The dollar enters the budget calculations... The Finance Committee awaits the Ministry of Finance's proposals.
The Finance Committee in the Iraqi Parliament is preparing to begin one of the most important economic discussions in the coming period, with the expected arrival of the draft federal budget for 2027 to Parliament in mid-October, amid initial estimates indicating a deficit that may reach about 65 trillion dinars.
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Member of Parliament’s Finance Committee, Ikhlas Al-Dulaimi, said that the draft budget is expected to reach the House of Representatives on October 15, stressing that the committee has prepared its plans and preparations to study the draft, organize its items and discuss it before putting it to a vote.
The date is consistent with previous statements by Finance Committee member Jamal Kojar, who said that the Finance Minister informed the committee that the draft budget would reach Parliament on October 15, in accordance with legal timelines, while the price of oil on which revenue estimates will be based is still not definitively decided.
A deficit that could reach 65 trillion dinars
Al-Dulaimi predicted that the deficit in the 2027 budget would reach about 65 trillion Iraqi dinars, a figure that puts the government and parliament before a challenge regarding how to finance spending without increasing pressure on public finances.
She confirmed that the Finance Committee will discuss the procedures and solutions that the Ministry of Finance will propose to deal with the deficit after the project officially reaches Parliament.
These estimates come in conjunction with economic warnings about the continued heavy reliance of the budget on oil revenues, which makes Iraq’s financial situation sensitive to changes in crude oil prices, export volumes, and disruptions that may affect the movement of energy exports.
The exchange rate enters budget discussions
One of the most prominent issues revealed by the Finance Committee is the exchange rate of the dollar against the dinar.
Al-Dulaimi said that the committee will discuss the exchange rate issue within the deficit-related solutions, in addition to the measures that will be presented by the Ministry of Finance, noting that there are proposals and solutions at the Ministry that the committee will review after receiving the draft budget.
These statements, in themselves, do not imply a decision to change the official exchange rate; the Ministry of Finance or the relevant monetary authorities have not yet announced a final decision on this matter in the published sources that have been reviewed.
Thus, the exchange rate will be one of the issues that will be discussed when studying the budget, while the nature of the government proposals will become clear after the project and its financial schedules officially reach the House of Representatives.
Employee salaries are "secured".
Regarding public spending, Al-Dulaimi confirmed that the salaries of state employees are secured, coinciding with talk of increased oil exports and the existence of reserves at the Central Bank that can contribute to supporting financial stability.
The issue of salaries is of particular importance in light of the large operational spending and financial obligations of the state, while the government seeks to prepare a budget that can balance current expenditures, investment projects and the actual ability to generate revenues.
The price of oil has not yet been decided.
The price of a barrel of oil adopted in the budget remains one of the most anticipated figures, as Kujer stated in previous remarks that the proposals under consideration ranged between $50 and $65 per barrel, with a difference of opinion regarding the most appropriate price to adopt.
Determining the assumed price of oil is a key factor in calculating revenues and deficits; the higher the assumed price, the more sensitive the budget becomes to any actual downturn in global markets, while adopting a more conservative price provides a greater margin of safety if actual selling prices remain above the estimated price.
All eyes are now on October 15, the expected date for the draft budget to reach Parliament, as the official tables will then reveal the true size of expenditures, revenues, deficit, the assumed oil price, and the mechanisms for financing the financial gap.
The discussions will also reveal more clearly the nature of what the Finance Committee indicated regarding the exchange rate, and whether the matter will be limited to studying its impact on revenues and expenditures, or whether the budget will include new proposals related to fiscal policy.
Between a projected deficit of up to 65 trillion dinars, the issue of the exchange rate, oil prices, salaries and public spending, Iraq’s 2027 budget appears poised to be one of the most sensitive economic issues facing the government and parliament in the coming months.
Kurdistan's share in the 2027 budget... A technical delegation from Erbil arrives in Baghdad
A technical delegation from the Ministry of Finance and Economy of the Kurdistan Regional Government arrived in Baghdad on Wednesday, September 23, 2026, to discuss the draft general budget law for 2027 and to confirm the region's financial entitlements.
Kurdistan 24's correspondent in Baghdad reported that official talks between the region's delegation and the federal Ministry of Finance will begin tomorrow, Thursday, with the aim of discussing the draft budget law and reaching agreements on outstanding financial and technical issues.
The Kurdistan Region delegation includes the directors of the Budget and Accounting Departments, an advisor to the Ministry of Finance, as well as a number of experts specializing in financial affairs and budget preparation.
The discussions focus on the technical aspects of determining the Kurdistan Region’s share in the 2027 draft budget, in addition to presenting Erbil’s observations and demands to be officially included in the draft law before it is referred to the federal government and the federal parliament for ratification.
National Wealth Unit
The absence of a federal law on oil and gas since 2007 until today has led to alternating periods of stagnation and escalating conflicts between the federal government and the producing provinces. Throughout that period, there were no serious intentions to resolve this vital issue related to the state’s economy, which allowed for a competitive war of corruption, smuggling, and the exorbitant enrichment of many figures and names who established financial empires that could finance the budgets of small countries in our regional vicinity.
This law, for those who do not know it, represents the basic pillar of the structure of the economy, which is subject to the dominance of oil revenues by (90 percent). Its enactment will enhance the confidence of international investors and support the exchange rate of the Iraqi dinar through the flow of hard currency and establish fair mechanisms for the distribution of revenues. In addition to providing an investment environment for the development of fields and the investment of associated gas, the existence of a stable legislative framework encourages global energy companies to double production to confront the shocks of declining revenues and absorb financial disputes.
The Oil and Gas Law embodies the people’s ownership of their national wealth, as confirmed by Article (111) of the Iraqi Constitution, which is the supreme and highest law in the country. This article stipulates that oil and gas are the property of the Iraqi people in all regions and governorates. It also regulates how this national wealth is to be held by the state and under the control of the federal government, taking into account the fair and just distribution of its revenues in proportion to the population distribution throughout the country, as indicated by Article (112) of the Iraqi Constitution.
On another front, the enactment of this law establishes a mechanism for distributing a portion of the profits generated from crude oil sales to several funds, including a Citizen's Fund, a Reconstruction Fund, a Generations Fund, and other long-term financial reserves. Since the fall of the regime until today, some oil- and gas-producing provinces may have suffered injustice. The management of the country's wealth must be exclusively in the hands of the federal government, and its revenues must be distributed fairly and equitably according to population size. This can only be guaranteed by the Oil and Gas Law, as it is not merely a passing piece of legislation, but rather the cornerstone for restructuring the Iraqi economy.
The continued obstruction of such a law for years, due to political disputes and the prioritization of narrow interests, has cost the public treasury enormous losses and kept the country in a state of financial instability. Therefore, it has become imperative for the House of Representatives to end the state of conflicting constitutional interpretations and reliance on temporary understandings, and to establish fair mechanisms for distributing revenues between the federal government and the producing regions and governorates, and to put an end to the duality of oil policies and protect the unity of national wealth.”
As for the contentious clauses, the best solution lies in adopting a consensual formulation that guarantees the producing governorates a wider scope in managing their affairs, while the sovereign decision to contract and market remains unified in the hands of the federal government. Continuing to obstruct this law is not a strategic option, but rather a sacrifice of Iraq’s future for immediate political gains. It is time for the political forces to overcome their differences and put the national interest above all considerations, in order to find a real entry point for economic reform and financial stability.
We reject the bombing of our neighbors and await the investigations.
Al-Maliki to the US Chargé d'Affaires: A plan and timeframe for restricting weapons will be announced on September 30.
The head of the State of Law Coalition, Mr. Nouri al-Maliki, received today the Chargé d'Affaires of the United States Embassy in Iraq, Mr. Steven Fagin. During the meeting, they discussed Iraqi-American relations, the latest political and security developments in Iraq and the region, and ways to enhance cooperation between the two countries.
Mr. Maliki welcomed Mr. Fagin, wishing him success in his new mission, and stressing the importance of developing relations between Iraq and the United States on the basis of mutual respect and common interests, especially in light of the Strategic Framework Agreement concluded between the two countries.
Both sides noted the importance of the Prime Minister’s recent visit to Washington last July, and its contribution to strengthening bilateral relations and opening new horizons for cooperation in a number of fields.
On the security front, Mr. Maliki affirmed that Iraq is proceeding with addressing the issue of restricting weapons to the state in accordance with the constitution and the law, in a manner that preserves the country’s security and stability. He pointed out that work is underway through the committee formed by the coordination framework to reach a clear and specific program, stressing that addressing this issue must be done through dialogue and understanding and in accordance with constitutional and legal contexts.
Mr. Maliki indicated that there is a time limit and a program that will be announced on September 30 regarding restricting weapons to the state, noting at the same time that dealing with these issues should be done in a balanced and simultaneous manner that preserves Iraq’s sovereignty and national interests.
Regarding the attacks targeting neighboring countries, Mr. Maliki affirmed Iraq’s rejection of using its territory as a launching pad for attacks against any country, whether by Iraqi or non-Iraqi groups, stressing the need to wait for the results of official investigations and not to issue premature statements or conclusions before they are completed.
Mr. Maliki stressed that Iraq is looking forward to a new phase characterized by stability, construction, reconstruction, and enhanced services, and to taking advantage of the end of the foreign presence phase to move to a broader phase of economic and investment cooperation, calling on American companies to come and contribute to development and reconstruction projects in Iraq.
For his part, Mr. Fagin affirmed his country’s desire to continue cooperation with Iraq and strengthen the economic and investment partnership, noting that the United States seeks to support Iraq in strengthening its relations with its Arab neighbors and expanding areas of cooperation between the two countries. He expressed his happiness at returning to Baghdad, stressing the keen interest of a number of American companies to work and invest in Iraq, and the need to create a suitable environment to enhance their presence in the Iraqi market.
At the conclusion of the meeting, both sides emphasized the importance of continued communication and dialogue between Baghdad and Washington, which contributes to strengthening bilateral relations, supporting Iraq's security and stability, and serving the common interests of both countries and the stability of the region.
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September 23, 2026
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Al-Zaidi meets Trump in New York
Prime Minister Ali Faleh al-Zaidi met today, Wednesday, in New York with US President Donald Trump to discuss the latest developments in the region and the joint efforts being made by Iraq and the United States to enhance security.
The Prime Minister's Media Office stated in a statement that "Prime Minister Ali Faleh al-Zaidi met with US President Donald Trump in New York."
During the meeting, the two sides discussed bilateral relations and ways to enhance cooperation and partnership between the two countries in the political, economic and investment fields. They also reviewed the latest developments in the region and the joint efforts made by Iraq and the United States to promote regional and international security and stability.
Adnan Al-Tai asks and Ramadan Al-Badran answers
Is the division of Iraq on Trump's mind? Rubio spoke of it and broke the promises made by al-Zaidi and the framework.
Since the crushing of the ISIS-led insurgency in Iraq, any mention of the country's unity or concerns about its future has disappeared from the lips of officials. However, US Secretary of State Marco Rubio revived the term "Balkanization" at his press conference on Wednesday, following two consecutive meetings with Ali al-Zaidi, one of which was attended by Trump, and the absence of any other Iraqi representative. Before anything could leak out amidst one of the rare moments of tension between the two sides over the disarmament timetable, which is almost being torn apart by conflicting schedules and rendered meaningless, the US Secretary of State made a statement that left observers wondering. He answered journalists by saying that the continued presence of militias would mean the Balkanization of Iraq, referring to one of the most horrific cases of bloody partition witnessed in the 20th century, centered on the former Yugoslavia. My colleague Adnan al-Tai chose this topic for his episode today with one of the most prominent Iraqi experts on American affairs, Ramadan al-Badran, who summarized the matter in two words: Trump authorized Rubio to handle this file, and he is a man who will not recognize al-Zaidi's schedules or the coordination framework. He suggested that the matter was very clear during the New York meeting. Although the White House will try to maintain its support for al-Zaidi as much as possible.
Ramadan Al-Badran, an international affairs researcher, stated in an interview with journalist Adnan Al-Tai on UTV, which was monitored by 964 Network , that “the Americans were clear through the State Department’s statement after the meeting with the Iraqi delegation. I believe that the Americans are not taking into account the new timing agreed upon by the government with the factions, and they did not pay attention to it or consider it. They conveyed a brief message in their statement, saying: ‘Dismantling the terrorist militias.’ This does not mean disarmament, containment, organization, or integration, but rather dismantling. It is as if they are saying to the Iraqis: ‘We don’t know what you Iraqis are doing!’ But they do not want these militias to exist. This is the brief message with which the Americans commented on what Al-Zaidi said. I believe that Washington’s position is now more stringent regarding the militias, especially after what happened with Saudi Arabia recently.”
He added: “I don’t have details about the reasons why the government team didn’t accompany al-Zaidi during the meeting with Trump, but I think that the one handling the militias file is Marco Rubio, the US Secretary of State, who has a deep understanding of ideas, doctrines, and many other things. At the same time, Trump is still keen on al-Zaidi and committed to him, and still wants to give him a chance. On the other hand, Thomas Barrack is succeeding in obtaining exemptions and permissions for al-Zaidi to do what he can. But the truth that must be understood is that there are two states in Iraq: the state of the political system and the Iraqi state. All that remains of the Iraqi state is the position of Prime Minister, which al-Zaidi represents. As for what remains, al-Zaidi carried the message of the political wing of the political system in his previous trip, and now he carries the message of the military wing of the political system.”
He explained: “The factions are here to stay, whether anyone likes it or not, because they are ideological factions affiliated with an ideological state, namely Iran. They view Iraq as a host country, so they will remain and continue by all means and methods. Anyone who thinks that these factions will give up their weapons is mistaken, because this contradicts the ideological dimension of these factions. What guarantees the political system will remain if the factions are gone? What guarantees the continuation of the coordinating framework if the factions are gone? There is a state with a political system in Iraq, an ideological political system, and there is the Iraqi state, which is a state of constitution and citizenship. Iraq now has an ideological state that has been competing with the Iraqi state since 2003, and this does not apply only to the Shiites, but also to the Sunnis, especially ISIS and al-Qaeda, as they wanted to establish a state at the expense of the Iraqi state, but they have all ended.”
He emphasized: “The US State Department statement consisted of three points, each complementing the others. It not only addressed the importance of dismantling the militias but also preventing any attacks launched from Iraqi territory, in addition to Iraq exercising its full sovereignty. Therefore, the presence of these factions is considered an infringement on Iraqi sovereignty. Thus, the factions must realistically understand that their chances of survival lie either in clashing with the state or in disbanding. I doubt there is a rosy future in this matter, as the political system does not allow for relinquishing control of the factions. Even one of the leaders of al-Nujaba said that the framework is negotiating with the factions and subtly hinting to them not to give up their weapons. How can the political system protect itself, which came to power after isolating Sunni and Shiite political forces? Through achievements? Of course not. Rather, it does so by transforming the system into a police state. The political system employs the factions to protect itself.”
Al-Zaidi to Trump: The government is determined to unify security decisions and restrict weapons to the state.
Government spokesman Haider al-Aboudi confirmed that Prime Minister Ali Faleh al-Zaidi, during his meeting with US President Donald Trump in New York, reiterated the government's determination to unify security decisions, restrict weapons to the state, and proceed with completing the elements of sovereignty in accordance with the constitution .
Al-Aboudi said, in a statement to the official agency followed by Al-Sa’a Network, that “the meeting of Prime Minister Ali Faleh Al-Zaidi with the President of the United States in New York laid out clear features for the next stage in the relationship between Baghdad and Washington, based on a vision that is based on economic and investment partnership, and the completion of sovereign entitlements in light of the decision of the state and its institutions .”
He added that "the Prime Minister affirmed during the meeting that the Iraqi government is working to develop the relationship with the United States into sustainable opportunities in the fields of energy, investment and development, based on mutual respect and common interests ."
He continued: “At the heart of this vision, the Prime Minister reiterated during the meeting the government’s determination and the consistency of its decision to unify security decisions and restrict weapons to the state, and to proceed with completing the elements of sovereignty in accordance with the constitution
CF source: Weapons deadline could disrupt faction talks
this is later in the evening...
Setting a deadline for bringing armed factions’ weapons under state control could complicate negotiations with faction leaders, a source in Iraq’s Coordination Framework (CF) warned on Wednesday, referring to Prime Minister Ali Al-Zaidi’s June 30, 2027 target.
The source told Shafaq News that political leaders in the CF, an alliance of major Shiite political forces, had discussed with Al-Zaidi before his trip to New York a “tentative timeframe” longer than the one he later announced. A fixed deadline, the source said, “could disrupt” the work of the committee negotiating with faction leaders, while also pressing it to intensify efforts toward an agreement on the handover and management of weapons.
Al-Zaidi has pledged to complete the disarmament of armed factions by the end of June 2027. In a recent interview with The New York Times, he outlined an initial 90-day phase during which the factions would “refrain from attacks” and US forces “would not strike them.”
Speaking with Shafaq News, lawmaker Abu Turab Al-Tamimi said the government, in coordination with the relevant committees, could complete the process within the announced timeframe if the US withdrawal is completed and the Global Coalition’s military mission in Iraq ends. He suggested Al-Zaidi “may have received assurances or indications” regarding the withdrawal from Iraqi bases and “possibly US commitments not to interfere in Iraqi decisions,” without providing details.
The Coalition’s military mission in Iraq is scheduled to end on Sept. 30. Several armed factions have previously linked any move to relinquish their weapons to the departure of foreign forces from the country.
Why is the dollar rising? Parliamentarians demand the reasons be revealed before Parliament.
Member of Parliament Ghufran Al-Shammari called on the government and the Central Bank yesterday to take urgent measures to limit the fluctuations in the dollar exchange rate and reduce the gap between the official rate and the parallel market rate, warning of the impact of the rise on purchasing power and the prices of goods and services.
Al-Shammari said, in a press conference attended by a correspondent from (Al-Mada), that the rise of the dollar has direct effects on the cost of living and commercial and economic activity, which calls for coordinated institutional action to protect citizens, especially those with limited and middle incomes.
She referred to the Central Bank’s statement issued on September 19, 2026, which confirmed the adequacy of its foreign reserves and the continued financing of foreign trade through official channels, and attributed the rise in the exchange rate to speculation and exploitation of expectations and geopolitical conditions, demanding that these clarifications be translated into practical and transparent measures that restore stability to the market.
Al-Shammari called for ensuring the smooth flow of foreign trade financing and meeting legitimate demands for foreign currency, while simplifying banking procedures and tightening control over speculation, manipulation, money laundering and currency smuggling operations.
It also called on the Central Bank to issue periodic statements clarifying the size of the demand for the dollar, foreign currency sales, the reasons for the change in the exchange rate, and the measures taken to address it, in order to limit rumors and misleading information that affect the markets.
She stressed the need to activate coordination between the government, the central bank, the ministries of finance, trade, and planning, and regulatory bodies to address the causes of the increase, as well as to protect the incomes of employees, retirees, and vulnerable groups from the effects of inflation.
Al-Shammari called for a detailed report to be submitted to the House of Representatives that includes the reasons for the rise of the dollar, the size of foreign reserves, trade financing mechanisms, and the challenges facing monetary and fiscal policies, with the identification of measurable corrective measures, stressing that the stability of the dinar requires an integrated economic policy that supports local production and enhances confidence in the banking system.
Fears of sanctions and speculation are behind the fluctuation in the dollar's exchange rate.
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The exchange rate of the Iraqi dinar against the dollar has been volatile, reaching high levels before declining slightly. Experts attribute this volatility to a combination of monetary, banking, economic, and psychological factors, while specialists emphasize that the parallel market is significantly influenced by demand for foreign currency and its volume. The ones that are on display.
Multiple reasons
Professor of International Economics, Dr. Nawar Al-Saadi, attributed the reasons for the current rise to the interaction of a group of factors, most notably the widening gap between the demand for the dollar in the parallel market and the monetary supply of it, in addition to the state of uncertainty that pushes some traders and citizens to increase their holdings of foreign currency as a means of hedging.
Al-Saadi added, in an interview with Al-Sabah, that foreign trade financing mechanisms represent an influential factor in market movement, as tightening banking compliance requirements, combating money laundering, and linking transfers to correspondent banks may, in some cases, lead to delays in import financing operations, which pushes part of the demand to the parallel market to obtain dollars more quickly.
He pointed out that the high demand related to imports, customs duties and taxes, along with speculation and expectations of a rise in the dollar's price, could increase pressure on the market, indicating that negative expectations themselves could become an influential factor when traders rush to buy dollars in anticipation of further increases.
Al-Saadi explained that the rise in the dollar's price in the parallel market does not mean a change in the official price, calling for raising the efficiency of official channels and accelerating foreign trade financing procedures, in order to reduce the gap between market needs and banking procedures, in conjunction with limiting speculation and illegitimate demand.
Increased demand
For his part, economic researcher Ahmed Eid believes that the rise is also linked to uncertainty about economic, financial and political developments, indicating that fears of expanding US sanctions, along with regional developments and pressures facing public finances, may push some traders to increase precautionary demand for the dollar.
Eid added to Al-Sabah that speculation is taking advantage of the atmosphere of anxiety in the market, which may push prices to higher levels, and that the stability of the exchange rate during the next stage is linked to the ability of the Central Bank to provide sufficient supply of dollars to meet legitimate demand through official channels, as well as containing speculation and enhancing confidence in the banking system.
He stressed that the continuation or decline of upward pressures will remain linked to developments in liquidity and the volume of supply and demand, explaining that improved dollar flow through official channels and a decrease in fears could contribute to the market returning to more stable levels.
Al-Zaidi calls on American companies to take advantage of investment opportunities in Iraq
He calledprime ministerIraqi Ali FalehZaidiAmerican companies should take advantage of the investment opportunities available inIraq.
Al-Zaydi confirmed that "IraqIt possesses significant natural resources, a skilled workforce, and a strategic geographic location, providing essential elements for successful investment partnerships. He noted that "the government is working to utilize these resources to serve economic development and enhance investment opportunities." He explained the government's commitment to providing all necessary requirements and facilities for companies and investors, including granting ownership of investment project lands in accordance with Iraqi law, and benefiting from tax and customs exemptions for investment projects, which can extend up to ten years.
prime ministerIraq is working on developing infrastructure and transportation projects, most notably the railway network withinDevelopment Road ProjectThis will strengthen Iraq's position as a corridor connecting East and West, offering ample opportunities for investors.
Al-Zaydi called on American companies to capitalize on the investment opportunities available in Iraq, particularly in the petrochemical, glass, phosphate, gas, and clean energy sectors, emphasizing the government's commitment to establishing factories and production projects that will contribute to economic diversification and job creation.
The Prime Minister also extended an invitation to members ofroomAmerican trade and specialized companies to participate inBaghdad ConferenceFor energy, and to take advantage of the opportunities offered by the Iraqi economy, stressing that Iraq wants to build economic relations based on partnership, mutual interests and long-term investment.
American website: US investment, financial influence, and intelligence cooperation will remain in Iraq after the withdrawal.
Iraq still needs Western expertise in the fields of energy, infrastructure, and the banking sector.
this article came from Oilprice.com it's even longer but I like this title better
The U.S. Has More Leverage in Iraq Than It Thinks
A report by the American news website Oil Price indicated that the withdrawal of American forces from Iraq at the end of this month does not mean the end of American influence and interests in the country, but rather a transition to building long-term communication across the fields of economy, investment, security, intelligence and financial cooperation, as Iraq still needs American and Western technological expertise in the field of energy, infrastructure and reform of the banking sector, especially cooperation in the field of combating terrorism and priority in confronting any possible return of ISIS.
The report argues that this withdrawal should not be seen as the end of Washington’s relationship with Baghdad, but rather as an opportunity to redefine it. The United States will retain influence in Iraq, but it will have to exercise that influence in different ways. The challenge lies in shifting from direct control to indirect influence. Washington will still possess significant instruments of power, including the dollar-based global financial system, sanctions, arms sales, intelligence cooperation, diplomatic leverage, investment, technology, and access to Western markets.
The post-withdrawal relationship should become less focused on security and more comprehensive and strategic. The United States can continue to provide defense assistance and counterterrorism cooperation, particularly in the face of a potential resurgence of ISIS, which will remain a key priority.
However, the economic aspect may become even more important. Iraq needs American and Western technology and investment in energy, electricity, infrastructure, banking, transportation, and other sectors. Thus, the United States can maintain its influence through trade and investment relations, rather than relying on a military presence.
The report notes that this approach is consistent with the 2008 US-Iraq Strategic Framework Agreement, which stipulated that cooperation between the two countries should extend beyond the defense field to include diplomacy, the economy, energy, education, and other areas.
The report notes that US financial leverage
will remain even after the withdrawal of US troops. Iraq’s oil revenues are integrated into the dollar-based international financial system, and Iraqi banks rely on access to dollar transactions and international correspondent banking networks.
Washington demonstrated this leverage in 2026 when it restricted cash dollar shipments to Iraq amid concerns about Iranian-backed militias
and illicit financial activities. These restrictions were later eased after Baghdad took steps that included strengthening financial controls, reforming the banking sector, and disarming armed groups. The question remains: Will Washington halt dollar shipments again if the militias defy the September 30 deadline?
This gives Washington a powerful tool for exerting influence after the military withdrawal. It can restrict access to the international financial system, impose sanctions on banks and individuals, and pressure Iraqi institutions to prevent money laundering and sanctions evasion. Iraqi banks seeking access to the international financial system must adhere to international standards of transparency, anti-money laundering, and sanctions compliance.
The more Baghdad manages to rein in armed factions, improve oversight of the banking system, and prevent money laundering and sanctions circumvention, the more American investment it can attract, the more defense cooperation it can expand, and the more integrated it can be into the international financial system. Conversely, those who continue to carry out armed attacks, engage in money laundering, or violate sanctions could face targeted financial measures and sanctions.
The report notes that Washington supports the principle of all armed groups being subordinate to the civilian government and the military chain of command, but it should be cautious in demanding that Baghdad disarm all factions immediately. There seems to be a consensus among Iraqis that armed factions will not begin handing over their weapons to Baghdad until after September 30.
Many of these factions are not merely armed groups; they have political parties, parliamentary representation, businesses, and social networks, and some are even officially part of the Iraqi security apparatus. Attempting to eliminate them all at once could trigger a civil war, leading to political disintegration and economic collapse.
Accordingly, September 30 should be viewed as a significant political milestone, not a deadline for the disarmament of all factions, even though it is noteworthy to hear Americans complaining about private entities possessing weapons. Washington should insist that progress toward state control be genuine and irreversible, leaving the determination of the appropriate pace and mechanisms to Baghdad.
The report indicates that Iraq in 2026 is not the Iraq of 2011, at the time of the American withdrawal. Today’s Iraqi political elite increasingly views the strategic partnership with the United States as a necessity, at a time when political competition is gradually shifting from identity-based divisions to competition over issues and programs. This makes sectarian polarization less appealing and strengthens the United States’ position as a partner that provides investment, technology, and prosperity.
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