Oil does not help the poor in Iraq, and warnings of a "hungry revolution"

Oil does not help the poor in Iraq, and warnings of a "hungry revolution"

April 11, 2021


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The oil wealth did not prevent the collapse of the financial situation in Iraq , which is witnessing an unprecedented rise in poverty rates, while a few months ago the government sharply reduced the value of the dinar against the US dollar, which exacerbated the suffering of the poor and low-income classes. That the country may witness a "hungry revolution" in light of the current conditions.

According to a recent report by the Ministry of Planning, the poverty rate jumped to 31.7% at the end of last year 2020, while it was about 20% in 2018, as the number of poor people is equivalent to about 11.4 million people.

And the decision of the Iraqi authorities at the end of last year to reduce the value of the dinar against the dollar from 1200 dinars to the dollar to 1450 dinars, by up to 23%, in a clear rise in the prices of commodities, especially foodstuffs, some of which reached two or three times the price increase, which was reflected. Clearly on the living conditions of the Iraqis.

A member of the Iraqi parliament, Abbas Al-Zamili, confirmed to Al-Araby Al-Jadeed that "the reduction in the price of the dinar has greatly affected the prices that have risen in light of the inability of the authorities to control them, and the inability of the Ministry of Trade to provide the ration card items." The biggest impact is on the poor and vulnerable classes with limited incomes.

Al-Zamili said that the central bank’s policy of reducing the value of the dinar delivered a negative message to the citizen who believed that the value of the Iraqi currency would continue to decline, explaining that strengthening the Iraqi economy should be through enhancing non-oil revenues.

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Iraq suffers a severe financial crisis due to the drop in oil prices and the decline in oil revenues, as a result of the outbreak of the Coronavirus pandemic. Iraq is the second largest producer of crude in the "OPEC" after Saudi Arabia, with a daily average of 4.6 million barrels in normal conditions, and it depends on crude to provide more than 90% of public revenues.

A member of the Parliament's Economy and Investment Committee, Falah Al-Khafaji, said in a statement to Al-Arabi Al-Jadeed that those who raised the dollar’s ​​exchange rate forgot the suffering of the citizens, while the rich class alone would benefit from that.

According to a recent report by the Ministry of Planning, the poverty rate jumped to 31.7% at the end of last year 2020, while it was about 20% in 2018, so the number of poor people is equivalent to about 11.4 million people.

In contrast to the widespread criticism of the devaluation of the Iraqi currency, Ihssan Shamran, the accounting director at the Central Bank, said that "the current price of the dollar is very reasonable," noting that raising the price of the dollar against the dinar was "too late."

And Shamran considered that "the demand to reduce the exchange rate of the dollar is not based on any economic science, except that it is favoritism to obtain electoral gains from citizens."

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But the economic expert, Jabbar Al-Mashhadani, said that the current situation prompts some to say that "Iraq may witness a hungry revolution," stressing that the economic capacity of the citizen has begun to weaken significantly in light of confusion in economic policy and manipulation of the exchange rate.

According to Alaa Fadel, one of the foodstuff dealers in a beautiful area in the capital, Baghdad, prices have risen sharply in recent weeks, as most of the goods are imported from abroad in hard currency, explaining to Al-Arabi Al-Jadeed that the rate of increase has reached 3 times for some items such as cooking oil.
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