Iraq is in the grip of a severe water shortage which has left crop growers and food producers such as Iraqi fish farmer Qasem Karam facing the loss of their livelihoods.

Walking over dusty land in the sweltering midday heat in the southern province of Basra, Karam points to his dried up carp ponds, once irrigated by the Shatt al-Arab river.

"Everything is full of salt now because of water scarcity and pollution," he said, pointing at white patches of salt crust nearby.
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"These ponds cost us a lot of time, money and effort. We had an economic plan, but it is all destroyed."

Upstream damming in Turkey and Iran has hit waterflows on the Tigris and Euphrates rivers which form the Shatt al-Arab river, plus dumping of wastewater and poor rainfall due to climate change have led to a drastic reduction in fish farming, experts and officials said.

Lower water levels have also increased evaporation and made the water more saline.
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Karam and three other fish farmers Reuters spoke with said the loss of suitable water was driving them out of a once thriving and profitable business.

According to an official at Basra's agriculture directorate, Abbas Dakheel, only four authorised fish farms continued to work this year, as opposed to 15 in 2020.

"This water is green, dirty and polluted. No fish can live in this water," said Karam, kneeling down next to a pipe irrigating his pond.
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He said that his fish were now either sick, failing to grow or dead as a result.

Jumaa Shia, head of Basra's directorate of water resources, said the city of 1.3 million needs to share its decreasing water resources among domestic users, agriculture, the oil industry and electricity generation.

To save water, authorities have taken measures including closing down some 95 unauthorized fish farms in Basra.
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A barter of Iranian natural gas for Iraqi oil as described by the Iraqi prime minister this week would likely violate U.S. sanctions on Tehran unless the U.S. issued a waiver permitting it, three former U.S. officials said on Thursday.

Iraqi Prime Minister Mohammed Shia al-Sudani on Tuesday said Iraq would begin trading crude oil for Iranian gas to end recurring payment delays to Tehran due to required U.S. approval for such transactions.
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Sudani said Iran had cut gas exports to Iraq by more than half as of July 1 after Baghdad failed to secure U.S. approval to disburse owed funds, but Tehran had now agreed to resume gas exports in exchange for crude oil.

There are few details available about the potential barter, which could help defuse a political problem for Sudani since power cuts are unpopular during the sweltering Iraqi summer when temperatures can top 50 Celsius (122 Fahrenheit).
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However, three former U.S. officials said a barter would likely run afoul of U.S. sanctions.

"It would be a violation of U.S. sanctions to conduct this kind of a barter transaction with Iran absent a U.S. national security waiver being issued," said Richard Goldberg of the Foundation for Defense of Democracies think tank.

"This would be prohibited under the Iran Freedom and Counter-Proliferation Act, which prohibits any transaction related to energy with Iran," added Goldberg, who served on the Trump administration national security council staff.
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Secretary of State Antony Blinken issued a 120-day waiver on March 21, a State Department official said, allowing Iraq to pay Iran only for electricity imports, not for natural gas to fuel Iraqi domestic power generation.

"The March 2023 waiver, granted by the Secretary, allows Iraq to purchase electricity from Iran. Nothing else," said the official on condition of anonymity. That waiver was announced by the State Department on March 31.

There has been speculation the waiver might be amended to allow barter, an issue the official declined to address.

"We are not in a position to preview any future decisions related to the waiver. We have no comment at this time regarding reports of a barter arrangement between Iraq and Iran," the official said.

The Iraqi embassy in Washington did not immediately respond to a request for comment.

Former U.S. officials said the Treasury Department, which oversees most U.S. sanctions against Iran, defines the term "transaction" so broadly that it would cover a barter exchange.

"The test is whether it's a 'significant' transaction. The test is not whether it's denominated in one currency or another or whether ... it's a barter," said a former senior Treasury official on condition of anonymity.

The former official said that could provide "enough wiggle room ... for the U.S. to look the other way, but that is a political decision, that's not a legal question.

"As far as a strictly legal question, it absolutely does violate U.S. sanctions," he added.
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​Baghdad (IraqiNews.com) – Iraq successfully concluded a deal to purchase 12 JF-17 Thunder fighter jets from Pakistan, becoming the fifth country to order this type of aircraft, The International News reported.

Islamabad is also expected to export its JF-17 Block III aircraft, which Pakistan has been jointly manufacturing with China, to Malaysia, Nigeria, Azerbaijan, and Myanmar, according to The International News.

Sources said that the Iraqi government has approved an outlay of $664 million for the purchase of 12 JF-17 Thunder Block III fighter jets from Pakistan, The International News revealed.

The negotiations for the sale of the jets continued for more than two years, as The International News mentioned.

The purchase of aircraft from Pakistan would be the biggest defence deal between the two countries in about 40 years, as The International News illustrated.

Nigeria has already inducted JF-17 Thunder aircraft into its air force, and they are providing services in a satisfactory manner, The International News added.
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A prominent Iraqi Christian leader announced Saturday he would leave Baghdad for the autonomous Kurdistan region, denouncing the president's role in a "disgusting" campaign against him.

Cardinal Louis Raphael Sako, the patriarch of Iraq's Chaldean Catholic Church and architect of Pope Francis' historic visit to the country in 2021, is a key interlocutor between the Iraqi government and its Christian minority.

For several months, Sako has been embroiled in a war of words with a Christian lawmaker, Rayan al-Kildani.

Kildani is the leader of the Babylon Movement, whose armed wing is part of Hashed al-Shaabi -- a network of largely pro-Iran paramilitaries that were integrated into Iraqi security forces in recent years.
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Tensions have intensified since early July, drawing in President Abdul Latif Rashid who cited constitutional grounds in a decision to revoke a presidential decree Sako deems pivotal for his official status and for the administration of church property.

​ERBIL, Kurdistan Region - Iraq pocketed over $7 billion in crude oil sales during the month of June, bringing the country’s total revenue in the first half of the year to over $44 billion.

The Iraqi oil ministry in its preliminary monthly report on Saturday said that the country had exported over 100 million barrels of crude oil in the previous month, at a rate of 3.3 million barrels per day and an average price of over $71.

June’s exports generated a total revenue of $7.1 billion according to the early numbers, down from May's $7.3 billion.

The country has brought in an estimated revenue of $44.4 billion in the first six months of 2022, which is a significant drop from the oil revenue of the first half of 2022 which was placed at $61.3 billion.

Iraq collected over $115 billion from oil sales in 2022, a remarkable increase from 2021’s $75.6 billion.

Oil revenue is Iraq’s main source of income, and the federal government relies on oil sales to cover its costs and pay the salaries of its civil servants.

The Iraqi oil ministry in April announced that it was cutting production by 211,000 barrels per day starting from May and effective until the end of 2023, adding to the two million barrels per day cut already in effect since November of last year.

The Kurdistan Region's oil exports through Turkey's Ceyhan port are yet to resume after being put on hold in late March following a ruling from a Paris-based arbitration court saying that Ankara had breached its 1973 pipeline agreement with Baghdad.
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Iraq has released the entirety of Iran’s frozen assets, amounting to a total of $10 billion in gas debts, an official was quoted as saying by Tasnim news agency.

“The funds have been deposited into an account at the Trade Bank of Iraq (TBI) and will be utilized for the purchase of goods that are not subject to US sanctions,” Yahya al-Ishaq, Chairman of the Iran-Iraq Joint Chamber of Commerce, was quoted as saying on 3 July.

“Consequently, Iraq is no longer hindered in settling its debt arrears or conducting financial transactions with Iran,” he added.

As a result of US sanctions on Iranian energy, Iraq’s debts to the Islamic Republic – the leading source of the country’s gas supply – have been frozen for years.

Iraq had only been allowed to receive Iranian energy imports via waivers that extended up to 120 days, a policy implemented by former US president Donald Trump and kept in place by Joe Biden. The sanctions greatly hindered Iraq’s ability to make debt payments.

The US recently issued sanctions waivers to allow Baghdad to release frozen funds.
Last month, Ishaq announced that Iraq had released $2.76 billion worth of Iranian funds in gas export money owed by Baghdad.

Two weeks later, it was announced that the gas debt had been settled, but unspecified issues remained in transferring the funds from the TBI.

The release of the funds comes as Tehran has been involved in Omani-mediated talks with Washington over the possibility of reviving the 2015 nuclear agreement.

As part of these efforts, Iran’s Deputy Foreign Minister Ali Bagheri Kani met with EU mediator Enrique Mora in Doha on 22 June to discuss potential sanctions relief.

While it is unclear what progress has been made in recent nuclear talks, Tehran has repeatedly stressed its willingness to continue dialogue and cooperation.
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Iraq plans to increase oil production to more than five million barrels per day, according to the country’s parliamentary oil and gas committee.

The committee supports the government’s directions to increase oil and gas reserves and boost national crude oil and gas production by inviting foreign companies, committee member Zeinab Juma Al-Mousawi told the Iraqi News Agency.

She said the committee wants a conducive investment environment and more areas for exploration.
India, China and South Korea are the top buyers of Iraqi oil, making 54% of the total purchases since the start of 2023, Al-Mousawi added.

Saudi Arabia and the UAE have allocated $6 billion for investment in Iraq, said Abdul Razzak Al-Zuhairi, Chairman of Iraq’s Chambers’ Union.
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​Christian leaders and activists from five political parties have jointly issued a statement over large-scale real estate operations in the Christian stronghold of the Nineveh Plains, saying the move aims to change the demography and threaten the Christian heritage of the region.


Five political groups – the Assyrian Democratic Movement (Zowaa), the National Union of Beth Nahrain, the Abnaa al-Nahrain Party, the Assyrian National Party, and the Chaldean-Assyrian-Syriac Popular Council signed the document to denounce the plan for the Governorate of Nineveh, Fides news agency reported on June 21.


The region is a traditional home of various races and religions, especially Christian-majority Chaldean, Assyrian, and Syriac communities belonging to different churches.

​A major Christian political party "the Babylon Movement," which controls four of the five seats reserved for Christian deputies in the Iraqi parliament, did not endorse the document.


The statement said the groups have received information from official and community sources that the municipalities of Nineveh are promoting transactions for the sale and ownership of residential lands in the Talkeif district, one of the districts of the Nineveh Plains, to individuals who are not from the region and who are not of the Christian component, Fides reported.


The groups said these initiatives are “a clear violation” of the Constitution and the 2013 ruling of the Federal Supreme Court.


Referring to the constitution in its ruling, the top court prohibited any real estate acquisitions of land for housing with the aim of changing the demographic balance between the different components of the Iraqi population, the statement said.


The move is being carried out with “a sectarian mentality,” it stated.


The statement was addressed to the Prime Minister and the Minister of Construction, Housing Municipalities, and Public Works, asking them to intervene immediately and instruct the relevant authorities, in order to "halt any measures aimed at sorting and distributing lands in the areas of a historic settlement of the indigenous Christian communities in Iraq".


The groups also denounced the position of the local government which claimed it is necessary to establish new municipal departments and new administrative units in areas of the Nineveh Plains to promote the development of infrastructure and services.


The political parties said the move, in fact, aims to fuel the emigration of Christians and hinder the return of many Christians who had fled their home due to brutal persecution by the jihadist Islamic State (IS).


The document also called on Christians to counter racist and sectarian practices and mentalities "that undermine the foundations of harmony, peaceful coexistence, and genuine national partnership."


Christians in Iraq are believed to be one of the oldest continuous Christian communities in the world.


According to the tradition, St. Thomas the Apostle and his associates introduced Christianity in Iraq in the 1st century.


Prior to the Gulf War in 1991, Iraq was home to about one million Christians.


Media reports suggest due to anti-Christian violence during the Saddam Hussein regime, the number of Christians began to fall as many started to emigrate. Before the US invasion of Iraq in 2003, Christians accounted for about 800,000.


The war and the consequent emergence of the Islamic State intensified the persecution of Iraqi Christians, triggering a mass exodus to various countries.


Currently, Christians in Iraq number about 500,000, according to European Union’s Research Services.


The cities and villages of Nineveh Plains were once inhabited mainly by indigenous Christian communities. However, many areas were deserted due to the occupation of the Islamic State for about two years.


Though the jihadist group was gradually driven out, only about 45 percent of the original Christian community has returned to the Nineveh Plains, La Croix International reported on June 22.


There were 102,000 Christians living there in 2014. But their number has dwindled to 36,000 and is expected to plummet even further by 2024 due to political instability and lack of security, as well as family and economic reasons, the report stated.


Pope Francis visited Iraq on March 5-8, 2021.


During the visit, he visited the cities of Ur, the birthplace of Abraham, Baghdad, Najaf, Qaraqosh, Erbil, and Mosul, and prayed at the ruins of four churches destroyed by Islamic State militants.


The pope called on all religions to work for peace, tolerance, and co-existence.

The Iraqi Council of Representatives passed the 2023, 2024 and 2025 federal budgets on June 12, nearly eight months after Prime Minister Mohammad Shia al-Sudani’s new government was formed.
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This year’s budget is Iraq’s largest at 198.9 trillion Iraqi dinars, about $153bn based on the official exchange rate. The 2024 and 2025 budgets will be the same unless the cabinet requests any changes and Parliament approves them.

​​For the first time, the government took advantage of 2019’s financial management law, which allows for up to a three-year budget. Iraq has not only been slow at passing budgets, but three out of the past nine years also saw no budget passed at all – in 2014, 2020, 2022.

Although there is only half a year left to spend the 2023 budget, there is the reassurance that the next two years will be covered, guaranteeing the government a budget until the next federal elections in late 2025 and for provincial council elections scheduled for this year.

The federal budget also allows the government to fund local investment projects and hire hundreds of thousands of public sector employees, which reflects positively on the prime minister and his governing coalition and increases their electability in both upcoming elections.

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Ambitious yet precarious

However, Iraq’s economy and budget rely heavily on oil, which puts both in a precarious position. Nearly all state revenue is from oil sales. In 2022, Iraq earned a record $115.6bn from oil, but it is a volatile commodity. Iraq is not in control of the global oil market, and it is not a relevant decision-maker in OPEC despite being the second-largest member in terms of production.

This leaves Iraq vulnerable to the precarity of oil markets and the decision-making of other OPEC members regarding output, especially since this budget is based on an ambitious oil price of $70 a barrel. If the price dips, it risks unleashing a cascade of economic woes and public anger.

The budget calls for more than half a million Iraqis to be hired this year. It is not the first budget to include massive public sector hiring. Iraq is a country that already struggles with an overburdened public sector of at least 4.5 million employees.

Government offices are overcrowded and disorganised, slowing bureaucracy down further. Big hiring this year will also burden future governments with pensions.
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Iraq’s social contract, like many states in the region, is premised on public sector hiring, with citizens expecting a public sector job the moment they graduate from university. The right to a job is enshrined in Article 22 of Iraq’s 2005 constitution, and while it does not specify the type of job, it is a common belief that it means a government position.

The public sector has grown fourfold since 2003, and now salaries constitute more than a quarter of the 2023 budget.

Iraq’s political elite, which formed after the removal of Saddam Hussein in 2003, operates as though the country can still afford this set-up, and it does so for political gain. Most of its members had been exiled or based in the Kurdish region of Iraq and used patronage networks to build ties and legitimacy with the people in the new Iraqi state.

So millions of Iraqis were hired for the public sector, something they were accustomed to but with a new political patron to be grateful to.

Whether for electability or out of a belief in the right to a public sector job, even independent candidates and members of new political parties advocate for public sector hiring. Even the reformist political movement that emerged after the 2019 October protests is disincentivised from pursuing unpopular economic reforms, no matter how important they may be.

Two reforms often discussed by experts and rejected by the public are curbing public sector hiring and implementing more stringent taxation.

The protests, which took place from October 2019 to March 2020, called for economic opportunity, an end to corruption and political reforms. They resulted in early elections and a new electoral law but no systemic change to the political system itself.

To complicate matters further, protesters continue demanding employment and, in some instances, these protests are attended by the handful of independent MPs.
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To rebuild a nation

Infrastructure spending is a focus in the new budget, which allocates development and reconstruction funds in particular areas.

Like the Sinjar and Nineveh Plain reconstruction fund of 50 billion dinars ($38m) to reconstruct areas that were destroyed in the fight against ISIL (ISIS), there are also 100 billion dinars ($76m) allocated to the Baghdad municipal government for service projects in Karkh, the west bank of the Tigris, where the Darwish Bridge will be built, streets paved, and public spaces and parks rehabilitated.

Seventy-five billion dinars ($57m) are allocated for revitalizing marshes spread across two southern governorates.

In addition, there is a reconstruction fund for the poorest provinces with 500 billion dinars ($381m) aimed at improving services, such as infrastructure and access to healthcare, electricity and educational services. This is in addition to the existing reconstruction fund for areas that suffered under ISIL.

However, Iraq does not have the best record in spending its federal budget. The last budget passed in 2021 had a 79 percent execution rate and prioritised the payment of salaries and pensions.

Iraq is enjoying a record high in foreign reserves and no longer has to pay reparations to Kuwait for the 1990 invasion, but there is no vision for how to invest this wealth, and the budget still runs a deficit.

Enlarging the public sector actually contributes to further slowing Iraqi bureaucracy down, which holds back the implementation of development projects. To address this, economic reforms are necessary, but they are missing from the budget.

For example, there was no money allocated for the economic policy unit at the Prime Minister’s Office and, as a result, its director is seeking external funding in spite of Iraq just passing its largest budget ever.

The current government may simply be implementing the hiring promises of past governments, but there is no apparent justification for not embedding economic reforms into the budget law.

If a public hiring freeze or cap were to be enshrined in the law instead of having it mandated by an executive order from the Prime Minister’s Office, it would be harder to reverse.

The size of the budget makes it difficult for Iraq to seek development aid or foreign assistance for economic reforms. Improved security and growing stability in Iraq may be able to attract foreign investment, such as the $27bn TotalEnergies deal in Iraq, in which Qatar Energy has a 25 percent stake.

However, it will be difficult to prove to foreign investors that Iraq is a good bet without economic reforms and with a budget that is not significantly different from previous ones.

This is, of course, in addition to the fact that a budget this large is ripe for corruption, which further decreases foreign trust and interest in Iraq’s business environment. Iraq has long struggled with corruption, and experts estimate that $150bn to $300bn have been taken out of the country since 2003.

This budget, by virtue of covering three years, is forward-looking and emphasises infrastructure and reconstruction, which are positives. But its disregard for economic reforms will add pressure on future budgets and governments.
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BAGHDAD — When a pharmacist in Iraq told Umm Mohammed her prescription for a skin ailment would cost about 800,000 dinars ($611), she turned to cheaper natural remedies as some of her relatives had done.

In a herbal remedy shop, the 34-year-old mother-of-two found a treatment eight times cheaper. “Pharmacies are a disaster at the moment, poor people turn to medicinal herbs because of the prices,” she said. “Who can afford this? Should one die? So you turn to medicinal herbs.”

Ibrahim al-Jabouri, the shop’s owner and a professor of pharmacology, told Reuters that he is receiving customers suffering from various health issues, such as skin diseases, bowel troubles, colon infections or hair loss.

While some Iraqis choose alternative treatments out of conviction, others have no other choice as they can’t afford the cost of conventional medicines.

“The economic situation the country is passing through means that the cost of medicine is hard to bear especially for those with a limited income,” said Dr. Haider Sabah, who heads Iraq’s national center for herbal medicine, a regulatory state body affiliated to the Ministry of Health.

Iraq’s healthcare system, once one of the best in the Middle East, has been wrecked by conflict, international sanctions, the U.S.-led invasion of Iraq in 2003 and rampant corruption.

Although public medical services are free of charge, a lack of medicines, equipment and adequate services mean citizens often need to turn to the more expensive private sector.

In recent years, Sabah has seen more herbal centres open in the capital, Baghdad. There are now 460 establishments with a permit to sell herbal medicines, up from 350 in 2020, according to his database.

Standards vary greatly, from shops selling neatly packaged and licensed products in Baghdad’s better-off neighbourhoods to more traditional herbologists mixing plants scooped out of jars in front of customers.

“I inherited the job,” said Mohammed Sobhi, who followed in the footsteps of his brother and has sold remedies since the 1980s.

“The ones who can’t afford medicine don’t go to the doctor to begin with,” he added.

But replacing medical prescriptions with herbal products can be dangerous and result in harm for patients if not administered properly, said physician Ali Naser.

He recalled the case of a patient who had replaced his prescription with a herbal treatment and “reached the point of what we doctors refer to as diabetic ketoacidosis and the patient had to be admitted to the ICU,” Naser said.

At the heart of the problem is Iraq’s failure to establish an adequate medical system or regulatory framework for the country’s multitude of health service providers, he added.

According to Sabah, inspection teams monitoring establishments selling herbal medicines have closed down 10 for serious violations since 2019. “Most of the violations detected by the inspection teams are corrected,” he said.