Adviser: Finance Ministry to shed salary-distributor role and plan Iraq’s economic future

BAGHDAD — Prime Minister Ali al-Zaidi has directed the Finance Ministry to prepare a long-term economic plan and transform its role from what his financial adviser described as a distributor of salaries and wages into a ministry that shapes Iraq’s economic future and fosters private sector partnership.

Adviser Mazhar Mohammed Salih told the Iraqi News Agency that Zaidi’s decision to appoint the finance minister as deputy head of the Ministerial Council for the Economy reflects “the philosophy of the modern state and the philosophy of the new government.” He described the council as “the kitchen of economic policymaking” and said the Finance Ministry would take “the largest role in changing the philosophy of the economic system and creating partnership between the state and the market.” Implementation would involve multiple state institutions including the Board of Financial Audit and the ministries of industry and agriculture, as well as financial market regulators.

Salih also stressed that the Central Bank of Iraq remains independent and “does not receive orders from the government,” coordinating with it through the Ministerial Council for the Economy.

The directive comes as Iraq faces a severe fiscal crisis. Central Bank Governor Ali al-Allaq warned last week that the budget deficit had become “real and chronic” and that Iraq may need external borrowing after state banks reached their lending limits. Financial expert Mahmoud Dagher separately warned that monthly oil revenues had fallen below $1 billion against a monthly requirement of more than $6 billion to cover salaries and pensions, with domestic debt potentially rising to 140 trillion dinars ($91.5 billion) under emergency Central Bank financing measures.

Iraq exported fewer than 10 million barrels in April, generating just over $1 billion, against roughly 100 million barrels and $7 billion monthly before the U.S.-Israeli conflict with Iran disrupted shipping through the Strait of Hormuz.