for the government to adopt flexible economic policies that take into account the human and livelihood dimension, and avoid burdening vulnerable classes with additional burdens that they cannot bear.”

The MP explained that “despite the House of Representatives being in its current legislative recess, this temporary stagnation will not disrupt oversight mechanisms,” emphasizing that “the relevant parliamentary committees and MPs concerned with oversight are closely and continuously monitoring all new government decisions and measures, especially those related to the pressing economic situation and exchange rate policies, to ensure that the situation does not deteriorate further.”

 

An economist warns: Tampering with salaries will ignite the Iraqi street.

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The head of the General Syndicate of Money Exchange and Mediation, Diaa Al-Tai, stressed that Iraq needs a package of urgent measures to address the liquidity and revenue crisis, warning that any tampering with employees’ salaries could lead to widespread protests and major social repercussions.

Al-Ta’i added in a statement to “ Al-Jarida ” that “the fastest and safest solution at the present stage is to obtain a quick loan that guarantees the continued payment of salaries and covers the state’s financial obligations,” indicating that “protecting citizens’ salaries must remain a priority to avoid disturbances that may affect general stability.”

He explained that Iraq is currently facing a crisis in revenues and cash liquidity, calling for reform of the banking system and activating the role of other financial institutions, especially exchange companies, in order to contribute to increasing the volume of cash in circulation and attracting funds to the economic cycle.

He pointed out the need to review the salary file by addressing cases of dual employment, canceling undeserved salaries, and eliminating what is known as “ghost employees,” in addition to stopping new appointments in all their forms, with the exception of ministries and sectors that are imposed by urgent necessities.

Al-Ta’i believed that it was necessary to form a specialized youth team working in the field to diagnose economic problems and develop quick, implementable solutions within a period not exceeding 90 days, with a focus on stimulating investment in its various forms and finding practical mechanisms to attract the large amount of cash held in homes to the formal financial sector.

He added that the reform should include the Ministry of Finance itself by transforming it from an entity whose mission is limited to managing salaries and accounts into an institution that leads financial and economic planning and formulates the state’s financial policy, stressing the importance of maximizing revenues without burdening the private sector, by reducing taxes in exchange for implementing a comprehensive and strict collection.

He pointed out that among the urgent solutions is also the launch of industrial, agricultural and commercial projects through licensing rounds, and the reorganization of the labor market by obligating foreign companies operating in Iraq to employ a larger percentage of Iraqi workers, noting that there are other reforms that require a longer timeframe and can be implemented after overcoming the current crisis.

Economist: External borrowing is the best solution to bridge the financial deficit in Iraq

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Economic expert Abdul Rahman Al-Mashhadani presented the option of external borrowing as one of the best current solutions to address the financial deficit in Iraq.

Al-Mashhadani told Al-Furat News Agency that: “The best current option that helps to bridge the financial gap is external borrowing to compensate for non-financial revenues in dollars.”

He added that "external borrowing can maintain the balance of the central bank's financial reserves," explaining that "these loans are characterized by long repayment periods compared to treasury bills and transfers that need to be renewed every 180 days."

Al-Mashhadani pointed out that “treasury transfers are renewed every five years and there is a problem with the existence of debts on the government since 2016 that have not been paid yet,” noting that “external loans are paid in installments when they are due and their interest is less than the interest on internal debts.”

Activating the work of the Development Fund

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When the establishment of the Iraq Development Fund was announced in 2023, we were all optimistic about the goals included in the announcement statement, which aimed to promote economic and social development in Iraq by supporting projects and programs of strategic importance.

Our optimism was further enhanced by what was stated in the Fund’s eight objectives, in line with the investment opportunities presented in cooperation with the National Investment Authority across all economic sectors. These ranged from giant strategic projects and their supporting projects, such as the Development Road project, which was said to provide investment opportunities with a future value of $150 billion, including the construction of industrial cities, logistics centers, and advanced connectivity networks, to housing sector projects under the partnership and investment financing system, passing through infrastructure, education, and electricity projects, in addition to renewable energy and associated gas recycling projects. It was said at the time that the total investment opportunities exceeded 120, which would achieve sustainable development in various economic sectors in the country, in addition to the enormous job opportunities that it would provide. 

However, the steps in this direction were somewhat slow, for reasons that may be procedural, and reasons related to the financing of the fund. Apparently, the financing was limited to the allocations of the general budget, as announced, without real activation of what was stated in “Sixth of the paragraphs of the objectives of the fund,” which stipulates “attracting the financial mass available to the private sector that is looking for investment outlets to employ it in strategic, environmental and service projects.” 

It is worth mentioning here what was said about the Fund opening up to the public after the previous government officially announced its intention to open the door to public subscription to citizens based on the official value of the Iraqi dinar, to ensure the stability of the value of their savings and protect them from market fluctuations. This measure could have created an important economic change in the movement of the market and in the work of the Fund, and contributed to withdrawing the hoarded cash mass with the public, which is estimated at about 70 percent of the issued currency, while the wheel of development turns and a state of monetary stability is achieved. However, this did not happen according to our monitoring of the work of the Fund, even though the official data indicates that the participation of citizens through the purchase of shares is a fundamental pillar in the adopted work strategy.

Today, in support of the current government’s directions regarding activating the fund’s work, the Central Bank of Iraq announced financial support of up to about $10 billion for private sector projects and securing a future subscription environment, which gives the fund a good funding base. This support can contribute to increasing public confidence in the fund and motivate those in charge of it to expedite the presentation of investment opportunities and open the door for public subscription at this particular time, in order to achieve economic and development goals and avoid the expected recession resulting from the decline in oil revenues. Everyone is waiting.

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Trump's new agreement: 60 days to test the seriousness of disarmament and cutting off funding to factions

Tom Barrack's team is developing a plan to support the economy and electricity sector and end Iran's influence.

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Shiite parties and armed factions are preparing to receive Tom Barrack, the US President's envoy to Iraq and Syria, with a different version of their traditional rhetoric. The most prominent theme is demonstrating their readiness to engage in a new phase, one less reliant on weapons and more aligned with the logic of the state.

Simultaneously, a special team associated with the US envoy is working on proposals and plans related to ending Iranian influence in Iraq and advancing economic reforms. This comes at a time when the anticipated US-Iranian understanding offers Baghdad a new opportunity to test its ability to implement long-awaited commitments.Politicians and analysts believe that the expected agreement between Washington and Tehran opens a 60-day window, representing a simultaneous test for Iran, Iraq, and the armed factions. The most significant obstacle to this phase appears to be the refusal of some factions to surrender their weapons.Under increasing US pressure, the government of Ali al-Zaidi had begun simultaneously addressing three interconnected issues: consolidating weapons under state control, pursuing networks of influence and finance linked to the factions, and launching broad economic reforms.

An American Deadline and an Iranian Test:Former politician and MP Mithal al-Alusi says that the American-Israeli-Iranian crisis, conflict, and war are “far greater, deeper, and more dangerous than a mere declaration of agreement, goodwill, or extension of a ceasefire.”He adds to Al-Mada that what was announced between Washington and Tehran amounts to nothing more than an extension of the ceasefire, while the core issues remain under scrutiny and study.According to al-Alusi, the United States has granted the Iranian regime an additional 60-day grace period to prove its good faith and demonstrate its ability to be “a legitimate regime within Iran, in the Middle East, and for the international system and regional security.”He affirms that American demands remain unchanged and include the Iranian nuclear program, missiles, human rights, the nature of the internal security apparatus, as well as Iran’s regional role in Iraq, Lebanon, Yemen, and the Gulf.Al-Alusi believes that this same deadline represents a test for the new Iraqi government to prove its ability to disarm militias, combat corruption, activate the judiciary, and consolidate the foundations of a federal state.

He adds that the US-Iranian agreement gives Baghdad an opportunity to provide practical evidence of the success of its reform programs, while simultaneously giving Iran a chance to demonstrate that its interference in Iraq will not return to its pre-war levels.These assessments coincided with statements by US President Donald Trump, who confirmed that an agreement with Iran was scheduled to be signed on Sunday, asserting that it would pave the way for the resumption of normal navigation in the Strait of Hormuz.Trump wrote on the Truth Social platform that signing the agreement would mean "opening the Strait of Hormuz to everyone," emphasizing that the understanding would not involve any exchange of funds between the two sides.He added that the United States would address the Iranian nuclear issue later, once the situation stabilized, saying, "When things are calm, we will go in and take the nuclear materials and destroy them, whether in Iran or in the United States."Trump's statements reinforce the prevailing impression among observers that Washington views the anticipated agreement as a new test of Tehran's regional behavior, not a final settlement of contentious issues, primarily the nuclear program and Iranian influence in the region, including Iraq.

Barrack's visit... a direct message from Trump.Al-Alousi believes that the anticipated visit of Tom Barrack to Iraq represents a significant political test, especially since Barrack is handling the Iraqi and Syrian files with a direct mandate from US President Donald Trump.He says that the Iranian file is "in Trump's hands personally," and that Barrack's selection reflects the US president's desire to keep Iraq under direct White House supervision.According to Al-Alousi, Trump links the Iraqi file to the Iranian one, making the coming months a test for both Iraq and Iran, as well as for the new government in Baghdad.He adds that Washington and Barrack's office have already begun developing plans to support the Iraqi government, the economy, and the electricity sector, but are waiting for "proof after proof" that Baghdad is distancing itself from Iranian influence and moving closer to a model of an institutionalized state.Al-Alousi goes even further, stating that the United States has thrown its weight behind al-Zaidi's government and will not allow Iran to undermine it or armed factions to impose their will, as happened with previous governments.He points out that the available information confirms that the Iraqi government, along with several political forces and faction leaders, is seeking, through Tom Barrack's visit, to signal that it has indeed entered a new phase, one based on turning a new page in its relationship with Washington.Information obtained by Al-Mada indicates that Trump's unannounced strategy for Iraq, entrusted to his special presidential envoy Thomas Barrack, will not be limited to the military dimension but also aims to cut off the financial and economic support flowing to Tehran.Behind the scenes, Tom Barrack had been managing the Iraqi file for months before his official appointment. Since last February, with the mysterious disappearance of the previous envoy, Mark Savva, from the Iraqi scene, Barrack has been quietly moving to the forefront of managing this file.When his appointment was officially announced last May, he had already effectively taken control of the relationship with Baghdad, indicating that the White House had restructured its approach to Iraq. This reflects a shift towards managing the issue from a higher level and directly linking it to Washington's broader calculations regarding Iran and the region.

Sanctions are ready.Alousi emphasizes that what is required of Baghdad is to activate the Iraqi constitution and solidify the parliamentary and federal system, asserting that the United States will defend this path.He warns that Washington may resort to measures more stringent than traditional sanctions if it perceives attempts to undermine its project in Iraq, including asset freezes, prosecutions, and the issuance of international arrest warrants.He says that the United States wants the Iraqi state to succeed and for the partnership between Baghdad and Erbil to be strengthened, and that relevant American institutions have already begun developing plans and mechanisms to assist Iraq and protect its institutions from Iranian interference.Al-Alousi concludes by saying that the US-Iranian agreement could present a positive opportunity, but it could also become the beginning of the end for the existing political system if Iran or the armed factions prove, within the 60-day period, to continue interfering in and influencing Iraq's stability.

Weapons and money under scrutiny.For his part, Ghazi Faisal, head of the Iraqi Center for Strategic Studies, believes that any stable understandings between Washington and Tehran will have a positive impact on Iraq and Iraqi-Iranian relations.However, he points out that some Iranian leaders have sent messages to the armed factions urging them to retain their weapons and not surrender them, which raises questions about the extent to which these factions will abide by the decisions of the Iraqi state.Faisal confirms to Al-Mada that all armed factions are supposed to return their weapons to the official institutions, represented by the Ministry of Defense, the Ministry of Interior, and the Commander-in-Chief of the Armed Forces.He bases this on the provisions of the Iraqi Constitution, particularly Article 9, which prohibits the formation of militias outside the framework of the state, and Article 8, which obligates Iraq not to interfere in the affairs of other countries and not to engage in regional conflicts.He adds that some factions have become involved in regional conflicts over the past years that do not serve Iraqi national interests, considering that restricting weapons to the state is a fundamental step towards strengthening stability and building a state of institutions.Regarding Iraqi funds and Washington's conditions, Faisal says that their return to state institutions is contingent upon technical and legal procedures between Baghdad and Washington involving the Ministry of Finance, the Central Bank of Iraq, and relevant US financial authorities. He points out that the primary US concern is ensuring that these funds do not reach armed factions designated as terrorist groups.He believes the Iraqi government is capable of making progress on this issue if it provides clear and reliable guarantees regarding oversight and spending mechanisms. Faisal believes that the era of funding and arming armed factions outside the framework of the state must end, given the growing US and international reservations about the Iranian Revolutionary Guard and the Quds Force.He adds that it is essential for Iran to reconsider its relationship with these factions and cease interfering in the affairs of other countries or supporting armed groups in the region. He concludes that the future of the Middle East must be based on respect for the sovereignty of states and the promotion of cooperation, development, and stability, instead of the continuation of proxy wars and conflicts.

Abu Kalal: We are keen to support foreign companies operating in the oil sector.

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 The head of the Media and Communications Commission, Baligh Abu Kalal, affirmed the commission’s commitment to supporting foreign companies operating in the oil sector, based on the importance of this sector in supporting the national economy and promoting development.

A statement issued by the Media and Communications Commission (MCC) and received by Al-Furat News indicated that its Executive Director, Baligh Abu Kalal, met with Ni Chuan, President of PetroChina International in Iraq, the operator of the West Qurna/1 oil field, to discuss several files of mutual interest in the technical and regulatory fields.

During the meeting, Abu Kalal emphasized the MCC's commitment to supporting foreign companies operating in the oil sector, given the sector's importance in bolstering the national economy and promoting development. He also noted the Commission's dedication to providing a stable and flexible regulatory environment that supports investment and facilitates the operations of companies working in Iraq.

The statement added that the meeting also addressed ways to enhance cooperation in training, capacity building, and knowledge transfer, particularly in artificial intelligence and cybersecurity technologies, to develop national expertise and keep pace with rapid technological advancements.

He continued, "Opportunities for cooperation within the framework of the company's social benefit programs were also discussed, particularly initiatives related to the communications, media and information technology sectors, which contribute to supporting development projects, building capacities and enhancing the use of modern technologies in the service of society. Both sides emphasized the importance of strengthening technical partnerships and exchanging experiences in a way that serves the goals of sustainable development and supports technological development projects in Iraq."

Can Iraq control its revenues independently of American influence? A legal expert explains.

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Legal expert Ali al-Tamimi explained how Iraq can control its oil revenues and funds, free from American influence and control over these funds.

Al-Tamimi told Al-Maalouma that "Iraq's oil revenues were deposited with the US Federal Reserve Bank by virtue of UN Security Council Resolution 1483, issued in May 2003, which obligated Iraq to transfer all oil and gas revenues to a special account in the name of the Central Bank of Iraq at the US Federal Reserve."

He added that "the Security Council resolution can be amended or revoked by the Council itself, but this requires the approval of a majority of its members, including the five permanent members."

He indicated that "Iraq can have greater control over its funds if it takes steps to reduce its dependence on the US dollar and increase the independence of its fiscal policy by diversifying the currencies in Iraqi reserves, developing a local payment system based on the dinar, increasing cooperation with other countries to facilitate trade in local currencies, improving the management of foreign reserves, and reducing reliance on the dollar."

Massoud Barzani meets with Iraqi General

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Kurdistan Democratic Party (KDP) President Massoud Barzani has said that there should be coordination between the security and military agencies between the federal government and the Kurdistan Region.

 

A high-level delegation accompanied the Iraqi army chief

Kurdistan Democratic Party (KDP) President Massoud Barzani met with a high-level Iraqi military delegation led by Iraqi General Lieutenant Colonel Abdul Amir Rashid Yaralla in Pirmam on Sunday, the Barzani headquarters said in a statement.

Discuss the security and political situation in Iraq and the region

The meeting focused on the political and security situation in Iraq and the region, and stressed the need for full coordination between the security and military agencies of the federal government and the Kurdistan Regional Government, in order to further maintain security, stability and prosperity throughout Iraq.

Uncertainty surrounds Washington: How will al-Zaidi's visit reshape Iraqi-American relations?

 

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Professor of Political Science Dr. Khalifa Al-Tamimi revealed on Sunday (June 14, 2026) that any future visit by Iraqi Prime Minister Ali Al-Zaidi to the White House will focus on four main and direct issues with the American administration, foremost among them the financial file and the future of energy.

Al-Tamimi told Baghdad Today that the Prime Minister's upcoming visit to the United States will put four key issues on the table for discussion, most notably the financial situation and exploring mechanisms for developing investment, particularly in the oil and gas sectors. He added that the talks will also include the security aspect, in accordance with the terms of the Strategic Framework Agreement.

He added that "among the main issues is outlining the nature of the relationship between Baghdad and Washington for the next stage, especially since the United States has extensive vital interests in Iraq, at a time when the country is going through a sensitive and complex phase that requires the government to define its strategy in a way that preserves the supreme national interests and regulates the form of partnership with the American side."

Al-Tamimi pointed out that "the visit will consciously address how to support Baghdad in light of the financial crisis that has begun to take on critical dimensions, especially with the continuation of the Strait of Hormuz crisis, which has complicated the marketing of about 90% of Iraqi oil exports, which constitute the main nerve of the general budget."

The political expert pointed out that "the current US administration differs in its orientations from previous administrations, and the features of its policies towards Baghdad are still not entirely clear," suggesting that "this visit will provide decisive and important answers regarding how Washington will deal with the Iraqi file in all its complexities."

Al-Tamimi concluded by saying: “The Prime Minister’s visit to the United States may constitute a turning point in the course of the Iraqi financial crisis, through discussing the possibility of obtaining emergency exemptions related to energy or exports, and redrawing Iraq’s financial policies in a way that positively impacts internal economic stability.”

It is worth noting that Iraq and the United States share deep-rooted political, security, and economic ties based on the Strategic Framework Agreement signed in 2008, which governs cooperation between the two countries. These moves come at a time when Baghdad faces mounting financial challenges due to the volatility of the global energy market and the logistical pressures associated with oil exports, amidst concerted government efforts to attract foreign investment and expand international partnerships to diversify national income sources.

Finance Committee: No indications of the 2026 budget being approved, and the  governmentcontinues spending according to the existing law.

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Member of the Parliamentary Finance Committee, Hussein Al-Daraji, confirmed that current data does not indicate the possibility of approving the general budget during the year 2026, indicating that the Finance Committee intends to hold a series of meetings during the next legislative session to discuss the available alternatives and ensure the continued funding of state institutions.

Al-Daraji explained that the next stage requires finding financial and economic solutions that are compatible with the current circumstances, in order to ensure the continuity of implementing government commitments and covering basic and necessary expenses.

In the same context, the financial advisor to the Prime Minister, Mazhar Muhammad Saleh, explained that the state’s financial policy during the year 2026 is still managed in accordance with the provisions of the Federal Financial Management Law No. (6) of 2019, especially Article (13), which allows spending at a rate of (1/12) per month of the previous year’s expenditures in the event of a delay in approving the budget.

He pointed out that this mechanism contributed to ensuring the continuity of government spending, including salaries, wages, social welfare, and financing of ongoing projects according to completion rates and available liquidity.

He added that public finances are facing increasing pressure as a result of regional developments and the volatility of global energy markets, and the resulting impact on oil revenues, which represent the main source of funding for the public treasury.

Saleh explained that the government is moving towards preparing the 2027 budget within a reform vision aimed at rationalizing spending and raising its efficiency, while preserving social programs, enhancing non-oil revenues, and supporting digital transformation and administrative reform.

 

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Behind the London Dialogue: FROM BANK REFORM TO BAGHDAD'S REVIVAL

 Behind the scenes of the London Dialogue

Bank sanctions: Americans stick to their conditions and the Iraqi negotiator is weak.

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On Saturday, June 13, 2026, economist Ziad Al-Hashemi revealed details of a dialogue session held in London that brought together the Central Bank and Iraqi banks with an international consulting firm. He highlighted the reasons for the continuation of US sanctions on some banks, attributing the matter to complex conditions related to changing ownership percentages, in addition to the Central Bank's "weakness" in negotiating with the US Federal Reserve, which resulted in a limited number of banks monopolizing dollar transfers.

In contrast to this crisis, Al-Hashemi conveyed the session’s praise for the positive aspects of Iraqi banks, represented by the initiative of the Association of Private Banks, which succeeded in reviving Baghdad’s heritage streets, such as Al-Rashid and Al-Mutanabbi, after decades of government neglect.

The Association of Iraqi Private Banks adopted the “Pulse of Baghdad” initiative in July 2023 in cooperation with the Baghdad Municipality, to rebuild and rehabilitate Baghdad’s heritage areas, including “Al-Sarai Axis, Al-Sarai Market, historical government buildings, Al-Mutanabbi and Al-Rashid Streets.”

Al-Hashemi's Facebook post:

The Central Bank of Iraq and its banks in London, caught between the plan to reform the Iraqi banking system and the reconstruction of the heritage city of Baghdad!

A roundtable discussion session was held a few days ago in London with the participation of directors from the Central Bank of Iraq, some Iraqi banks, and a representative from the consulting firm (Oliver and Ayman). I personally participated in that session along with other invitees!

The gist of what was said was that work is underway to reform the banking system, that many banks have implemented the standards of the American reform plan, and that the next phase may open the door for new banks to deal in various currencies (other than the dollar)!

There are many obstacles that still hinder the full implementation of that plan, the most important of which is changing the ownership percentages of some of those banks. This may have been one of the reasons that have so far hindered lifting the restrictions on dollar transactions for banks that were previously prohibited, despite some of those banks' compliance with other federal standards and conditions!

Another reason for the continuation of these sanctions is also the weakness of the central bank in negotiating, whether with the Federal Reserve or the consulting firm, to restore the rights of compliant banks and lift federal sanctions against them, leaving dollar transfers in the hands of a limited number of banks in a clear monopolistic situation!

Apart from the predicament of sanctions and the weakness of the Central Bank in the face of the Federal Reserve, it was remarkable to hear that there is an Iraqi entity called the (Association of Banks) that took the initiative years ago to revive, rehabilitate and develop the (Baghdad Heritage) area in Al-Mutanabbi Street and Al-Rashid Street!

That area, which has suffered from deliberate neglect by successive governments, has been in a state of clinical death for decades, despite its historical and human importance to Iraq and Iraqis. Al-Rashid, Al-Mutanabbi and Al-Qishla are sites that not only carry the history of Baghdad in their alleys and buildings, but are an area that lives in the conscience of every Iraqi and Baghdadi who knows the value of Baghdad and the history of Baghdad!

Therefore, to see that there are those who have worked diligently and quietly to rehabilitate that area, bring it back to life, and put it back on the list of Iraqi historical and tourist sites, despite the bureaucracy and obstacles of the Iraqi governments, is a work that deserves all praise and thanks, and we hope to see more work and initiatives to revive what remains of that area, for Baghdad and its history deserve all this work and even more!

Explosion heard near Qeshm Island and Sirik in Iran - Breaking

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Mehr News Agency reported on Saturday (June 13, 2026) that explosions were heard in areas of southern Iran, specifically near Qeshm Island and the Sirik region.

The agency reported that explosions were heard in the vicinity of Qeshm Island and Sirik, without any immediate official explanation regarding the nature or cause of the explosions.

Iranian authorities have not yet released further details about the incident, while media and security circles are awaiting official statements clarifying the circumstances of what happened.

This news comes amid escalating security and military tensions in the region, particularly in the southern regions of Iran overlooking the Gulf, which include strategic sites, ports, and vital facilities.

Qeshm Island and Hormozgan Province are of particular importance due to their proximity to international sea lanes linked to global energy and trade traffic.

46% non-oil: An ambitious goal for restructuring Iraq's finances

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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.

Source: Al-Zaidi will discuss the US withdrawal and arms control in Washington next month

 

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An informed source revealed on Saturday (June 13, 2026) that Prime Minister Ali Faleh al-Zaidi will discuss a number of important political and security issues during his upcoming visit to Washington next month, foremost among them the future of the American military presence in Iraq.

The source told Baghdad Today that "the issue of the American withdrawal from Iraq will be at the top of the agenda of the talks that Al-Zaidi will hold during his visit to Washington," indicating that "the anticipated meetings will also address security developments and joint coordination between the two countries."

He added that "the Prime Minister will also discuss the issue of restricting weapons to the state, as it is one of the main issues raised in the Iraqi-American dialogue during the next stage."

The source indicated that "the US administration will stress during the meetings the need for the Iraqi decision not to be influenced by Iranian influence," stressing that this issue will be among the topics to be discussed between the two sides.

Government spokesman Haider al-Aboudi confirmed in a press conference followed by “Baghdad Today” that “the Prime Minister’s visit to Washington includes key files, foremost among them the economic aspect,” stressing that “regarding the preparation of a budget for 2026 or going to prepare a budget for 2027, the matter is left to the Ministry of Finance.”

He added, "The timeframe for restricting weapons to the state is clear and a time limit was set for it in September," indicating that "the government adopted a realistic vision for the issues and provided appropriate solutions for them."

He pointed out that "the government is managing its commitments according to a well-thought-out package of measures in light of the security and economic conditions," stressing that "the government has decided to proceed with drafting a program budget in cooperation with the World Bank and the Parliamentary Finance Committee with the aim of improving spending policy."

Iraq commits to US sanctions on Iranian oil, seeks alternative fuel imports: Oil ministry

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The Iraqi oil ministry announced on Saturday that the government is committed to the US-imposed restrictions on Iranian oil exports, saying that the country will resort to alternative import routes to address rising gasoline shortages. 

“To resolve the outstanding gasoline issue, Iraq will import oil through SOMO [State Oil Marketing Organization,” Salim al-Rukabi, spokesperson of the ministry, told Rudaw, adding that Baghdad is committed to the “decision regarding the sanction on Iran” and hence will not export oil from the neighboring country. 

Rukabi noted that daily gasoline consumption has reached 34.5 million litres, while domestic production ranges between 30 million and 31 million litres.

The announcement comes as Iraq has faced significant shortages of gasoline production following the US-Israel war against Iran that began in late February, which led to the withdrawal of foreign companies from southern refineries, according to Rafidh Sadiq, head of the state-run Oil Products Distribution Company at the oil ministry, who spoke to Rudaw on Saturday. 

Sadiq also said that an abrupt suspension has occurred at the Fluid Catalytic Cracking (FCC) project in southern Basra province - which takes heavy, leftover fuel oil and cracks it into high-standard premium gasoline.

“Regional security incidents and the withdrawal of foreign companies” from southern refineries have resulted in a loss of 4 to 5 million liters of “high-octane premium gasoline,” according to Sadiq.

In November, Iraq announced curbing all gasoline, gas oil, and kerosene imports, declaring a state of self-sufficiency in refining capacity to address domestic needs. 

The imports ban was announced weeks after the FCC had become operational, making it integral to the decision.

It also coincided with the deadline set by the US government against purchasing energy from Iran. 

However, the companies managing the FCC halted operations in the face of the ongoing regional hostilities. 

On February 28, the United States and Israel launched a military campaign against Iran, sparking direct regional confrontations that lasted for nearly six weeks before Washington and Tehran agreed to a ceasefire on April 8. 

Iran responded by attacking US interests in the region, including western oil companies operating in Iraq.

The hostilities have drastically reduced Iraqi oil exports to approximately 10 million barrels in April, as opposed to its peacetime equilibrium of over 90 million barrels monthly.

Declining oil revenues have readily impacted the Iraqi government’s ability to subsidize gasoline prices, with Baghdad absorbing the financial loss directly through its state budget, setting fixed, highly discounted retail prices for standard fuel at the pump.

Of note, the Kurdistan Regional Government (KRG) provides gasoline and kerosene from its own refineries independent from Baghdad.

Halting imports from Iran has recently caused gasoline prices in the Region soar from an average of 850 Iraqi dinar ($0.65 cents) to 1175 ($0.90 cents) per litre for regular unleaded gasoline.

Communications: Five giant mobile screens to broadcast the national team's matches in public places

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Minister of Communications Mustafa Sand announced today, Saturday, the provision of five giant mobile screens to broadcast the matches of our national team to the public in public places.

Sand said in a statement received by Al-Furat News that: "In coordination with Channel 4 and the governors, five giant mobile screens have been provided to broadcast our national team's matches to the public in public places, as follows:

- Baghdad, Tahrir Square, Earthlink Company
- Basra, Al-Khora Gardens opposite the mall, FiberX Company
- Nineveh, Al-Muthanna Park, Noor Al-Bidaya Company
- Dhi Qar, Nasiriyah Corniche, Supercell Company
- Anbar, Fallujah Stadium, Al-Rahma Company

Sand called for “taking into account the special nature of the holy month of Muharram during gatherings and celebrations, especially the timing of the national team’s matches, which coincide with days of particular sorrow for the Iraqi people and lovers of the Ahlulbayt in various countries around the world,” offering his apologies to the other governorates, as this is what is currently available.

Al-Zaydi's advisor: No return to rentier budgets, new plans to diversify income sources - Urgent

 

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On Saturday (June 13, 2026), the Prime Minister’s Advisor for Financial Affairs, Mazhar Muhammad Salih, expressed his optimism about a plan developed by Prime Minister Ali al-Zidi to diversify the country’s sources of income, indicating that al-Zidi confirmed that there is no going back to the rentier budget that depends on selling oil.

Saleh told Baghdad Today, “It is shameful that we still import some oil derivatives to this day, in addition to our reliance on selling crude oil, at a time when, if a barrel of crude oil were to be put into manufacturing and conversion processes into petroleum products, its value could rise to nearly seven times its price.”

He added that "the price of a single barrel, after being converted into petroleum products, could exceed $400, which would boost the financial revenues of the Iraqi state's general budget."

Saleh pointed out that "the Prime Minister, as a son of the economic sector, will proceed with activating the various economic aspects in the country, and the economic mindset will change, as President Al-Zidi has a youthful vision, and will proceed with plans capable of reviving the economy of the Iraqi citizen, which is the least that the citizen deserves."

The Iraqi economy relies mainly on oil revenues, which constitute the largest share of the general budget resources, while Iraq continues to import part of its needs for oil derivatives despite having large oil reserves.

Over the past years, successive governments have put forward plans to develop the refining and petrochemical industries with the aim of increasing the added value of crude oil and reducing dependence on imports.

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Program and performance budgeting: A qualitative shift in financial resource management

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The Program and Performance Budgeting (PPP), which Prime Minister Ali al-Zaidi directed to be adopted, is a comprehensive system for allocating government financial resources based on actual achievements. It is also a modern financial planning and management tool that links financial allocations to realized results. Instead of blindly funding traditional line items (such as salaries and maintenance), this system allocates funds to specific goals and projects, thereby helping to rationalize spending, enhance transparency, and measure the efficiency of government performance.

Experts in the government's shift to program-based budgeting see it as an important step to address the imbalances that have plagued traditional budgets in recent years, stressing that its success hinges on implementing institutional reforms. Integrated technical and administrative systems.

 

A necessary transformation

In this regard, financial expert Dr. Mustafa Akram Hantoush stated that adopting a program-based budget is a necessary shift after decades of operating with a line-item budget, which saw the allocation and expenditure of enormous sums on projects, many of which remain incomplete. He explained that the essence of the new budget lies in linking government spending to specific objectives and measurable results by focusing on a limited number of priority projects and sectors and ensuring their completion within clear timeframes. This contributes to reducing financial waste and increasing efficiency. 

Using public resources.

Hantoush added, in an interview with Al-Sabah, that this approach could provide a more effective basis for implementing major strategic projects, especially in the infrastructure, energy, and transportation sectors, such as electricity projects, the Grand Faw Port, and the Development Road, thus enhancing economic growth opportunities and supporting diversification efforts. Sources of national income.

 

Information system

Meanwhile, banking expert Dr. Nabil Rahim Al-Abadi stated that the shift to program budgeting is not limited to changing the budget preparation mechanism, but requires building an integrated financial and administrative system capable of monitoring implementation and measuring performance in real time. He explained that one of the most prominent challenges facing government spending in recent years has been the accumulation of obligations and the disruption of disbursements due to weak systems. 

Administrative and oversight aspects necessitated the development of a unified government financial information system that links all state institutions to the public treasury and provides accurate and immediate data on progress rates. 

And spending levels.

In his interview with Al-Sabah, Al-Abadi stressed that the success of the program budget hinges on the state's ability to develop the banking sector and enhance digital transformation and e-governance. He pointed out that directing spending towards productive investment projects can have positive effects on economic growth and monetary stability, while weak or delayed implementation could lead to increased liquidity without returns. 

Real economy.

In a related vein, economic researcher Dr. Mustafa Muhammad Ibrahim considered program and performance budgeting to be one of the most important paths required to achieve economic reform in Iraq, especially given the continued heavy reliance of the national economy on oil revenues. He explained that this type of budget provides more accurate mechanisms for measuring government performance and monitoring spending efficiency, in addition to its role in enhancing transparency and accountability. 

Within public institutions.

Ibrahim added, in an interview with Al-Sabah, that implementing program budgeting requires professional independence in budget preparation and utilizing specialized economic and financial expertise, in addition to developing the legal and administrative environment that ensures the implementation of programs according to clear objectives and indicators. 

Measurable performance, indicating that true reform is not achieved merely by adopting the concept, but rather by providing the executive will capable of transforming it into a practical reality that is reflected in the level of services. 

Economic development.

He argued that program and performance budgeting presents a significant opportunity to restructure and improve the efficiency of public spending. However, he noted that its success requires a set of essential conditions, foremost among them government digitalization, the development of banking and regulatory systems, enhanced transparency, and linking spending to results. This ensures a shift from managing resources based on financial allocations to managing them according to performance indicators and development goals, which constitutes a fundamental pillar for achieving economic reform.Sustainable in Iraq.

 

A budget unlike any before: Al-Zaidi's government pursues unprecedented economic reforms to control government spending.

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The Iraqi government is proceeding with a reformulation of its public budgeting philosophy, gradually shifting from the traditional spending model to a "program-based budget." Economic circles view this move as potentially laying the foundation for a new era based on linking public funds to objectives and results, enhancing spending efficiency, and rationalizing expenditures in line with the requirements of financial and administrative reform.
This approach comes at a time when the region is facing rapidly evolving economic and regional challenges, compelling governments to adopt more flexible resource management policies. Baghdad affirms its continued commitment to safeguarding financial stability and ensuring the financing of essential obligations, while simultaneously developing future budget proposals that adapt to local and international developments.

Finance Minister Faleh Sari announced during his discussions with the US Chargé d'Affaires in Baghdad the government's intention to prepare a program-based budget and gradually transition from the traditional system. This aims to increase spending efficiency and link allocations to performance and results, within a reform vision supported by international institutions and seeking to improve the state's financial management.

In this context, MP Hussein al-Khafaji, a member of the Parliamentary Finance Committee, revealed that “the Finance Committee will discuss with the relevant executive bodies various indicators and data related to the financial situation, to ensure that decisions are based on accurate information and a comprehensive vision.” He explained that “there are important files related to strategic projects, contracts, and government commitments that require careful study to ensure the continuity of work and serve the public interest.”

He added to Iraq Observer that “the upcoming meetings will provide a clearer picture of the financial trajectory in the coming period, especially in light of the current economic conditions, which will help to formulate a realistic vision regarding the budget and government spending.”
Observers believe that adopting a program-based budget represents a qualitative shift in public finance management, as it focuses on measuring results and achieving objectives instead of merely distributing financial allocations. This contributes to raising the efficiency of government institutions, reducing waste, improving spending priorities, and enhancing transparency in the implementation of development projects and plans.
Experts also point out that the ongoing coordination between the government, the parliamentary finance committee, and the central bank reflects an institutional framework for managing public finances, particularly given the commitment to securing essential expenditures and safeguarding economic stability. This is being done in parallel with reviewing spending priorities and developing financial planning tools to keep pace with current changes.
While technical discussions regarding the upcoming budget continue, the government appears determined to implement structural reforms aimed at modernizing financial management, improving resource efficiency, and creating a more sustainable environment for public spending. This will ensure the continued implementation of vital projects, support essential services, and bolster confidence in the national economy in the coming period.

Tom Barrack begins a tour of Baghdad and Erbil to discuss security and energy issues.

 

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The US President's Special Envoy to Syria and Iraq, Tom Barrack, is preparing to visit Iraq and the Kurdistan Region next week as part of a tour that includes meetings with government officials and political leaders. The anticipated talks will focus on a number of security and economic issues, including the situation of armed groups, the future of cooperation in the energy sector, and regional developments in Syria and Iraq.

A report published by the American website “Al-Monitor” stated that Barak will visit Iraq on Monday, and extensive talks are scheduled to be held with Iraqi Prime Minister Ali al-Zaidi and senior political leaders, where the American side will focus on demanding the disbanding and disarmament of armed factions, especially those involved in the attacks that targeted American diplomats last April.

In his second stop scheduled for Tuesday, the US envoy will travel to Erbil for high-level meetings with President Masoud Barzani, Regional President Nechirvan Barzani, and Regional Government Prime Minister Masrour Barzani.

The report also revealed a prominent regional agenda that includes a planned meeting between Barak in Erbil with the commander-in-chief of the Syrian Democratic Forces (SDF), Mazloum Abdi.

These accelerated diplomatic moves come amid severe economic complications, as Iraqi oil exports have fallen to a record low of 3.3 million barrels per day from 600,000 barrels per day due to current tensions in the Strait of Hormuz and the repercussions of US sanctions.

On the political front, observers cautiously noted the flexibility shown by the Sadrist movement and armed groups such as “Asaib Ahl al-Haq” regarding the handover of weapons, placing these steps within the framework of an Iranian tactic to maneuver and alleviate international pressures coinciding with the nuclear negotiations.

 

Economic explanation: The Iraqi government lacks the time and revenue necessary to approve the 2026 budget.

 

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Iraqi economist Haider Al-Sheikh said that the Iraqi government currently does not have sufficient financial revenues or the necessary time to prepare the draft general budget law for 2026.

Sheikh explained in a statement to “Roj News” that the closure of the Strait of Hormuz has disrupted maritime traffic and directly impacted Iraqi oil exports, noting that the volume of exports has decreased from about 3.5 million barrels per day to less than one million barrels of crude oil.

He added that the government needs about 140 trillion dinars annually to cover operating budget expenses, in addition to 50 trillion dinars for the investment budget, indicating that providing these amounts has become extremely difficult in light of declining revenues.

He pointed out that monthly oil and non-oil revenues have decreased, according to his estimates, from about 10 trillion dinars to only about 2 trillion dinars, which poses major challenges to financing public expenditures and preparing next year’s budget.

 

Standard & Poor's affirms Iraq's sovereign rating and removes it from negative watch.

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Standard & Poor's Global Ratings affirmed Iraq's sovereign rating at "B-/B" and removed the long-term rating from its negative watch list.

The agency gave a negative outlook, citing the risks of conflict in the Middle East over the next six to twelve months, including continued disruptions to export trade routes through the Strait of Hormuz and the potential for damage to infrastructure.

Iraq’s economy remains heavily dependent on the oil sector, which means it is suffering greatly from the decline in crude exports through the strategic waterway, according to Reuters.

The agency predicted that oil production would average 2.9 million barrels per day for the entire year in 2026, down about 28% from the pre-war average of 4 million barrels per day recorded in 2025, attributing its forecast to current production levels and the fragile recovery expected in the second half.

The agency said that given that oil flows constitute more than 90% of budget revenues and merchandise exports, Iraq’s financial situation and balance of payments are likely to remain under pressure this year, forecasting a 15% contraction in real GDP this year.

Higher average oil prices during 2026 would provide some support for fiscal and external revenues, assuming oil exports gradually recover in the second half, which Standard & Poor's said remains its baseline scenario.

The agency had placed Iraq’s long-term sovereign rating of “B-” on negative watch in March, citing the risk of a downgrade following a sharp drop in oil production linked to escalating conflict in the region.

Iran: Four major banks targeted in cyberattack

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Iranian authorities reported on Saturday evening that four major banks were subjected to a cyberattack that led to disruptions in a number of electronic banking services, stressing that no data or banking information leaks were recorded.

The Iranian Students' News Agency (ISNA) quoted official sources as saying that Bank Melli, Bank Saderat, Bank Tejarat and Bank Tanmiyat al-Sadr faced technical problems from the early hours of Saturday morning that affected mobile banking applications and some other electronic services, causing difficulties for customers in carrying out their transactions.

The banks concerned explained that they sent text messages to their customers to apologize for the disruptions, stressing that technical teams are working around the clock to address the problem and restore services to normal as quickly as possible.

According to sources at the Iranian Central Bank, the disruptions were caused by a cyberattack targeting the infrastructure of some banks, stressing that initial investigations have not shown any indications of customer data leaks or information database breaches.

Amid concerns that financial settlement operations may be affected, the Central Bank of Iran announced emergency measures to ensure the continuation of deposit and transfer operations, noting that funds for beneficiaries who had previously registered reserve accounts in the affected banks would be deposited into those accounts by the end of the day.

The Central Bank explained that shop and business owners who deal with the affected banks will be able to receive their financial dues through pre-registered reserve accounts, ensuring that commercial settlement operations and daily payments are not disrupted.

The monetary authorities confirmed that monitoring of banking systems and digital infrastructure is ongoing, while technical teams continue their efforts to fully restore services and ensure the stability of electronic systems in the country.

The Kurdistan Democratic Party announces its full support for the al-Zaidi government and its reform measures.

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The Kurdistan Democratic Party, headed by Masoud Barzani, announced its full support for the Zaidi government and the reform steps.

A statement issued by the Central Committee of the Democratic Party, received by the Iraqi News Agency (INA), stated that "the Central Committee of the Kurdistan Democratic Party, headed by the party's president, Masoud Barzani, held its expanded meeting. During the meeting, in addition to discussing the harmful repercussions of the recent war between America and Iran on the Kurdistan Region and its energy infrastructure, support was emphasized for the new Iraqi Prime Minister, Ali al-Zaidi, to implement the constitution and secure salaries. At the same time, the continuation of the efforts of the Political Bureau Committee to ensure the success of Barzani's initiative and end the political stalemate in the region was reaffirmed."

The Central Committee also affirmed, in its meeting, according to the statement, that they in the Kurdistan Democratic Party believe that "solving problems through dialogue and understanding is in the interest of all parties, and that the region, including the Kurdistan Region, will not suffer further losses."

The committee's statement explained that "despite the fluctuations in relations, we have consistently tried to resolve any problem or obstacle within the framework of the permanent Iraqi constitution," noting that "despite the accumulation of problems and the lack of attempts to resolve them, our party has pursued a path of continuous dialogue and finding solutions, especially in the area of the budget, entitlements, and salaries of employees in the Kurdistan Region, where all efforts have been made through visits and sending delegations to Baghdad with the aim of finding solutions and removing obstacles."

Regarding the formation of the new cabinet of the federal government headed by Ali al-Zaidi, the Central Committee statement affirmed that they had provided their support and cooperation for this purpose, saying: “We have provided our support and will continue to cooperate and support in the hope that the problems will not be neglected any longer, as agreed upon with the Coordination Framework, and that the constitution will be implemented as it is, and that the financial dues to the Kurdistan Region and the salaries of employees will be sent to the Kurdistan Region on time.”

 

The statement indicated that "the meeting affirmed support for Ali al-Zaidi, the Prime Minister of the Federal Government, in the steps he has initiated to confront corruption, restore the wealth of the Iraqi people to the government treasury, and prevent the waste of the country's resources."

 

He continued: “The meeting also discussed the general situation, highlighting the war between America and the Islamic Republic of Iran, which began in late February of this year, and its effects and repercussions on Iraq in general and the Kurdistan Region in particular,” noting that this war “has caused damage to Iraq and Kurdistan in several areas.”

He explained that “although the Kurdistan Region was not part of that war, unfortunately, even after the war stopped, the missile and drone attacks on the Kurdistan Region did not stop, and they caused serious damage and led to dozens of wounded and martyrs unjustly as a result of those attacks.”

The Central Committee stated in its statement that these attacks caused significant material damage, "leading to a slowdown in commercial activity. The attacks on oil companies also caused severe damage to energy institutions and infrastructure, leading to a halt in oil production, which constitutes a huge loss not only for the region but also for Iraq."

The statement explained that these repercussions and the continuation of the attacks have led to "concern among the people of Kurdistan," noting that they in the Kurdistan Democratic Party believe that "solving problems through dialogue and understanding is in the interest of all parties, and that the region, including the Kurdistan Region, will not suffer further losses."

The meeting commended the steps taken by the President of the Kurdistan Region and his support for the efforts of the Prime Minister of the Kurdistan Region "to address the problems with Baghdad in all aspects, especially regarding the issue of financial entitlements and the salaries of the region's employees. The meeting deemed it appropriate to continue these efforts and steps," based on "a sense of national and patriotic responsibility and a firm belief in mutual acceptance and coexistence in the Republic of Iraq."

The statement concluded by noting that "the meeting took place in a partisan atmosphere, keen to address the problems and concerns of the people of Kurdistan, to advance the political process in Kurdistan, and to strengthen relations with the federal government and the Shiite and Sunni political parties in Iraq."

The Development Fund: Will Al-Zaidi succeed in creating a new financing arm for Iraq?

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Al-Mada/Mohammed Al-Obeidi:
The government's move to establish a "Development Fund" in Iraq is sparking widespread debate in economic and financial circles, given the country's financial crisis and the general budget's heavy reliance on oil revenues. While the government sees the project as an opportunity to attract investments and stimulate economic growth, experts are raising questions about its launch timing, funding mechanisms, and its ability to achieve its objectives under current financial pressures.

This move coincides with political and economic initiatives led by Prime Minister Ali Faleh Al-Zubaidi, who is seeking to garner domestic and international support for the fund as an investment platform aimed at financing infrastructure projects, creating jobs, and diversifying sources of economic growth away from traditional dependence on oil. Government officials have spoken of international contributions and guarantees that could reach between $100 and $150 billion, in addition to hopes of attracting further investments and partnerships in the coming phase. Regarding
the Washington visit
, financial and banking researcher Haider Al-Sheikh told Al-Mada that "the Development Fund is an investment fund based on contributions from foreign and Arab companies, and the government has set a minimum capital of $100 billion."

He added that “the Prime Minister’s upcoming visit to the United States could contribute to enhancing the project’s chances of success, particularly through meetings with representatives of American and foreign companies and inviting them to invest in Iraq.” He explained that “the entry of American companies could pave the way for more Arab and foreign companies to participate in investment projects through the Development Fund.”

Sheikh clarified that “the project is inherently investment-oriented, and the government’s role is to create a suitable environment for investors and enable them to implement projects, thereby contributing to stimulating the economy and expanding the investment base.” He pointed out that “the Fund is not primarily focused on direct operational spending, but rather aims to attract capital to productive and developmental projects.”

The idea of establishing a sovereign wealth fund or a development fund is not new to Iraq. In recent years, successive governments have proposed similar initiatives and ideas aimed at investing oil wealth, diversifying income sources, and promoting long-term investments.
However, most of these projects remained within the realm of official pronouncements and declarations, failing to materialize into effective institutions on the ground. This was due to challenges related to financial crises, mismanagement, fluctuating oil prices, high operating costs, and political and administrative disputes. Regarding
the timing dilemma
, economist Dirgham Muhammad believes that "the establishment of development funds or sovereign wealth funds is usually linked to the

existence of financial surpluses after covering the needs of the general budget."
He added to Al-Mada that "the situation might be different if the funds are in the form of grants rather than loans," explaining that "grants allocated to sovereign wealth funds are conditional on directing them towards investment and developing investment portfolios with guaranteed returns, and not using them to finance operating expenses."
Experts point out that the success of any development fund of this size hinges on the nature of its funding sources, legal guarantees, governance, and management mechanisms, as well as the state's ability to provide a stable investment environment that attracts and retains
capital. This comes at a time when Iraq faces challenges related to the budget deficit, fluctuating oil prices, and the need for structural

reforms in economic management.
These proposals are made as the government has announced that the development fund will be an investment vehicle independent of the general budget, relying on international contributions and guarantees aimed at achieving economic stability through investment. This will be done in conjunction with efforts to reform financial management and adopt a program-based budget in coordination with international bodies and local institutions.

A strategic move: ExxonMobil opens the door to massive investments in Iraqi oil.

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Baghdad/Al-Masalla Translation: ExxonMobil executives met with the new Iraqi Oil Minister, Basim Khudair.

The American giant had signed a preliminary agreement last year to develop the Majnoon field, which has a production capacity of 450,000 barrels per day, in addition to exploring the development of infrastructure for Iraq’s oil exports.

Since taking office last month, Khodair has called on American companies to resume trade talks that had begun under the previous government.

According to informed sources, the meeting took place in Baghdad on June 7, where the two sides discussed ways to expedite the implementation of the preliminary, non-binding agreement signed in October 2025 with the Basra Oil Company and the Iraqi State Oil Marketing Organization (SOMO). The agreement focuses on developing the giant Majnoon oil field, which holds estimated reserves of approximately 38 billion barrels, with the potential for a significant increase in production in subsequent phases.

The Majnoon oil field, one of the world's largest, is located in Basra Governorate in southern Iraq. The partnership aims to utilize cutting-edge technologies to improve recovery rates and reduce associated gas flaring, as well as upgrade export infrastructure including ports, pipelines, and storage facilities, and potentially explore joint marketing opportunities in Asian markets.

These talks come as part of a wave of major American companies returning to Iraq, such as Chevron, which is holding exclusive talks for the West Qurna 2 field, as part of the government's efforts to modernize the oil sector and offer more attractive investment terms.

The importance of strengthening cooperation for the Iraqi economy

Strengthening the partnership with ExxonMobil represents a vital strategic step for the Iraqi economy, which relies on oil for over 90% of its budget revenues. Iraq aims to increase its oil production to 6 million barrels per day by 2029, compared to approximately 4 million barrels currently, and the development of fields like Majnoon, through investments of billions of dollars, will contribute to achieving this goal.

This cooperation also helps modernize export infrastructure, reducing operational losses, increasing export capacity, and opening new markets. It brings advanced American technical expertise to improve production efficiency, develop associated gas for power generation, and reduce environmental emissions, thus supporting long-term economic diversification.

For its part, ExxonMobil sees Iraq as an opportunity to access large, inexpensive oil reserves, thus bolstering its global portfolio. Analysts emphasize that such agreements have both political and economic dimensions, as they strengthen Iraq's geopolitical balance and attract Western investments that contribute to stability and economic growth.

Negotiations are ongoing to transform the initial agreements into binding contracts, with a focus on ensuring mutually beneficial returns amidst security and administrative challenges. This cooperation is seen as part of a broader strategy to rebuild Iraq's energy sector and strengthen its position in the global market.