ShafaqNews/ Iraq could face severe economic challenges,including the inability to pay public sector salaries within two years, ifcritical reforms are not implemented, former Electricity Minister LuayAl-Khatib warned on Tuesday.
DescribingIraq’s governance as a system of “fiefdoms,” he emphasized the need forstructural reforms to avoid what he called “inevitable collapse.”
Ina statement on X, Al-Khatib highlighted the nation’sprecarious economic situation, noting that “the deficit in federal budgets hasreached 40%.”
Hewarned that if Iraq continues to draw on cash reserves amid fluctuating orfalling oil prices, the value of the local currency could collapse. “In thisscenario, the state will struggle to pay public sector salaries within twoyears,” he said.
Al-Khatibcriticized the current governance model, stating, “Since the fall of thedictatorship in 2003, Iraq has been run by fiefdoms prioritizing private andsectarian interests.”
“Thishas transformed the private sector into a façade for political profiteering,deterring real investments and foreign currency inflow,” he added, attributingIraq’s ongoing challenges to widespread “corruption” and the absence of socialjustice and economic sustainability.
Turningto the electricity sector, Al-Khatib dismissed claims of external interference,describing the issue as “entirely domestic and political.” He argued thatpolitical interests have obstructed efforts to reform and privatize the sector,leading to inefficiencies and corruption.
“Thecost of government subsidies for electricity and oil exceeds $30 billionannually, with $20 billion allocated to electricity alone,” he revealed, describingthis financial drain as unsustainable.
Hecalled for “comprehensive reforms,” including restructuring the sector,revising tariffs, automating billing systems, removing illegal connections, andeliminating exemptions.
“Thesesteps are critical to making the sector viable for privatization and attractingglobal-standard investments,” Al-Khatib said.
Theformer minister estimated that fully rebuilding Iraq would require over $1.5trillion, a figure that far exceeds the nation’s oil revenues. “Attractingforeign investment and hard currency is the only viable solution,” he explained,urging the creation of a “secure and competitive investment environment freefrom political interference and armed groups.”
Heemphasized the importance of offering incentives to investors that arecompetitive with those in other regional and global markets.
Al-Khatibconcluded by calling for a decade-long commitment to economic reform in linewith Iraq’s Constitution. “This process requires uninterrupted, cumulativeefforts beyond the authority of a single ministry,” he said, noting that “Itdemands full Cabinet involvement, political backing, and a nationwide mediacampaign to educate the public with clear and transparent messaging.”