SULAIMANI (ESTA) — Iraqi Minister of Finance Ali Allawi said the country’s economy is “riddled with corruption”, calling for cuts in public spending as its revenues fall short.
Allawi, who is also Iraqi deputy prime minister, told the Guardian that there were no quick wins regarding the federal government’s efforts to introduce reforms.
The economy would probably remain in “existential crisis so long as oil does not reach $70 a barrel for a sustained period,” Guardian cited Allawi as saying.
Iraq’s economy is already projected to shrink by 10 percent this year following a dramatic drop in oil prices from over $50 per barrel to around $20.
OPEC’s second-biggest oil producer relies almost exclusively on its crude exports to fund its budget, which includes a bloated public sector and mass subsidies.
The border customs “are riddled with corruption to the point where minor clerks’ jobs in some outposts change there for $50,000 to $100,000 and sometimes it goes up multiple of that,” the Guardian quoted Allawi as saying.
“On the assumption that oil prices don’t move up, something somewhere has to give – either we follow a sort of Venezuela course and become an oil economy that goes belly up, or we tighten our belts,” Allawi added.
“A lot of the country’s problems are interlocking and whenever there is an issue that requires resolution, there’s bound to be some vested interest, sometimes extremely powerful, that stop this from happening,” he noted.
“People say, ‘Why not go after low-hanging fruit.’ There really is no such thing as low-hanging fruit if the entire environment around you is to a large extent devastated.”
Allawi, who served as finance minister in a transitional government Iraqi in 2005, finds himself in a similar position now: part of a short-term cabinet that has inherited a web of challenges from its predecessors.
The new cabinet sought to save by cutting monthly disbursements to ex-political prisoners and retirees earning a double-wage, but that sparked accusations it was targeting the country’s most vulnerable citizens while turning a blind eye to graft among top officials.
Iraq is perceived as the 16th most corrupt country in the world according to Transparency International, with some $450 billion in public funds vanishing into the pockets of shady politicians and businessmen since 2004, AFP reported.
