Iraq opens its "treasures" to investment despite the need for "reforms."
With the improvement of the security situation in Iraq in recent years, a more attractive investment environment has begun to take shape, driven by a decline in terrorist threats and the
restoration of stability in most provinces.
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Economic experts and officials believe this shift represents a real starting point for rebuilding confidence in the Iraqi market, particularly in vital sectors such as infrastructure, energy, minerals, and logistics.
While improved security is a key pillar for attracting capital, experts emphasize that security alone is not sufficient to achieve sustainable economic growth. Completing economic reforms, improving the business environment, distancing Iraq from regional tensions, and implementing governance and anti-corruption tools remain essential conditions for transforming positive indicators into real investment flows.
Stability builds confidence
The Prime Minister's financial advisor, Mazhar Mohammed Saleh, asserts that "security is one of the essential pillars of economic success," emphasizing that "talking about an attractive investment environment is impossible without genuine security and political stability."
Saleh explained to Shafaq News Agency that Iraq possesses natural resources and a strategic location, and with the significant security improvements achieved in recent years, it now provides a stable business environment that allows investors to plan for the long term and reduce the risks associated with project disruption or asset loss.
He added, "Reducing the rate of terrorist attacks in Iraq has helped boost the confidence of international financial institutions, encouraging many major foreign companies to return to the country, particularly in the energy and infrastructure sectors. This has also led to the launch of various investment projects across various governorates, reflecting improved coordination between security agencies and local governments."
Saleh believes that "investing in security is a direct investment in Iraq's future, and this is what the current government is embracing as part of its economic programs."
He also highlighted the importance of modernizing security agencies, strengthening the role of independent oversight bodies over investment projects, activating special economic zones, and improving the business environment by simplifying procedures and reducing bureaucracy through digital governance.
The advisor stresses the "need for international cooperation to provide additional security guarantees that will help reassure foreign investors and strengthen their presence in the Iraqi market."
$70 billion in investments
For his part, economic expert Safwan Qusay told Shafaq News Agency, "Iraq is witnessing a significant improvement in its investment climate, thanks to security stability and government reforms," noting that "the government has succeeded in attracting investments exceeding $70 billion over the past period."
Qusay explains, "The most significant challenge facing investors in the past was the lack of sovereign guarantees. However, the current government has provided guarantees covering 85% of the investment value, which has boosted the confidence of both local and foreign investors."
He continued, "Opening a window for investment in the minerals sector through the Ministry of Industry has contributed to the activation of major investment portfolios in areas such as cement, phosphate, sulfur, and silica, which are sectors that are considered a cornerstone for revitalizing local industry."
Qusay noted the increasingly positive outlook on Iraq's ability to integrate into the global economic system, "especially after the launch of the Development Road Project, which seeks to transform Iraq into a regional logistics hub for the export of locally produced goods."
He points out that "enforcing the rule of law at border crossings, halting dumping policies, combating corruption, and embracing technology are all measures the government has adopted to chart a clear path for investment in Iraq."
He explained that "the country is nearing completion of its security strategy, enabling the transition from the counterterrorism phase to the development-enhancing phase, with active citizen participation in consolidating the foundations of stability."
He added, "Important contracts have been concluded with major international companies such as Total, British Petroleum, General Electric, General Motors, and Siemens, reflecting the level of confidence in the investment climate, especially since these companies do not invest their money in unstable environments."
On another note, he points out that "the bilateral agreements signed by Al-Sudani's government with the European Union, China, and the Gulf states have helped reassure investors," emphasizing that "Iraq has become the focus of regional competition over available investment opportunities."
He also pointed to "monetary stability, a stable dinar exchange rate, and low inflation rates as additional factors that have contributed to strengthening the investment environment."
In addition, the housing sector is witnessing increased activity with the establishment of 15 new cities, and investors are turning to construction sector inputs such as iron, cement, and building materials.
Qusay asserts that "Iraq imports between $60 and $70 billion worth of goods annually, a significant portion of which could be produced locally, particularly in the agricultural and industrial sectors." He calls for "exploiting this gap to encourage local production and create real opportunities in smart agriculture, water management, and modern irrigation technologies."
He points to "the importance of developing the transportation and logistics sector," noting "the possibility of establishing a modern transportation fleet and storage centers that would contribute to transforming Iraq into a pivotal point in regional trade."
He believes that "the returns on investment in Iraq have become lucrative, competition for opportunities is increasing, and anyone who understands Iraq's economic importance will be keen to participate early before opportunities narrow."
Security alone is not enough
Economist Munar Al-Abidi believes that "the improved security has helped create an attractive environment for investment, particularly in sectors such as trade and tourism." However, he emphasized that security alone is not sufficient unless economic and structural reforms are completed.
Al-Obaidi told Shafaq News Agency, "Security enhances citizens' confidence and contributes to job creation, which indirectly supports the economic cycle." He pointed to the "urgent need to develop infrastructure and improve the business climate to ensure continued growth."
He points out that "foreign investors place great importance on a transparent and economically stable environment, which requires removing administrative and legislative obstacles that hinder the flow of capital."
Al-Abidi lists some indicators that point to the entry of new foreign investments, such as the increase in the volume of foreign direct investment ( FDI ), the increase in the number of registered foreign companies, the growth in capital transfers, and the increase in contracts with international investors in various sectors.
Tensions hinder investment
For his part, international economics professor Nawar Al-Saadi notes that "the improved security in Iraq has provided a more stable environment," but he adds that "this factor alone cannot transform Iraq into a major investment destination unless it is accompanied by radical economic reforms and genuine political stability."
Al-Saadi explained to Shafaq News Agency, "Foreign investments require a safe and stable environment, but they are also affected by the depth of reforms, the level of transparency, and the clarity of the market's future vision."
It is noteworthy that "Iraq has recorded growth in non-oil sectors such as communications, construction, and logistics, which are typically among the first sectors to respond to an influx of investment."
He pointed to the increase in trade and the number of foreign companies, but noted that "the volume of investments remains far below actual potential."
Al-Saadi points out that "the investment environment in Iraq remains closely tied to regional dynamics," explaining that "the conflict between Israel and Iran and the economic pressures exerted by the United States to limit Iranian influence, particularly through monitoring bank transfers and government contracts, negatively impact the decisions of major companies to invest in Iraq."
He concluded by saying, "Enhancing Iraq's attractiveness requires a combination of political stability, distancing the country from regional conflicts, and implementing comprehensive reforms," emphasizing that "this is the basic condition for motivating international investors to enter the Iraqi market on a sustainable basis."
Kurdistan Region oil exports await approval from international companies and Turkey
A senior official from Iraq’s State Organization for Marketing of Oil (SOMO) told Zoom News that the resumption of oil exports from the Kurdistan Region hinges on two critical steps: agreement from international oil companies and official confirmation from Turkey that it is ready to receive the oil.
The remarks follow an announcement on Wednesday by the Kurdistan Regional Government’s (KRG) Ministry of Natural Resources, which said it had reached an understanding with the Iraqi Ministry of Oil on the mechanics of restarting exports. The agreement were reportedly signed by 23 officials from both sides, including 17 from the federal Ministry of Oil delegation.
However, the SOMO official emphasized that representatives of oil firms operating in the Region were not present during the signing. “We still don’t know if they agree to pump oil into the pipeline or not,” the official said.
According to the source, the companies are pressing for an increase in the production cost per barrel and are unwilling to export oil at the currently stipulated $16 per barrel—a longstanding point of contention that has delayed the restart of exports, halted since March 2023. They are also seeking settlement of previous payments and assurances for future.
Even if the companies reach an agreement, the official noted, the second step involves Turkey. “Previously, Turkey expressed readiness to receive the oil, but it must officially inform Iraq and say, ‘We are ready to receive the oil,’” the SOMO source explained. “Then, we, as SOMO, will receive the oil and it will be pumped into the reservoirs at the port of Ceyhan.”
Exports through the Iraq-Turkey pipeline were suspended following an international arbitration court ruling in favor of Baghdad, which contested the KRG’s independent oil sales.
Kurdistan Democratic Party: Meeting expected on Sunday to decide on regional salaries
Karim told Al-Furat News, "So far, no financial payments have been made from the central or federal government to the Kurdistan Region to cover salaries." He noted that "a meeting is expected to be held next Sunday, during which reports will be submitted to the federal cabinet to decide on the matter, pending the release of salaries."
She added, "There is a new oil agreement stipulating that the region will not be restricted in terms of oil exports or production, provided that it delivers oil to SOMO, while maintaining domestic production of 50,000 barrels per day."
Karim continued, "The central government demanded half of internal revenues, such as traffic, taxes, and electricity, but the region rejected this and instead agreed to grant half of federal revenues, such as customs." He expected "this issue to be resolved soon."
10 Iraqi banks are under liquidation, and the Central Bank remains silent.
The Governor of the Central Bank of Iraq recently revealed that 10 Iraqi banks are facing liquidation due to their inability to fully provide services to customers. In addition, some banks are facing sanctions that prevent them from dealing in US dollars.
Despite the governor's announcement, the Central Bank has yet to publish an official list of these banks on its website, raising questions about why this information has not been disclosed to customers and relevant authorities.
An informed source confirmed that the number of banks subject to liquidation may increase in the coming days, given the ongoing financial pressures and operational difficulties facing some banking institutions.
This development comes at a time when the Central Bank is seeking to enhance financial stability and protect customer funds, but it faces significant challenges in enforcing transparency and accountability for struggling banks.
Analysts suggest that not announcing the names of the banks may be aimed at avoiding customer panic or speculation on deposits, but it also raises investor concerns and raises questions about the effectiveness of banking oversight in Iraq.
As these developments continue, citizens and customers await a detailed official statement from the Central Bank revealing the names of the affected banks and the measures taken to guarantee depositors' rights
Iraq shuts 10 banks in restructuring scheme
IN THIS ARTICLE
Aim to restore confidence
Deposits not returned
Iraqis keep money at home Iraq has ordered the liquidation of 10 of its banks as part of plans to restructure its financial sector after some failed to return funds to depositors, the governor of the Central Bank of Iraq (CBI) has revealed
Ali Al Allaq said the government is pushing ahead with the restructuring to restore confidence in the banking sector that has been jolted by large losses and corruption over the past few decades. In statements published by the local press on Tuesday, Al Allaq said Iraqis no longer trust banks as nearly 80 percent of their money is kept at home instead of local banks. “The reforms approved by the government in 2025 are intended to tackle imbalances and weaknesses in the banking sector. They also aim to upgrade banking services to international standards,” Al Allaq said. “Only around 10 percent of the banks have expressed reservations at the reform plan. There are also 10 banks under liquidation for their failure to return funds owned by depositors,” he added without naming those banks. The announcement comes ahead of Iraq’s next parliamentary election, scheduled for November 11, 2025.
The US management consulting company Oliver Wyman, which is involved in the plan to restructure Iraq’s banks, has asked CBI to force private banks to increase their capital through mergers or they will have to quit or shut down
An adviser to Iraq’s Prime Minister Mohammed Al Sudani said in June that EY is also carrying out a parallel study, which includes changing management of public banks and reducing the government’s share in the country’s largest public bank, Al Rafidain Bank, to 24 percent. Iraq has seven major government banks besides more than 50 national and foreign ones, including 27 Islamic banks, according to the central bank.
In mid January, the Iraqi cabinet announced plans for restructuring public banks, including the creation of a new giant bank.
The bank, to be called First Rafidain Bank, will have a paid-up capital of 500 billion Iraqi dinars ($382 million), to be raised later to one trillion dinars ($764 million), of which the government will control nearly a quarter of the capital. Rafidain Bank was established in 1941 and became a state-owned bank in the 1960s wave of nationalization by the ruling Baath Party. In 1988, Rafidain’s nonperforming assets were carved out into Rasheed Bank
US Institute: Iraq 2025 is not Iraq 2003, and Trump is invited to visit it
The American Middle East Forum Institute called on the US administration to avoid igniting a new war with Iraq, and instead suggested dispatching Steve Witkoff, President Donald Trump's special envoy, to visit Baghdad and view it from the perspective of 2025, rather than through the "outdated" lens of 2003.
The institute stated in its independently translated report that the Iraqi capital has witnessed radical transformations over the past two years, including active traffic through the former Green Zone, the opening of modern highways and bridges, and major construction projects overlooking the Tigris River. It noted that the US Embassy, once a prominent symbol on the riverbank, now appears "insignificant" next to the towering residential towers, while major hotel projects such as the Mövenpick and Rixos are nearing completion, preparing to receive hundreds of businessmen daily.
The report added that much of the investment financed in Iraq comes from Iraqi funds, despite Baghdad's efforts to attract international partners. It noted that nearly half of the country's population was born after the 2003 war, creating a new youthful energy that is pushing for change.
He noted that Iraq is also witnessing a generational shift in politics, with post-war leaders aging or in deteriorating health, while younger politicians such as Muqtada al-Sadr and Qais al-Khazali are trying to redefine their roles. He also noted that Iraqi armed factions, with limited exceptions, have refrained from engaging in the war between Iran and Israel, and that Shiite leaders have written to Iranian Supreme Leader Ali Khamenei to protest the Revolutionary Guard's interventions.
The report described the current climate in Baghdad as resembling Dubai in 1995, with business activity booming and politicians keen to protect this trend from any disruption. It considered Trump's policy of prioritizing business over military or diplomatic interventions to be consistent with sending Witkoff to Baghdad, but this has not yet happened, which the institute considered a "serious oversight."
The report also recalled that former President George Bush envisioned a democratic, economically prosperous Iraq, and that his miscalculation was in estimating the timeframe needed to achieve this. It urged Trump to realize that the absence of American companies from Iraq leaves the door open to competitors from Egypt, the UAE, Turkey, and China.
The institute concluded that investing in Iraq's thriving economy could be an effective tool to distance it from Iranian influence, arguing that "the greatest gift Trump could offer the marginalized Iraqi opposition as the elections approach would be economic, not military, action."
Al-Sudani is "superhuman" and "His Highness the Crown Prince" is worthy of him... Al-Sumaidaie's latest reflections
Iraqi analyst and politician Ibrahim al-Sumaidaie believes Prime Minister Mohammed Shia al-Sudani's performance during the current term is beyond anyone's capabilities, praising his achievements compared to his predecessors despite the difficult circumstances that accompanied his tenure.
Al-Sumaidaie said in a televised interview that Al-Sudani deserves a level of respect in speech on par with that accorded Gulf leaders, suggesting that he be addressed in a manner similar to how Saudis address Prince Mohammed bin Salman: "Mr. Crown Prince."
Al-Sumaidaie criticized what he described as the region's "distorted culture," which includes insults against the state, clerics, and dissenting politicians, emphasizing that Iraqi society needs to instill respect for the state and the law.
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New billionaires created in record time by artificial intelligence
The world of technology is witnessing an unprecedented boom thanks to artificial intelligence, comparable to the gold rush of the 19th century. Billionaire companies are being created at a record rate, and new names are rapidly appearing on the lists of the world's richest people.
According to data from CB Insights, there are approximately 500 AI startups that hold the status of "unicorns" (valued at more than $1 billion), including nearly 100 companies founded in the past two years alone. The combined value of these companies is approximately $2.7 trillion, while more than 1,300 others are valued at over $100 million.
MIT researcher Andrew McAfee told CNBC, "We haven't seen wealth creation at this speed and scale in over 100 years. It's unprecedented."
New billionaires in record time
Bloomberg reports that four of the largest private AI companies have created at least 15 billionaires with a combined fortune of $38 billion. Prominent examples include
Mira Murati, who founded Thinking Machines Lab and raised $2 billion in funding, valuing her company at $12 billion.
Anysphere, whose valuation jumped from $10 billion to between $18 and $20 billion in a matter of weeks, likely positioning its founder, Michael Trull, as a billionaire.
San Francisco… The epicenter of the boom
: The San Francisco Bay Area has become the epicenter of this wave, with the number of billionaires rising to 82, surpassing New York City's 66. The number of millionaires has also doubled over the past decade, and real estate sales of more than $20 million per home have reached record levels.
McAfee asserts that "Silicon Valley is still the beating heart of technology," despite repeated predictions of its end, noting that the region's geographic and knowledge concentration remains a crucial factor in maintaining this dominance.
Iraqi Fintech ‘Qi Card’, ‘Turkish Airlines’ launch Mastercard debit card
Qi Card, Iraq’s leading digital payments provider, and Turkish Airlines, one of the world’s largest airlines, has signed a landmark partnership in Istanbul to launch a new co-branded Mastercard debit card for Iraqis. Image courtesy: Qi Card
Qi Card aims to give them access to Qi Card’s trusted payment network, backed by 17 years of innovation and service excellence
Highlights
1. The debit card to reward 11 million Qi cardholders in Iraq
2. 20 million Turkish Airlines reward members to get access to Qi Card’s digital payment network
3. Convenient payment experience across Iraq and at millions of merchants and ATMs worldwide
4. Following Turkish Airlines partnership, Qi Card anticipates interest from airlines in the Middle East
(DUBAI / BAGHDAD)- Qi Card, Iraq’s leading digital payments provider, and Turkish Airlines, one of the world’s largest airlines, has signed a landmark partnership in Istanbul to launch a new co-branded Mastercard debit card for Iraqis.
The partnership will benefit 11 million Qi cardholders in Iraq by integrating their everyday spend to Turkish Airlines’ Miles&Smiles rewards programme. The new agreement will enrich their travel experience.
With 31 bank partnerships in more than 50 countries, Miles&Smiles programme continues to be part of over 20 million members’ lifestyles. Qi Card aims to give them access to Qi Card’s trusted payment network, backed by 17 years of innovation and service excellence.
Member Benefits
With the new debit card linked to the Qi Card payment system, Iraqi consumers will be able to earn Miles&Smiles rewards directly from their daily spending while enjoying a secure and convenient payment experience both across Iraq and at millions of merchants and ATMs worldwide.
The benefits include point-to-mile conversion at a fixed rate, use of miles across more than 353 destinations in 131 countries through Turkish Airlines and its Star Alliance partners. In addition, customers will avail privileged services such as access to business lounges, seat upgrades, fast-track services, and exclusive bonus mile offers.
Strategic Partnership
This strategic partnership combines Qi Card’s deep understanding and expertise of the Iraqi market. Turkish Airlines’ global aviation excellence will deliver an integrated solution that blends financial convenience with world-class travel benefits.
“This partnership reflects our shared vision of enriching everyday experiences through smarter financial tools and aspirational travel rewards,” said Bahaa Abdul Hadi, Chairman of International Smart Card (Qi Card), and added: “We are excited to offer Iraqis a globally accepted, loyalty-driven product that rewards them for how they spend.”
Miles&Smiles Qi Card Mastercard is designed to meet the lifestyle and travel choices of Iraqi consumers. The card is fully integrated with Qi Card’s nationwide infrastructure and mobile platform, and can be used globally wherever Mastercard is accepted.
“This co-branded card shows our commitment to the Iraqi market and strengthens our presence in the region by transforming everyday purchases into Miles&Smiles advantages that will pave the way for more memorable experiences for Iraqis,” said Ahmet Olmuştur, Chief Commercial Officer at Turkish Airlines.
The card will be available soon through Qi Card’s national distribution network, with onboarding and customer service support provided round the clock.
Middle East Expansion
Following its landmark partnership with Turkish Airlines, Qi Card anticipates strong interest from other airlines based in Iraq and in the Middle East seeking similar collaborations to expand horizons and give a better experience for Qi cardholders.
Development Plan 2024–2028: Iraq moves towards a productive economy with revenues exceeding 700 trillion dinars.
In one of the most significant economic transformations in recent years, the Iraqi government has begun implementing the National Development Plan for 2024–2028. The plan aims to transform the national economy by diversifying sources of income and reducing dependence on oil, while also addressing unemployment and boosting investment in vital sectors.
The plan, supported by a clear government vision and political will, includes profound structural reforms and precise performance indicators that are monitored periodically. This comes at a time when projected revenues are estimated at more than 710 trillion Iraqi dinars and investments exceeding 240 trillion dinars are required to achieve its goals.
While the Ministry of Planning emphasized the importance of capital allocation and investment in priority sectors, government agencies viewed the plan as a true economic lever, while economic experts considered it one of the most realistic and comprehensive plans for addressing Iraq's development challenges.
For his part, the Prime Minister's Advisor for Financial and Economic Affairs, Mazhar Mohammed Saleh, highlighted the importance of the five-year national development plan for the years 2024–2028.
Speaking to Al-Eqtisad News, Saleh emphasized that the five-year plan reflects a genuine national determination to achieve significant goals in economic progress and prosperity, noting that it relies on population census data to accurately and efficiently guide its implementation.
He added that the plan's fundamental objective is to implement profound structural reforms, transforming it from a mere written document into an economic lever capable of transforming the production and employment equation and transforming Iraq from a rentier economy to a productive and competitive one, provided it is managed efficiently as a comprehensive national mission.
The advisor pointed out that the success of the five-year plan requires a combination of institutional, financial, and executive components, most notably political will embodied in the government program, with direct support from senior leadership, which has worked to protect planning institutions from fluctuations.
He also stressed the importance of providing a binding legislative and regulatory framework to transform the plan into a law that defines objectives, resources, and responsible parties, in addition to ensuring sustainable and diversified funding consisting of oil revenues, private investments, and soft development loans.
Clear performance indicators and periodic monitoring
Saleh explained that the plan relies on precise governance and continuous monitoring based on key performance indicators (KPIs), which are reviewed semi-annually to ensure commitment and actual implementation of projects.
According to Al-Sudani's advisor, the most prominent targeted indicators include "annual GDP growth of no less than 5%, an unemployment rate of no more than 8% annually, an inflation rate of no more than 5%, and a petrochemical sector contribution of 5% to GDP."
He pointed to increasing oil production to 6 million barrels per day, utilizing associated gas by 90%, and increasing the contribution of non-oil sectors to more than 50% of national income. The plan also includes indicators related to the manufacturing, health, education, and infrastructure sectors.
Professional Management and Community Engagement
Saleh added that an important success factor is the formation of specialized implementation teams to manage projects according to international standards (PMI), without quotas or regional distribution. He emphasized the importance of civil society and private sector participation in formulating and implementing the plan, including chambers of commerce and industry and unions.
He concluded by stating that the five-year plan represents a fundamental pillar of sustainable development in Iraq, and requires concerted efforts and genuine national commitment to ensure its transformation into a tangible reality that is reflected in citizens' living standards and overall economic growth.
In addition, the Ministry of Planning announced that the total revenues expected to be achieved during the five-year development plan period (2024-2028) amount to approximately 710 trillion Iraqi dinars.
The ministry's official spokesperson, Abdul Zahra Al-Hindawi, told the official agency that the largest portion of these revenues will come from the oil sector, with oil revenues expected to reach approximately 631 trillion dinars, while non-oil revenues are estimated at approximately 79 trillion dinars.
Al-Hindawi added that the five-year plan estimated the volume of investments required to achieve the targeted economic growth rate of 4.24% during its implementation period at more than 241 trillion dinars.
Meanwhile, economic researcher Ali Daadoush asserted that the recently prepared five-year plan is one of the best studies to address the reality of the Iraqi economy, addressing key economic challenges and presenting future investment opportunities to advance the country's development.
In an interview with Al-Eqtisad News, Daadoush explained that the plan sets ambitious macroeconomic trends, most notably achieving a targeted growth rate of 5% to 6% on an annual average, in addition to targeting natural inflation, stabilizing the exchange rate, and reducing the general budget deficit.
He pointed out that the plan focused on productive sectors, particularly agriculture and food industries, by adopting modern irrigation systems and strategic crops with high water returns, and by establishing specialized logistics and manufacturing zones for dates, grains, poultry, and dairy products, with the aim of enhancing import substitution and increasing local added value.
According to Daadoush, the plan also addressed challenges in other sectors, such as the digital economy, payment systems, and financial sector reform, along with private sector development and increased employment opportunities. A "single window" approach was adopted to remove regulatory barriers (such as licenses, taxes, and industrial land allocation) within a period not exceeding 72 hours, in addition to linking technical education to the needs of priority sectors.
Regarding the components of the plan's success, the researcher stressed the importance of having clear governance and issuing a playbook for projects that includes the stages of selection, financing, implementation, monitoring, and evaluation, in addition to shifting from item budgets to program and performance budgets, so that each plan includes a program with performance indicators, a direct supervisor, a specific budget, and clear outputs.
Daadoush concluded his remarks by emphasizing the need to enact a law mandating the implementation of the national plan, in conjunction with the general budget and the government program. He considered this tripartite integration to be the cornerstone of sustainable development in Iraq.
The Ministry of Planning believes that the largest share of capital formation will be allocated to the oil sector, at 27.4%, followed by the housing ownership sector, at 22.5%, and then social development services, at 20.8%.
She pointed out that "the water and electricity sector will constitute 8.6% of the total planned capital formation, while the manufacturing sector's share will be approximately 7.8%."
Paralysis afflicts commercial sectors in Kurdistan. The salary crisis disrupts life.
Economic expert Farman Hussein confirmed, on Thursday (August 14, 2025), that there are groups of sectors suffering from complete paralysis in the Kurdistan Region.
Hussein told Baghdad Today, "Among these sectors are real estate, the car market, the gold market, the building materials market, and even the animal trade markets, the phone markets, and others."
He added, "All of these sectors are considered luxury sectors, not high on the priority list. In light of the financial crisis, citizens are able to secure their needs for food, drink, medicine, and basic necessities."
He pointed out that "tourists who visit the region's cities do not purchase real estate, gold, or phones. Rather, their purchases are limited to food, drinks, and gifts they take to their relatives, such as nuts and sweets."
He explained that "the paralysis affecting these sectors could lead to increased unemployment rates and the closure of hundreds of businesses if the salary problem is not addressed and paid on a monthly, regular basis for months on end."
Although the agreement between Baghdad and Erbil entered into force about three weeks ago, after the federal government began disbursing salaries to Kurdistan Region employees, who in turn deposited internal revenues into the public treasury, the stagnation is evident in local markets in the Kurdistan Region.
The Kurdistan Regional Government announced the deposit of a total of 120 billion dinars (approximately $92 million) from the region's internal revenues. The federal Ministry of Finance began disbursing salaries to public sector employees and workers in the Kurdistan Region for the month of May, following the regional government's commitment to hand over oil and non-oil revenues.
The Kurdistan Region also announced on Wednesday that it had reached an agreement with the federal government on the oil export mechanism, following lengthy negotiations between the two sides.
Iraqi state bank accused of processing payments for Houthi terrorists who disrupt Red Sea commerce
Iraq’s embassy flatly denies controversial bank is enabling terror finance
The Iraqi state-owned bank Rafidain faces accusations that it processed payments for the U.S.-designated Yemen-based Houthi terrorist movement at its branch in Yemen’s capital city, Sanna.
FOX Business obtained exclusive information from an Iraqi official about an April 29 meeting between Dr. Michael Faulkender, a deputy secretary of the U.S. Treasury, and Iraq’s foreign minister, Fuad Hussein, who also serves as deputy prime minister. Iraq’s ambassador to the U.S., Nazar Al Khirullah, was also at the meeting.
According to minutes of the April 29 meeting, which was held in Washington at the U.S. Treasury Department, Treasury officials warned Hussein that the Iraqi state-controlled bank Rafidain needs to stop conducting business with the Iranian regime-backed Houthi organization. The U.S. also asked that the Rafidain branch relocate to the Yemen city of Aden, where the internationally recognized government of Yemen resides. The Iranian-backed proxy Houthi movement has plunged Yemen into a civil war and caused one of this century’s worst humanitarian crises.
According to the minutes, Hussein said, "The Iraqi government deals with the internationally recognized Yemeni government, which maintains an embassy in Iraq. He emphasized that there is no possibility of the Houthis accessing the Iraqi financial system, and pledged to personally verify this matter."
The Houthi terrorists have disrupted commercial navigation in the Red Sea via their missile attacks on vessels. The financing of the Houthi movement has grave implications for international financial markets and shipping companies.
The U.S. military and the Israel Defense Forces have launched intense air strikes against Houthi installations in Yemen. The official slogan of the Houthi movement (Ansar Allah) reads, "Allah is Greater. Death to America. Death to Israel. Curse on the Jews. Victory to Islam."
A U.S. Treasury spokesperson told FOX Business, "While Treasury does not comment on specific allegations, we take any alleged sanctions violations extremely seriously."
A U.S. State Department spokesperson told FOX Business, "We do not comment on private diplomatic discussions. That said, no country should be processing payments to the Houthis. Several binding U.N. Security Council resolutions require member states to counter terrorism, including restricting financial and other support to terrorist organizations."
Dr. Sadeq Ali Hasan, a spokesman for Iraq’s embassy in Washington, D.C., sent a statement to FOX Business that said, "The allegations claiming that the Bank processes payments to the Houthis are categorically false. There are no correspondent banking relations with financial institutions in Yemen, and due to the prevailing political, security, and logistical conditions, it is operationally impossible to conduct cash or digital transactions in or out of the Yemeni financial sector."
According to the embassy statement, "The Sana’a Branch of Rafidain Bank has been fully non-operational since 2017. Following directives issued by the Bank’s General Administration, and in coordination with the Central Bank of Iraq, all financial activities in Yemen were permanently suspended."
The statement continued, "The branch does not maintain liquidity, has no access to SWIFT [Society for Worldwide Interbank Financial Telecommunication], and lacks functional infrastructure. It has not processed any domestic or international payments – particularly not to the Houthi group – since its closure."
When asked about the Iran-backed terrorist Popular Mobilization Forces (PMF) in Iraq, the Iraqi embassy said, "We confirm that Rafidain Bank no longer holds any PMF-related accounts. All such accounts and salary allocations have been officially transferred to Al-Nahrain Islamic Bank under the supervision of relevant Iraqi authorities. The Sana’a Branch, specifically, has no affiliation or activity involving the PMF."
Michael Knights, a senior fellow at the Washington Institute, who specializes in the military and security affairs of Iraq, told FOX Business, "Since February 2025 we have seen the U.S. Congress calling for the sanctioning of Rafidain Bank on the exact issue of facilitating large-scale transfers of money to Iran and its proxies. That puts Rafidain in the danger zone as an Iraqi bank that multiple U.S. congressional representatives know the name of." Congress has not imposed sanctions on Rafidain.
When asked about the Iraqi government’s statement, the Iraqi source, who is familiar with the April meeting, told FOX Business: "Rafidain is Iraq’s most opaque bank. It’s never been externally audited. The U.S. Treasury should act. It already requires all state banks in Iraq to conduct annual external audits, just as non-state banks are required. Rafidain must be held to the same standard. Audit it and publish the results."
The Iraqi official added, "Rafidain pays for PMF projects and issues unsecured loans to militia fighters. If it refuses transparency, and clear audit requirements, the U.S. must revoke its dollar access. No bank is too big to sanction. That’s the whole point – to deter abuse. Rafidain has gotten away with it for too long. It’s time for the new leadership at Treasury to do what Biden’s State Department wouldn’t."
Iraq’s financial system has been plagued by corruption and illegal oil smuggling that have aided Iran’s regime, according to reports in Reuters and the Wall Street Journal. According to the WSJ, the U.S. outlawed 14 Iraqi banks because the financial institutions were aiding Iran and additional sanctioned nations in the Middle East.
In May, Fox News Digital reported that House Republicans had urged Secretary of State Marco Rubio to punish Iraq with sanctions for its "complete subjugation" by Iran as part of the U.S.’s "maximum pressure" policy toward Tehran.
Rafidain, which had been previously blacklisted by the U.S government to punish Iraq’s former anti-American dictator Saddam Hussein, did not respond to a FOX Business press query. The United Nations imposed sanctions on Rafidain after the first Gulf War in 1991 because of concerns that Hussein could use it to receive money to buy weapons. The United Nations Security Council lifted sanctions on Rafidain in 2020.
The U.S. government lifted its restrictions on Rafidain after its occupation of Iraq in the early 2000s.
Red flags besiege the Iraqi economy in 2025: a larger deficit and less investment.
Reading by expert Manar Al-Abidi
The red color continues to rise in the Iraqi economic indicators for the first half of 2025, as revenue, expenditure, and investment items recorded negative figures compared to last year and the year before. Total public revenues during the past 6 months decreased by 6%, recording 62 trillion dinars, affected by a 3.4% decline in oil revenues, which coincided with a 14% decline in non-oil revenues compared to the first half of 2024. This was reviewed by economic expert Manar Al-Obaidi in a detailed statistic, which showed the inflation of public spending to levels that put significant pressure on the country's public finances, with the cost of covering public sector salaries rising by 40% compared to 2023, which was driven by the inflation of the employee wage bill and the welfare network by 6.5% and 6.7%, respectively. The most dangerous indicator among all the negative indicators was the share of investment spending, which collapsed by 33% to reach only 3.9 trillion dinars, as a direct result of the financial deficit resulting from the decline in revenues and the increase in expenditures. Operational over the past three years.
Iraqi Finance Ministry reveals figures for the first half of 2025: Decline in revenues and investment versus increase in current spending
The Ministry of Finance announced its data for the first half of 2025, which showed signs of a noticeable financial slowdown, with a decline in most revenue items and a decline in investment expenditures, offset by an increase in salaries and social welfare. Revenues Total
revenues
amounted to 62 trillion dinars, a 6% decrease compared to the first half of 2024.
Oil revenues: 56.7 trillion dinars, a decrease of 3.4%.
Non-oil revenues: 6.2 trillion dinars, a decrease of 14%.
Income and wealth taxes: A sharp decline of 46% to reach 740 billion dinars, after they were 1.4 trillion dinars in the first half of 2024.
Fee revenues: A 42% decline to 510 billion dinars, after they were 890 billion dinars in the first half of 2024.
Other revenues: A 40% decrease, from 2.55 trillion dinars to 1.52 trillion dinars.
Public sector share of the budget: jumped by 292%, from 220 billion to 850 billion Iraqi dinars.
Expenditures
Total expenditures: 56.69 trillion Iraqi dinars (-2.66%).
Current expenditures: +0.7%, reaching 52.75 trillion Iraqi dinars.
Salaries and wages: increased by 6.5% to reach 30 trillion Iraqi dinars, after they were 28 trillion Iraqi dinars in the first half of 2024 and 21.6 trillion Iraqi dinars in the first half of 2023.
This means that the value of salaries increased by 40% from 2023 to 2025, a significant increase that puts pressure on current expenditures and the general budget.
Social welfare: grew by 6.7% to reach 13 trillion Iraqi dinars.
Investment expenditures: decreased by 33% to reach 3.94 trillion Iraqi dinars.
Advances and Surplus Advances
: 4.22 trillion Iraqi dinars (-73%), down from 15.9 trillion Iraqi dinars in the same period last year.
Financial surplus: 5.3 trillion dinars, lower than last year's surplus of 7.67 trillion dinars.
These figures raise important questions about the budget's ability to balance current spending requirements with the importance of maintaining development investments, especially with the continued decline in non-oil revenues, which makes diversifying sources of income an urgent necessity.
Iraqis' money has evaporated in 10 banks. What's next and how did the Central Bank fail?
Analysis by Siham Youssef and Mustafa Hantoush
The story of the collapse of the Lebanese banking system began after a number of banks declared bankruptcy and were unable to return depositors’ money. This caused a wave of panic among the owners of deposits in other banks, and they rushed to withdraw their deposits simultaneously in a way that private banks were unable to confront. The rest of the story is well known, in an unlikely scenario that could be repeated in the same way in Iraq, where the Governor of the Central Bank of Iraq, Ali Al-Alaq, revealed that there are 10 banks on the “liquidation” lists that are also unable to return depositors’ money, without disclosing any other details. This could raise countless fears among Iraqis, and have unknown repercussions in the banking system itself. However, discussions are currently taking place between academics and banking experts, which have downplayed this “surprising” news, in addition to ruling out any major repercussions on the work of banks, which is what the financial and banking expert Mustafa Hantoush sees, explaining that our banking system is suffering from a lack of deposits originally, and as for the 10 banks that are subject to liquidation It has been listed since 2023, not now, which confirms that the priority now is how to reform the banks banned from transferring dollars, and the possibility of applying the standards imposed by the American company “Oliver Wyman.” Meanwhile, economic expert Suham Youssef points to a bigger problem, which is the lack of oversight by the Central Bank of private banks during the past years, as it is the “supreme guardian” and is primarily responsible for implementing standards for measuring banks’ liquidity and capital. She wonders about the reasons for the Iraqi Central Bank’s negligence and its failure to launch “early warning” tools before the banking system reached what it has reached with the announcement of the liquidation of some of its entities and the tightening of international measures on others!
Mustafa Hantoush, a financial and banking expert:
There are 70 private banks in the Iraqi banking system, most of which are good banks with no money laundering sanctions, except for restrictions on dollar transfers. This is something the Central Bank is seeking to address with the help of Oliver Wyman. The instructions include raising capital to 400 billion dinars, with each bank paying a fee of $2.4 million to escape the dollar transfer restrictions within four years, merging with each bank paying $1.3 million, or liquidating. These are the options available to Oliver Wyman.
The Central Bank is expected to seek to consolidate the banks with Oliver Wyman, as most of these banks are unable to raise capital to the required level given the low profits. Therefore, the likely scenario is for the Central Bank to act as an intermediary and activate a negotiation mechanism between these parties to protect the Iraqi banking system.
Since 2003, there has been a list published on the Central Bank's website listing a number of banks subject to liquidation. This is nothing new, and the banking system has a capitalization of over $10 billion, but it suffers from a lack of deposits, so there's no fear of depositor problems. These banks have been experiencing problems since 2003, not just today. We're now looking forward to the stage of solutions and the return of competition to the banking system.
Suham Youssef's blog post:
The Central Bank: 10 banks "under liquidation" unable to return citizens' deposits
Ten banks unable to return citizens' deposits... The news is not just numbers; it is a manual alarm bell at the heart of the Iraqi banking system.
When banks reach the stage of liquidation because they are no longer able to return their depositors' money, this not only indicates the failure of those banks' management, but also reveals the absence or weakness of early oversight, which should have intervened before that moment.
In all systems around the world, the central bank is the highest guardian at the doors of banks, and its eye must precede the hands of depositors and managers. It is the one that monitors banks' balance sheets, tests their ability to return deposits, and sounds the alarm before a failure turns into a collapse.
The Central Bank and regulatory authorities have early warning systems to measure liquidity, capital, and
asset quality. If these tools exist and are not used, the problem lies with management. If they are absent or malfunctioning, the problem is deeper and more dangerous.
Banking crises do not occur suddenly; It builds silently over years, through poor governance, speculation, and a lack of serious scrutiny, until it explodes in front of depositors who find themselves facing a closed window.
Confidence in the financial system is not built through advertising, but through strict accountability and oversight. Depositors don't care about public relations statements; they care about finding their money when they need it.
Washington intends to withdraw hundreds of troops from Ain al-Asad base
Al-Araby Al-Jadeed learned from Iraqi political and government sources that the US administration has notified the government of Prime Minister Mohammed Shia al-Sudani of the imminent withdrawal of hundreds of US soldiers and military personnel from the Ain al-Assad base in Anbar province, western Iraq. The withdrawal is related to the Iraqi-US agreement, which stipulates the gradual withdrawal of US forces operating under the cover of the international coalition fighting ISIS since 2014. However, other sources spoke of US "displeasure" with the Iraqi government's failure to adhere to understandings and agreements with the US administration.
According to the sources, "a senior Iraqi government advisor recently visited Washington and met with American officials, who informed him that the Iraqi government had failed to fulfill its commitments to restricting the militias' weapons and preventing their empowerment, in addition to its inability to end its reliance on Iranian gas and prevent missile attacks on areas of the Kurdistan Region, not to mention its failure to free the kidnapped Russian-Israeli, Elizabeth Tsurkov."
Sources: Washington believes that Al-Sudani's actions toward armed factions are insufficient
The sources added that "American officials informed the Iraqi advisor that the prime minister must withdraw the Popular Mobilization Forces bill from parliament, but the advisor informed them that this would be difficult because the bill had already been read twice, and there was no longer a possibility of withdrawing it from parliament." The sources explained that "the Washington administration believes that al-Sudani's measures against the armed factions are insufficient."
The sources pointed out that "the decision to withdraw a portion of US forces comes in contravention of the previously agreed-upon timetable between Baghdad and Washington for a gradual withdrawal, which was supposed to take place after the parliamentary elections scheduled for November, meaning it is an emotional response from the US administration." They expect the withdrawal from Ain al-Asad base to begin next month.
Ain al-Assad base was attacked
Ain al-Asad Air Base, which houses the largest number of US forces in Iraq, has been subjected to numerous missile attacks over the years. These attacks increased following Operation Protective Edge, part of Iraq's response to the massacres committed by the Israeli occupation against civilians in the Gaza Strip since October 7, 2023. Ain al-Asad Air Base is located 200 kilometers west of Baghdad, near the Euphrates River in the town of al-Baghdadi, west of Anbar Governorate, and is considered the largest US base in Iraq.
Ain al-Asad Air Base currently houses hundreds of American soldiers and military personnel. Along with American forces, the base is shared with the Iraqi Army's 7th Division, part of the Badia and Al-Jazeera Operations Command, which is responsible for Iraq's borders with Jordan and Syria, and parts of the border with Saudi Arabia.
America is not satisfied with Al-Sudani's performance.
In this context, a member of the Iraqi parliament told Al-Araby Al-Jadeed, "The United States is not satisfied with the performance of the Iraqi prime minister, and is exerting real pressure from all sides. Therefore, there must be real support for this government and prevent the continuation of American interference ." He added to Al-Araby Al-Jadeed, "The decision to withdraw American forces is expected, and may come within the framework of the security threat that may precede any expected Israeli operations in the coming period. We do not currently know whether the forces will withdraw towards the Harir or Al-Tanf bases, or perhaps to bases in the Gulf, but these hints are nothing but tools to pressure the current government."
Iraqi MP: The United States is dissatisfied with the Prime Minister's performance.
However, security expert Ahmed Al-Sharifi pointed out, in an interview with Al-Araby Al-Jadeed, that "the American and foreign forces present at the Ain al-Assad base are considered mobile forces, meaning they are not fixed and are constantly moving between three bases: Al-Tanf and Al-Omar in Syria, and Ain al-Assad in Iraq. Each of these bases is linked to the others, which means that the possibility of the withdrawal of American forces from the Ain al-Assad base may be linked to the movement or perhaps a final withdrawal."
Baghdad and Washington had agreed, at the end of last September, to an official date for the end of the international coalition's mission against ISIS in the country, no later than the end of September 2025. This date was reached after months of dialogue between the two sides. This came in the wake of escalating demands from armed factions and Iraqi forces allied with Iran to end its presence, particularly after the US strikes at the time on the headquarters of those factions in response to their attacks on coalition bases inside and outside the country, against the backdrop of the Gaza war.
CBI, IFC consider New Leasing Company for Iraqi Start-Ups
Central Bank of Iraq (CBI) Governor Ali Mohsen Al-Alaq has met Bilal Al-Saghir, the International Finance Corporation's (IFC) Resident Representative in Iraq, to discuss strengthening bilateral relations, particularly in training Iraq's banking sector workforce. The parties intend to sign a Memorandum of Understanding on the matter in the coming period.
They also discussed a proposal to establish a leasing finance company with both local and foreign participation, aimed at supporting startups and small- to medium-sized enterprises by offering flexible financing for assets such as industrial equipment, vehicles, offices, and warehouses.
The meeting further addressed the CBI's ongoing banking reform plan, implemented with assistance from Oliver Wyman and in line with international standards, to enhance the sector's global standing and restore several Iraqi banks' ability to engage in international transactions.
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