A market it in the southern Iraqi city of Nasiriyah, May 15, 2020. AFP
A market it in the southern Iraqi city of Nasiriyah, May 15, 2020. AFP
A market it in the southern Iraqi city of Nasiriyah, May 15, 2020. AFP
A market it in the southern Iraqi city of Nasiriyah, May 15, 2020. AFP

Senior Iraqi official lays out just how bad country’s finances are


Khaled Yacoub Oweis
  • English
  • Arabic

A veteran Iraqi economist who is advising the country's new Prime Minister, Mustafa Al Kadhimi, has revealed astounding figures on government waste in the resource-rich but impoverished nation.

Mudher Salih told of a state obsessed with generating money from its oil sector without acting to develop the country or plug holes in the budget that have been sucking liquidity out of public finances for years.

The electricity sector costs the government about $10 billion (Dh36.73bn) a year to run but generates only 7 per cent of its operating costs in revenue, Mr Salih told the official Iraqi news agency on Tuesday.

Iraq also suffers crippling power cuts and imports electricity and gas from Iran to boost production.

Official datas show its generation capacity at 16,000 megawatts, compared with the 24,000 to 30,000 megawatts needed to satisfy demand.

Mr Salih, a former central bank official, is one of the few senior independent experts in Iraq who survived purges under Saddam Hussein.

He retained a senior position in the state after the consolidation of the Shiite political ascendency in 2005, the year Iraq had its first democratic poll post-Saddam.

Mr Salih said Iraq imported $50bn worth of fuel in the past 10 years, although it is one of the top five members of Opec.

"This amount could have been used to build 10 large oil refineries," he said.

"Big structural changes are needed in the electricity and oil sector."

Mr Salih said that without "real" investment, Iraq would have no capacity to develop and progress.

Without "real" investment, Mr Salih said Iraq will have no capacity to develop and progress". He added that investment was mostly made to produce more oil and that revenues outside the sector are non-existent.

Mr Salih said the government would be taking "emergency measures and they will be very difficult, in addition to a long-term reform process to activate the private sector".

His comments echoed a warning by the World Bank in a recent report about Iraq "facing a combination of acute shocks, which the country is ill-prepared to manage".

The report, from spring this year, highlighted challenges including the collapse in oil prices, the coronavirus, pandemic and "growing discontent over poor service delivery, rising corruption, and lack of jobs."

The World Bank predicted a debt trap that would "create pressures on the exchange rate and inflation".

It assumes that if oil prices stabilised in the low $30s a barrel, Iraq would still need to raise $67bn in financing, equal to 39 per cent of gross domestic product, to cover spending.

"Implementing reforms in Iraq has become even more crucial for the sustainability of growth and job creation," the report said.

Mr Al Kadhimi has signalled his intent to fix the economy by appointing his confidant Ali Allawi, a former investment banker, as Finance Minister.

He said he found state coffers were "nearly empty" when Parliament confirmed him as premier on May 5.

Mr Allawi's first trip abroad as an official over the weekend was to Saudi Arabia, the default destination for most Arab nations in economic trouble.

Iraqi Finance Minister Ali Allawi in Riyadh. SPA
Iraqi Finance Minister Ali Allawi in Riyadh. SPA

In March this year, Mr Allawi made a presentation at a closed-door meeting in Berlin in which he charted a historical analysis of corruption in Iraq.

A copy of the presentation, entitled The Political Economy of Institutional Decay and Official Corruption: The Case of Iraq,  was seen by The National.

Mr Allawi said that until the 1980s, "Iraq was not perceived as a corrupt country".

He traced the start of the malaise to the 1970s.

He said fear of the one-party Baath state in that decade and "ideological fervour" replaced "religio-ethical norms and conventions as the main enforcement tool to prevent the occurrence of widespread corruption".

Mr Allawi said the First Gulf War in 1990-1991 ushered in "catastrophic economic, social, and administrative collapse".

It was superseded by the era after the US-led invasion in which he said corruption "had risen markedly, and institutional decay was everywhere".

Mr Allawi said he had come across estimates of individual Iraqi assets outside the country of between $100bn and $300bn.

"The best estimates are approximately $125bn to $150bn," he said. "The large majority of these assets are illegitimately acquired."

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UAE currency: the story behind the money in your pockets
MOUNTAINHEAD REVIEW

Starring: Ramy Youssef, Steve Carell, Jason Schwartzman

Director: Jesse Armstrong

Rating: 3.5/5

The specs

Engine: 3.0-litre six-cylinder MHEV

Power: 360bhp

Torque: 500Nm

Transmission: eight-speed automatic

Price: from Dh282,870

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Company profile

Company name: Dharma

Date started: 2018

Founders: Charaf El Mansouri, Nisma Benani, Leah Howe

Based: Abu Dhabi

Sector: TravelTech

Funding stage: Pre-series A 

Investors: Convivialite Ventures, BY Partners, Shorooq Partners, L& Ventures, Flat6Labs

In Full Flight: A Story of Africa and Atonement
John Heminway, Knopff

The specs

AT4 Ultimate, as tested

Engine: 6.2-litre V8

Power: 420hp

Torque: 623Nm

Transmission: 10-speed automatic

Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)

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Labour dispute

The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.


- Abdullah Ishnaneh, Partner, BSA Law 

Reputation

Taylor Swift

(Big Machine Records)

Squid Game season two

Director: Hwang Dong-hyuk 

Stars:  Lee Jung-jae, Wi Ha-joon and Lee Byung-hun

Rating: 4.5/5

Infiniti QX80 specs

Engine: twin-turbocharged 3.5-liter V6

Power: 450hp

Torque: 700Nm

Price: From Dh450,000, Autograph model from Dh510,000

Available: Now

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UAE currency: the story behind the money in your pockets
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Brolliology: A History of the Umbrella in Life and Literature
By Marion Rankine
Melville House

The essentials

What: Emirates Airline Festival of Literature

When: Friday until March 9

Where: All main sessions are held in the InterContinental Dubai Festival City

Price: Sessions range from free entry to Dh125 tickets, with the exception of special events.

Hot Tip: If waiting for your book to be signed looks like it will be timeconsuming, ask the festival’s bookstore if they have pre-signed copies of the book you’re looking for. They should have a bunch from some of the festival’s biggest guest authors.

Information: www.emirateslitfest.com
 

Sam Smith

Where: du Arena, Abu Dhabi

When: Saturday November 24

Rating: 4/5

The%20specs
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While you're here
UAE currency: the story behind the money in your pockets
SPECS
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Start times

5.55am: Wheelchair Marathon Elites

6am: Marathon Elites

7am: Marathon Masses

9am: 10Km Road Race

11am: 4Km Fun Run

The specs

Engine: 2.0-litre 4-cylturbo

Transmission: seven-speed DSG automatic

Power: 242bhp

Torque: 370Nm

Price: Dh136,814

The specs: Fenyr SuperSport

Price, base: Dh5.1 million

Engine: 3.8-litre twin-turbo flat-six

Transmission: Seven-speed automatic

Power: 800hp @ 7,100pm

Torque: 980Nm @ 4,000rpm

Fuel economy, combined: 13.5L / 100km

GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

THE%20FLASH
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ENGLAND SQUAD

Goalkeepers: Jack Butland, Jordan Pickford, Nick Pope 
Defenders: John Stones, Harry Maguire, Phil Jones, Kyle Walker, Kieran Trippier, Gary Cahill, Ashley Young, Danny Rose, Trent Alexander-Arnold 
Midfielders: Eric Dier, Jordan Henderson, Dele Alli, Jesse Lingard, Raheem Sterling, Ruben Loftus-Cheek, Fabian Delph 
Forwards: Harry Kane, Jamie Vardy, Marcus Rashford, Danny Welbeck

SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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The%20specs
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ASIAN%20RUGBY%20CHAMPIONSHIP%202024
%3Cp%3E%3Cstrong%3EResults%3C%2Fstrong%3E%3Cbr%3EHong%20Kong%2052-5%20UAE%3Cbr%3ESouth%20Korea%2055-5%20Malaysia%3Cbr%3EMalaysia%206-70%20Hong%20Kong%3Cbr%3EUAE%2036-32%20South%20Korea%3Cbr%3E%3Cbr%3E%3Cstrong%3EFixtures%3C%2Fstrong%3E%3Cbr%3EFriday%2C%20June%2021%2C%207.30pm%20kick-off%3A%20UAE%20v%20Malaysia%3Cbr%3EAt%20The%20Sevens%2C%20Dubai%20(admission%20is%20free).%3Cbr%3ESaturday%3A%20Hong%20Kong%20v%20South%20Korea%3Cbr%3E%3C%2Fp%3E%0A
COMPANY PROFILE
Name: Kumulus Water
 
Started: 2021
 
Founders: Iheb Triki and Mohamed Ali Abid
 
Based: Tunisia 
 
Sector: Water technology 
 
Number of staff: 22 
 
Investment raised: $4 million 
Biography

Favourite Meal: Chicken Caesar salad

Hobbies: Travelling, going to the gym

Inspiration: Father, who was a captain in the UAE army

Favourite read: Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter

Favourite film: The Founder, about the establishment of McDonald's

The specs: 2018 Chevrolet Trailblazer

Price, base / as tested Dh99,000 / Dh132,000

Engine 3.6L V6

Transmission: Six-speed automatic

Power 275hp @ 6,000rpm

Torque 350Nm @ 3,700rpm

Fuel economy combined 12.2L / 100km