Iraqi Prime Minister Ali al-Zaidi defended the decision to change the dollar exchange rate, saying that the government took it in light of a financial crisis that was exacerbated by the interruption of oil exports and the closure of the Strait of Hormuz, while the decision sparked criticism from representatives and economic experts amid fears of its impact on the purchasing power of citizens.
Al-Zaidi said, during a late session of the House of Representatives on Thursday-Friday night, that his government found itself faced with three options to secure salaries and overcome the financial crisis, which are “compulsory saving and letting the employee live on promises, or distributing salaries every 45 days, or borrowing and flooding the country with debt.”
He added, according to a statement from his media office, that his government “took over the mission and the economy was under siege,” explaining that borrowing was not an appropriate option in light of the size of the existing debt.
Al-Zaidi pointed out that Iraq is going through a “compelling circumstance and an undeclared siege” due to the war and the closure of the Strait of Hormuz, stressing that the government does not want to resort to more borrowing to avoid exhausting the economy.
He said that the difference in the dollar exchange rate previously “was captured by speculators,” stressing that the government is continuing to confront corruption, and that the economy must be treated with an “economic mentality.”
Regarding the availability of foreign currency, Al-Zaidi announced that “good quantities” of hard currency will arrive in the coming days, stressing that the government will pump it into circulation.
For his part, Finance Minister Faleh Al-Sari said, during his hosting in the House of Representatives, that the government is obligated to secure employee salaries, which amount to 7.7 trillion dinars per month.
Al-Sari added, according to what was reported by the official Iraqi agency, that the government has taken measures to address the financial situation, including allocating one trillion dinars from the central bank to support the housing sector.
He explained that the percentage of non-oil revenues in the next budget will rise to 19 percent, compared to 11 percent in the previous budget, as part of the government’s efforts to strengthen its financial resources and reduce dependence on oil.
On the other hand, the representative of the “Badr” parliamentary bloc, Abdullah Al-Khikani, said that his bloc would not vote on the budget unless it ensured the preservation of the dollar exchange rate and controlled the funds resulting from the price difference, which he estimated at about 18 trillion dinars.
Al-Khikani said, in a televised statement, that “Badr’s approval of the budget is conditional on maintaining the price difference.” He added: “It is impossible for Al-Amiri to take a decision that is not in the interest of the people, and I swear that I will not vote on the budget if it is not in the interest of the people.”
He pointed out that his bloc stipulated that the government control the money that he said the banks and beneficiaries obtained from the exchange rate difference, asking: “Where does this money go?” Who do you go to?
On Friday, economic expert Ziad Al-Hashemi criticized the Prime Minister's speech regarding the justification for the decision to reduce the value of the Iraqi dinar against the dollar, saying that the government chose the easiest solution at the expense of citizens to avoid difficult financial options.
For his part, former official at the Central Bank of Iraq and economic expert Mahmoud Dagher told Asharq Al-Awsat that “the deep economic crisis that Iraq is currently going through is the result of successive mistakes by previous governments regarding appointments and raising the operational budget bill and salaries, which were accompanied when the new government took over by the Hormuz crisis, which made the options for the country’s political leadership very narrow.”
Lebanon hopes to convince the United States of America to confirm its hosting of the Lebanese-Israeli military meeting in Florida before the Knesset elections in Israel on October 27, and later the midterm elections in America on November 3, because Lebanon has no interest in carrying forward the negotiations until after the completion of these two electoral deadlines.
Asharq Al-Awsat learned from a political source directly concerned with the negotiations that the American ambassador to Lebanon, Michel Issa, has not brought with him, so far, anything new regarding confirming the date of the military meeting during his tours of Lebanese officials, although he advised in his private councils to postpone the meeting until after the elections in Israel and the midterm elections in the United States.
The source confirmed that Ambassador Issa is careful, in his meetings, which he holds away from the limelight, not to force the American administration to adopt his point of view, which is a “personal opinion” in light of his reading of the current political circumstances that dictate that Netanyahu wait and not provide facilities to move the “framework agreement” into implementation in anticipation of the date of the Knesset elections.
