Thursday, September 11, 2025

Dinar Watchers Take Note: Dollar Rises Above 1,430 in Iraq

Preference for the parallel market is behind the rise in the dollar price.

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US currency/Bland Taher-Rudaw

 
Mazhar Mohammed Salih, advisor to the Iraqi Prime Minister for Financial and Economic Affairs, attributed the rise in the dollar exchange rate in local markets to the preference of "speculators and cross-border traders" to obtain the US currency from the parallel market whenever its exchange rate declines.
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In a statement to Rudaw Media Network, on Thursday (September 11, 2025), he said, "The speculative and cross-border commercial environment balances its risks between the decline in the dollar exchange rate, the ease of parallel financing for fast trade, and its low administrative and regulatory costs, especially compliance and anti-money laundering procedures."
 
He added that this commercial environment "compares violations of the law against risks and whichever is quicker to generate profit, especially in small-scale border trade," explaining, "As the dollar declines, parallel market financing becomes more preferable to entering the official customs system and tax mechanisms."
 
The dollar exchange rate has risen in Iraqi markets these days, exceeding 1,430 dinars.
 
Al-Sudani's advisor explained that small business activity "dominates more than half of the country's foreign trade today."
 
He added that the equation tends to derive funding from the "illegal or parallel secondary market," and that banks are in a "preferential position" when the dollar exchange rate declines compared to audit costs and the cost of banking and customs compliance, "unless deterrent legal enforcement is tightened."
 
He added, "Therefore, there is no reason for this renewed rush on the dollar," noting that it is regularly available through the official banking system.
 

Al-Sudani's advisor emphasized that resolving this issue requires "increased high-level monitoring of informal imports subject to the Anti-Money Laundering Law and extensive and effective customs control, extensive governance of border crossings, and blocking the financing of informal trade."



American organization: Al-Sudani has an opportunity to reduce Iranian influence and improve relations with Washington

 

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The American organization Defending Democracy announced in a report published today, Thursday (September 11, 2025), that Prime Minister Mohammed Shia al-Sudani has an "opportunity" to reduce Iranian influence in Iraq and restore relations with the United States to normal.

The organization said, according to what was translated by "Baghdad Today," that after Al-Sudani announced the formation of a committee to investigate the smuggling of Iranian oil through mixing it with Iraqi oil, he is now obligated to "investigate in a fair and impartial manner, announce the results, and take urgent measures to prevent smuggling based on them." The organization stressed that "the investigative committees previously formed by the Iraqi government regarding Iranian activities did not announce realistic results," describing those committees as "toothless."

The organization called on the US government to "officially inform al-Sudani" that the established investigative committee represents an "opportunity" to end "Iran's illegal activities in Iraq" and restore relations between the two countries to normal after their recent volatility. The organization emphasized that it is in the United States' interest to end Iran's "sanctions evasion" through Iraq.

The organization noted that "Iran has managed to 'invent' routes to smuggle oil through Iraq using 'Iraqi businesses and companies, Iranian-backed armed militias, and even Iraqi government officials,' generating approximately $3 billion in annual revenues, making the work of the committee formed by al-Sudani 'sensitive.'"

The organization described the current US policy as treating the Iraqi government as "part of the maximum pressure policy on Iran," emphasizing the need for "the Sudanese government to seize this opportunity to reduce Iranian influence and improve its relationship with the United States, and not repeat history by forming investigative committees that fail to reach results or hold officials accountable."

It's worth noting that "the US government announced last March the imposition of sanctions on Iraqi figures accused of working to smuggle Iranian oil using official Iraqi documents, which led to "accusations against Iraqi officials of complicity in issuing these official documents," according to the statement.



Iraqi Banks Association: The reform plan has reached its final form and will include all private banks.

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he Iraqi Private Banks Association confirmed on Thursday that banking reform in Iraq includes both the public and private sectors, while indicating that the reform plan has reached its final form and will include all private banks without exception. The Executive Director of the Iraqi Private Banks Association, Ali Tariq, told the official agency that “the banking reform in Iraq consists of two parts, the first for government banks and the other for private banks.” He explained that “the reform for private banks consists of standards divided into four axes: the first is governance, capital and ownership structure, the second axis is the business plan and the products offered by banks and how to spread their branches, ATMs and all financial and banking services.”

He added, "The third axis relates to developing procedures, particularly with regard to anti-money laundering, compliance, and risk management. The fourth axis concerns financial statements, which include financial statements and multiple ratios that the bank must adhere to in the future. Therefore, the issue of capital, ownership structure, and governance is part of a broader reform plan."

He also stated that "during the previous period, there were serious comments from the banks, which were conveyed to the Central Bank of Iraq and a dialogue was opened."

He continued, "We are now in the final stage of formulating the plan, which will include all banks, not just those deprived of dollars or specific banks, but all private sector banks." He noted that "this plan is not just to fix a defect, but rather to set standards that the bank must adhere to to ensure it is above the norm and continues to operate normally."

 

The Islamic Banks Association affirms its full support for the banking reform plan.

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The Islamic Banks Association affirms its full support for the banking reform plan.


The Iraqi Islamic Banks Association (IIBA) affirmed its full support for the banking reform plan on Thursday.
In a statement received by the Iraqi News Agency (INA), the association stated that "the IBA affirms its full support for the comprehensive banking reform plan launched by the government in cooperation with the Central Bank of Iraq," explaining, "We firmly believe that this plan represents a pivotal and necessary step to enhance the stability of the banking sector in the country and ensure its sustainable growth, serving the higher interests of the national economy."
It added, "This reform initiative aims to enhance transparency, combat financial corruption, and modernize the legal and regulatory frameworks to align with international best practices."
It stressed that "Islamic banks oblige members of the association to provide a sustainable and ethical financial model," stressing that it is "fully prepared to work side by side with the Central Bank of Iraq and relevant authorities to achieve the objectives of this reform plan."
The association continued, "We will continue our effective contribution by promoting financial inclusion, supporting economic development, and fully adhering to the instructions and regulations issued by the Central Bank, which will strengthen financial governance and oversight. We are confident that these joint efforts will pave the way for a prosperous and stable financial future."


Rafidain Bank supports nearly 2,000 projects worth 24 billion dinars.

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Rafidain Bank announced the allocation of the 11th installment of the "Leadership and Excellence" initiative, noting that the projects funded by the initiative have reached 1,804.
The bank stated in a statement, seen by Al-Masry, that the initiative (Leadership and Excellence) included the 69th batch of registrations, with a total amount of one billion dinars, within the framework of initiatives supported by the Central Bank of Iraq.
The statement added, "The total number of projects funded under the initiative reached 1,804, with a total value of 23 billion, 941 million Iraqi dinars, reflecting the bank's commitment to supporting pioneering projects and contributing to the development of the national economy."

 


Customs: Committees formed to link Kurdistan's ports to the ASYCUDA system. What are the implications of this move?

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The General Authority of Customs revealed the formation of joint committees to connect the Kurdistan Region's ports to the ASYCUDA system. An economic expert predicted that the move would contribute to raising annual customs revenues to more than $8 billion.

 

Director General of the Authority, Thamer Qasim Dawood, stated in the Official Gazette today, Thursday, September 11, 2025, that "joint committees have been formed to connect the region's ports to the ASYCUDA system," adding that "there has been no response yet."

 

He added, "Customs offices have been opened at the checkpoints of Al-Sadd, Darman, Jemen, and Bawe Mahmoud to inspect goods entering the central and southern governorates, as a temporary solution until the connection with all ports is completed."

 

For his part, economic expert Dr. Abdul Rahman Al-Mashhadani predicted that "customs revenues will double to $8.5 billion annually after the system is implemented." He noted that "the region's problem lies in its failure to adhere to customs tariffs and its failure to disclose actual revenues, which forces the majority of goods coming from Iran and Turkey to pass through its ports."

 

He said, "The federal border crossings will adopt alternative points such as Al-Safra if the region continues to refuse, especially given the presence of 22 unofficial crossings controlled by various parties and entities, in addition to the Bashmakh crossing, which is the largest and most important." 

 

In this context, Al-Mashhadani noted that "the inspection points in Kirkuk and Mosul have already begun operating based on ASYCUDA data, with proposals to open secondary and mobile checkpoints to enhance oversight." He emphasized that "implementing the system will more than double revenues compared to the current situation."


Al-Hamami accuses the government of deliberately delaying the submission of budget schedules.

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MP Aref Al-Hamami accused the federal government on Thursday of deliberately delaying the submission of the general budget schedules, warning of the repercussions of this measure on the work of ministries.
Al-Hamami explained in a statement to Al-Maalouma that “the delay in submitting the budget schedules led to a relative paralysis in the work of ministries and created a state of ambiguity in the management of public funds, which disrupts projects and hinders the provision of basic services to citizens.”
He pointed out that "such delays reflect weak coordination between state institutions and affect the stability of financial performance, which requires urgent intervention to address it."
The German newspaper Schwäbisch reported that the delay in submitting the budget leads to the disruption of the implementation of investment and service projects and increases the difficulty of managing financial resources effectively, which places additional pressure on ministries and government agencies.

 

The absence of budget schedules deprives the central and southern governorates of services.

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Deputy Chairman of the Parliamentary Investment Committee, Hussein Ali Reda, held the government responsible on Thursday for halting most service projects and depriving the central and southern governorates due to the failure to send the 2025 budget schedules, noting that the failure to implement last year’s budget contributed to the decline in basic services.
Reda told Al-Maalouma Agency, “The government’s move to allocate 2024 budget funds to the capital at the expense of the rest of the governorates led to the deprivation of other governorates of basic services and prompted them to demonstrate to demand their rights.”
He added that "spending rates in the 2024 budget did not exceed 25% in most governorates, specifically the central and southern governorates," noting that "the governments bear responsibility for not sending the 2025 budget schedules to Parliament on time."
He stressed that "many service projects have been halted due to the lack of sufficient financial allocations, despite the approval of the three-year budget."


Koger: The three-year budget is a disaster that turned the planned deficit into a real one.

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P Jamal Koujar described the three-year budget on Thursday as a “real disaster” for public finances, stressing that it has transformed the planned deficit in the 2023 and 2024 budgets into an actual deficit that has burdened the state.

In a statement to Al-Maalouma, Kocher said, “The approval of the three-year budget resulted in the planned deficit in the 2023 budget, amounting to 64 trillion dinars, being transformed into an actual deficit after the 2023 and 2024 budgets were fully spent.” He indicated that “the third budget may not be fully spent due to the end of its financial cycle.”

He added, "The 2024 budget incurred additional losses after spending 11 trillion dinars on completed projects from the 2023 budget, leading to a significant shortfall in its resources," noting that "the accumulating deficit weakens the government's ability to implement new projects and directly impacts the economic and service situation."

It is noteworthy that the financial deficit represents the most prominent challenge facing the government, in light of the fluctuation in oil prices and the budget's almost complete dependence on oil revenues.


Iraq's Oil Minister Meets World Bank Director

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Deputy Prime Minister for Energy Affairs and Minister of Oil, Hayan Abdul Ghani Al-Sawad, has met with the World Bank's Director on the sidelines of the Gastech exhibition and conference.

The discussions covered issues related to oil and the wider economy.

The meeting was also attended by Deputy Minister for Gas Affairs, Izzat Saber Ismail, and the Ministry's Energy Adviser, Abdulbaqi Khalaf.


Iraq seeks to extend a new oil pipeline across the Gulf.

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The Director General of the State Oil Marketing Organization (SOMO), Ali Nizar, confirmed on Thursday that Iraq intends to extend a new oil pipeline across the Gulf to the Sultanate of Oman to boost its crude oil exports.

Nizar said, "There is discussion and preliminary agreement between Iraq and the Sultanate of Oman on extending the crude oil pipeline and marketing the oil in global markets," indicating that "the first phase of the agreement stipulates the construction of oil tanks with a capacity of 10 million barrels in the Omani port of Duqm," noting that "the storage capacity can be increased in the coming years."

He added, "After the completion of the construction of the tanks, we will begin the second phase of transporting Iraqi crude oil by tanker until the pipeline is completed from Iraq to the Sultanate of Oman."

He explained, "There are discussions between Iraq and Oman to determine the pipeline's route. According to the feasibility study, if the pipeline is extended overland, it will require agreements with the countries through which it will pass. If it passes by sea, it will be across the Arabian Gulf, extending from the port of Basra to the Omani port."

On September 3, the Iraqi government signed two agreements and 24 memoranda of understanding in various fields with the Sultanate of Oman. This came during Iraqi Prime Minister Mohammed Shia al-Sudani's visit to Muscat and his meeting with Sultan Haitham bin Tariq Al Said of Oman.



Al-Sudani: The realities of reconstruction on the ground are hurting them and revealing their bankruptcy.

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Iraqi Prime Minister Mohammed Shia al-Sudani called on Thursday for confronting those who sow "discord and hatred" in the country, stressing the need to promote values of security and stability.

In his speech at the central ceremony commemorating the Prophet's birthday, held by the Sunni Endowment in Baghdad, Al-Sudani said, "Celebrating the birth of the Great Prophet is an opportunity to revive moral values and adherence to his teachings in public life."

Al-Sudani pointed out that preserving the trust is the first responsibility of any official, citing the Prophet Muhammad (PBUH), emphasizing that trust requires strengthening the state and its institutions to guarantee citizens' rights and implement the law without bias or favoritism.

He added, "The government is committed to pursuing the people's best interests in the face of crises and challenges," calling for distancing itself from the makers and merchants of discord who exploit citizens' suffering and attempt to sow chaos and undermine social peace.

He warned against sowing hatred and misinformation, stressing that the people's decision and the facts of development and reconstruction expose the bankruptcy of those who seek to harm society.























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US House of Representatives Ends War Authorizations for Iraq and the Gulf

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The US House of Representatives passed the National Defense Authorization Act, which sets military policies and provides funding for the military, after a key amendment repealing the war authorizations for Iraq and the Gulf, in a vote that sparked widespread controversy between Democrats and Republicans.

The vote was 231 to 196, with four Republicans opposed and 17 Democrats joining the Republicans in favor of the legislation. The amendment includes repealing the 2002 Iraq War Authorization and the 1991 Gulf War Authorization, while also including measures that make it more difficult for presidents to circumvent Congress to make military decisions.

 

The House of Representatives voted 261-167 to repeal these authorizations, with the support of all Democrats and 49 Republicans, representing about one-fifth of the GOP. The use of these authorizations by US presidents has been criticized in the past, as they grant them the authority to launch military operations without a formal declaration of war.

These authorizations have been used on several occasions, most notably the January 2020 US airstrike that killed Iranian Quds Force commander Qassem Soleimani. Former President Donald Trump relied on the 2002 authorization to justify the operation in Iraq.

Analysts point out that this decision comes after a dispute within the Republican Party, as three members of the Freedom Caucus voted in favor of an amendment introduced by Democratic Representative Jim McGovern to allow it to be brought to a vote, reflecting divisions within the party over issues of military force and presidential powers.

A bill to repeal the 2002 authorization passed the House of Representatives in 2021 and was approved by the Senate in 2023, repealing both the 2002 and 1991 authorizations. This comes as part of the $892.6 billion National Defense Authorization Act, which contains other controversial amendments, including restrictions on the Department of Defense's coverage of gender-affirming health care.

This time, there are broader disagreements over the nature of the amendments included in the legislation, after senior Democrats threatened to oppose the law if Republicans insisted on including controversial amendments, which would have forced the GOP to pass the bill without Democratic support.

 

Iraq hails US House vote to repeal Iraq war powers

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Iraqi flag. Graphic: Rudaw

 Iraq on Thursday welcomed a vote by the US House of Representatives to repeal the legal justifications for the 1991 Gulf War and the 2003 invasion, describing the move as an important step toward strengthening Iraqi sovereignty and reshaping relations with Washington.

The House voted 261 to 167 on Wednesday to revoke the Authorizations for Use of Military Force (AUMFs) that allowed US presidents to attack Iraq in 1991 and 2003. The measure now heads to the Senate for consideration. If approved, it would require the president’s signature to become law. In the event of a presidential veto, Congress could override it with a two-thirds majority in both chambers.

“We welcome the US House of Representatives’ vote to repeal the Authorizations for Use of Military Force (AUMF) of 1991 and 2002,” the Iraqi Embassy in Washington said in a post on X, adding that the decision “strengthens the principle of sovereignty and opens a new chapter in Iraq–US relations based on mutual respect and shared interests.”

“We look forward to its approval soon by the U.S. Senate,” the embassy added.

The 1991 AUMF authorized then-President George H. W. Bush to use force in Iraq following Saddam Hussein’s invasion of Kuwait. The 2002 AUMF, passed under George W. Bush, became the legal basis for the invasion of Iraq and was later used to justify military operations after Saddam’s fall. Critics have argued for years that leaving the laws in place gives presidents a blank check to continue military interventions.

Repealing the measures has been a long-standing demand from Baghdad. Iraqi officials say the authorizations undermine their sovereignty.

The Senate passed a similar repeal in 2023 with support from 48 Democrats and 18 Republicans, but the effort stalled in the House.

The House vote comes as the two countries negotiate the future of the US-led coalition against the Islamic State (ISIS), and Baghdad faces pressure from Iran-backed groups to demand a complete American withdrawal.

 

 

The Iraqi Embassy in Washington comments on the decision to revoke the Iraq War authorizations: a significant milestone in the development of relations between the two countries.

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The Iraqi Embassy in Washington described, on Thursday, the US House of Representatives' decision to repeal the 1991 and 2002 war authorizations as an "important milestone" in the development of relations between the two countries.
The embassy said in a statement that "the US House of Representatives approved the repeal of the 1991 and 2002 Iraq war authorizations.
" The embassy added that "the decision to repeal the Iraq war authorizations is an important milestone in the development of our relations with the United States."

The US House of Representatives voted by a majority to repeal the authorizations for the use of military force related to Iraq, as part of the "National Defense Authorization Act" bill that sets Washington's military policies.


Iraq’s Al-Maliki, US Envoy discuss security and political issues

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Iraq’s Al-Maliki, US Envoy discuss security and political issues

Nouri al-Maliki, head of the State of Law Coalition (allied with Iran), met on Thursday with Joshua Harris, the chargé d’affaires at the US Embassy in Iraq, to discuss political and security issues inside the country and abroad.

The meeting was held at al-Maliki’s office in Baghdad, marking the start of Harris’s diplomatic mission in Iraq.

According to a statement from al-Maliki’s office, the two sides explored ways to bolster bilateral relations and advance cooperation that serves the interests of both nations. They also reaffirmed their commitment to ongoing efforts aimed at ensuring regional stability.

Al-Maliki underscored Iraq’s readiness to build cooperative, partnership-based ties with all countries, including the United States, based on “mutual respect and shared interests.”

He emphasized the need to hold legislative elections, describing them as essential to “placing the political process on the right track and fulfilling the demands of the Iraqi people.”

For his part, Harris voiced hope for strengthening cooperation between Baghdad and Washington in a way that “supports security and stability in Iraq and the wider region.”


Doha hosts an emergency Arab-Islamic summit to discuss the Zionist attack on Qatar.

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 The Qatari Ministry of Foreign Affairs announced that its country will host the preparatory meeting of foreign ministers for the emergency Arab-Islamic summit next Sunday, to discuss the Zionist attack.

The ministry said in a statement: "The State of Qatar will host the preparatory meeting of foreign ministers for the emergency Arab-Islamic summit next Sunday, followed by the emergency Arab-Islamic summit to discuss the Zionist attack on the State of Qatar, during the period from September 14-15 in the capital, Doha.



Discover Iraq: Baghdad, a city shaped by conflict and enduring hope

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Discover Iraq: Baghdad, a city shaped by conflict and enduring hope

Baghdad, the capital of Iraq and long a cradle of civilization, stands as both a witness to history and a survivor of its storms. Founded in 762 CE during the height of the Abbasid Caliphate, the city once symbolized a golden age of knowledge, culture, and power.

Today, scarred by decades of conflict, political upheaval, and economic hardship, Baghdad remains Iraq’s political, cultural, and intellectual heart, where ancient legacy and modern struggle exist side by side.

The People of Baghdad

Baghdad’s demographic landscape reflects centuries of migration, settlement, and transformation. Once the historic center of Islamic scholarship, the city remains Iraq’s most populous urban area, with an estimated 8.5 million residents.

Arabs constitute the majority, but sectarian identity continues to influence the capital’s social structure. According to the Iraqi Ministry of Planning’s 2024 estimates, 80 to 82 percent of Baghdad’s residents are Shiite Muslims, while Sunnis account for approximately 17 to 19 percent. This distribution is reflected geographically: districts such as Al-Sadr City, Al-Kadhimiya, and Al-Hurriya are predominantly Shiite, while areas like Al-Adhamiyah, Al-Dora, and parts of Al-Ghazaliya are largely Sunni.

Sectarian divisions intensified after the 2003 US-led invasion. The ensuing conflict triggered widespread displacement and redrew the city’s demographic boundaries. Urban sociologist Dr. Leila Hassan described the shift as rapid and transformative. “Entire districts shifted demographically in a matter of months. The city's social fabric was ripped apart and re-stitched along sharper lines of identity,” she stated. Between 2006 and 2008, the International Organization for Migration recorded more than 1.5 million internally displaced people, many of them fleeing sectarian violence within Baghdad.

Ethnic diversity remains a prominent feature of the capital. Kurdish communities are well-established in neighbourhoods such as New Baghdad and Karrada. Many Kurdish families settled in the city during the Ba’athist period, drawn by educational and economic opportunities or seeking refuge from unrest in northern Iraq. Turkmen—mostly Shiite with a smaller Sunni presence—reside across several areas of Baghdad, maintaining cultural continuity through family networks and local organizations.

Christian populations, including Chaldeans, Assyrians, Syriacs, and Armenians, once played a significant role in Baghdad’s social fabric. Communities flourished in districts like Karrada and Mansour, but decades of instability have led to a steep decline. From over 50,000 in the late 1990s, Baghdad’s Christian population has fallen to fewer than 10,000, largely due to targeted violence and waves of emigration. The Armenian community, once centered in Camp Sarah, has also seen a reduction in numbers, although churches and cultural institutions remain active.

Other religious minorities, though diminished in size, continue to exist within the capital. The Sabeans-Mandeans—an ancient Gnostic sect—number only a few hundred, with many employed in skilled trades or the professional sector. The Yazidi population, though historically limited in Baghdad, has grown since 2014, as survivors of ISIS's attacks sought safety in the city.

Baghdad’s linguistic environment also reflects its multicultural heritage. The dominant dialect is Baghdadi Arabic, which carries traces of Persian, Turkish, and Aramaic influence. Within households and community centers, languages such as Kurdish (mainly Sorani), Syriac, Armenian, and Persian are still spoken. Institutions like the Iraqi Kurdish Cultural Center continue to offer programs in language and cultural preservation.

“Baghdad is not just a city, it’s a linguistic archive, a living museum of Iraq’s multi-ethnic soul. But like many museums, parts of it are fading,” commented Dr. Hussein al-Taie, an anthropologist at the University of Baghdad.

The Political Capital

Baghdad remains the country’s political center. The capital’s symbolic heart, the Green Zone, encapsulates the country's paradox: a fortified enclave of government institutions and foreign embassies, isolated by concrete walls and checkpoints, set apart from the chaos beyond.

“The Green Zone is a republic within a republic,” political analyst Hisham al-Hashemi observed before his assassination in 2020.

Since Saddam Hussein's fall in 2003, Baghdad has experienced continual power struggles involving political factions, sectarian blocs, and regional powers. The 2005 sectarian-based power-sharing model, designed to stabilize the post-invasion state, has entrenched patronage networks and weakened institutions instead.

Transparency International ranked Iraq 154th out of 180 in its 2023 Corruption Perceptions Index. According to Parliament’s Integrity Committee, roughly $239 billion in public funds have been misappropriated since 2003.

“Our state is run like a bazaar,” said former Electricity Minister Luay al-Khatteeb. “Everything is for sale, from contracts to public office.”

Adding to this complex landscape is the expanded presence of paramilitary groups in the capital. Over 40 factions operate under the Popular Mobilization Forces (PMF). Though formally part of the state security structure, some groups function independently, manning checkpoints, managing detention centers, and controlling localized services.

Yet amid power consolidation and institutional erosion, Baghdad has emerged as the beating heart of civic resistance. In 2019, the Tishreen Uprising brought tens of thousands to the streets, demanding jobs, political accountability, and better services. Over 600 people were killed and more than 20,000 injured, many in Baghdad’s Tahrir Square.

Protesters transformed the square into a defiant encampment complete with kitchens, clinics, and libraries. Walls and underpasses became canvases of resistance. “Every wall in Tahrir told a story,” said muralist Safa Mosafer. “We wrote the future in paint and blood.”

The Economic Pulse

Baghdad’s economic landscape is dominated by a bloated public sector. More than 60% of Iraq’s workforce is employed by the government, often in overlapping or redundant positions. In 2024, salaries for public sector workers consumed over 41% of the federal budget, limiting fiscal space for investment in infrastructure, education, and healthcare.

The private sector, meanwhile, remains underdeveloped. Complex regulations, widespread corruption, and a lack of investor confidence have stifled business activity. Iraq ranked 172nd out of 190 countries in the World Bank’s 2024 ease of doing business index, underscoring the bureaucratic hurdles facing entrepreneurs.

With limited access to formal employment, many Baghdad residents depend on the informal economy to survive. The Iraqi Federation of Industries estimates that informal activity, ranging from street vending to unregistered businesses, accounts for around 45% of the capital’s economic activity. Markets such as Al-Shorja and Bab al-Muadham are crowded with vendors navigating daily uncertainty.

“If I don’t sell tea here, my family doesn’t eat,” said Ahmed, 27, who works near Tahrir Square. “There are no jobs, no support, this is all we have.”

Youth unemployment also remains a critical issue. Nationally, over 36% of Iraqis aged 15 to 24 are jobless. In Baghdad, the figure is believed to be higher, particularly among university graduates. Government statistics show that 61% of graduates are either unemployed or underemployed.

The lack of opportunities has prompted many to leave. In 2023, more than 29,000 Iraqis applied for asylum in Europe, a large number of them from Baghdad.

For families remaining in the city, remittances from abroad have become an important source of income. Iraqis living overseas sent home $9.1 billion in 2024, a 12% increase from the previous year, according to the Central Bank of Iraq. In eastern and southern Baghdad, such transfers often offer more financial stability than state salaries or social assistance.

The city’s real estate market has also undergone a dramatic shift. Once driven by post-war reconstruction, the sector is now dominated by speculative investment and opaque land deals. Transparency International Iraq estimates that up to 30% of Baghdad’s public land has been illegally seized or sold through fraudulent contracts since 2019.

Land mafias comprising politically connected business figures are accused of manipulating land ownership and project development. Meanwhile, gentrification is transforming areas such as Al-Mansour, Jadriya, and parts of Karrada. Gulf-based developers and other international firms have invested heavily in high-end residential and commercial projects, driving up property prices.

As wealthier residents move in, lower-income communities are increasingly pushed to the city’s periphery, neighbourhoods like Sadr City, Al-Shaab, and Al-Hurriya, where public services are limited.

“Baghdad is turning into two cities,” said urban economist Dr. Saba Al-Ani. “One that is modern, secure, and wealthy, and another that is overcrowded, underserved, and deteriorating.”

Where Culture Lives

Among the city’s most prominent heritage sites is Al-Mustansiriyah School, founded in 1227 during the Abbasid era. Situated along the Tigris River, the institution once stood among the Islamic world’s leading centres of learning, offering education in medicine, astronomy, law, and mathematics. According to Iraq’s General Authority for Antiquities and Heritage, the school now receives more than 150,000 visitors annually, including students and participants in cultural festivals.

Al-Mutanabbi Street continues to function as a central hub for Baghdad’s literary and artistic life. Named after the 10th-century poet al-Mutanabbi, the street draws large crowds every Friday. Book vendors line the sidewalks while cafés host exhibitions and poetry readings. “This is the place where ideas breathe,” observed Haydar al-Taie, a philosophy graduate from the University of Baghdad. Severely damaged in a 2007 bombing, the street was later restored and has regained its role as a cultural gathering point.

Interest has also increased in the Baghdad Tower, a 205-meter structure that reopened after years of closure due to damage sustained during the 2003 invasion. The tower, which includes a revolving restaurant and observation deck, offers panoramic views of the city. The Ministry of Tourism and Antiquities reports that domestic visits to the tower and nearby parks rose by nearly 18% in 2023 compared to the previous year.

In the same area, Al-Zawraa Park—the city’s largest public green space—offers amusement rides and access to the Baghdad Zoo. Once home to more than 600 animals, the zoo saw its population fall to under 50 during the 2003 conflict. Years of recovery have helped raise the number of animals to over 200. “For many families, it’s more than just a park,” reflected zoo director Abu Kareem. “It’s a space to breathe again.”

The Iraqi Museum remains a key destination for those interested in Mesopotamian history. Housing over 170,000 artifacts, the museum reopened in 2015 after a major looting in 2003, during which more than 15,000 items were stolen. Over 7,000 of those have since been recovered. Among the museum’s highlights are pieces from Ur, Babylon, Assyria, and Sumer, including the iconic Uruk Vase. The Ministry of Culture recorded more than 200,000 visitors in 2023.

Religious landmarks continue to draw visitors as well. Kadhimiya, an administrative district of Baghdad most famously known as a holy city for Twelver Shia Muslims, is distinguished by the Al-Kadhimiya Mosque, a highly revered shrine containing the tombs of two significant Shia Imams.

In Adhamiyah, the Abu Hanifa Mosque commemorates Abu Hanifa al-Nu‘man, the 8th-century scholar and founder of the Hanafi school of Islamic jurisprudence. Known for its Ottoman-style architecture, the mosque underwent recent restoration supported by Iraq’s Sunni Endowment and the Turkish Cooperation and Coordination Agency (TİKA).

Despite ongoing challenges, tourism officials say Baghdad is seeing a modest increase in domestic and regional interest. The Ministry of Tourism has identified more than 10 restoration and infrastructure projects launched since 2023 to support heritage sites and improve access.






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