February 18, 2021: The financial situation is very bad, so bad that it has the attention of senior government officials as well as populist religious leaders who have supported the continuing public, and sometimes violent, protests again corruption and misrule in general. The government budget for 2021 includes 20 percent deficit that is covered by expensive loans. Government income fluctuates depending on the sale price for oil and how much Iraq can produce. Because of the global covid19 recession the oil price fluctuated from the $33 to $43 a barrel in 2020. Iraq had to cut production to about three million BPD (Barrels Per Day) for much of 2020 to maintain its membership in OPEC (the oil cartel) and to make up for several instances of overproduction since late 2019.
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Iraq is more dependent on oil income than any other Gulf nation. Because of lower oil prices and lower oil demand the Iraqi GDP shrank eleven ten percent in 2020. The monthly government payroll is $4.5 billion and in 2020 oil income has only been able to cover about half of that. Much of the payroll spending is stolen and the government is under a lot of pressure to save money by making a serious effort to shut down the scams that steal as much as a third of the payroll costs. For most of 2020 the government was able borrow money to cover the monthly budget shortfall. But by late 2020 that the government was out of credit and millions of Iraqis were not getting paid on time. The situation improved a bit at the end of the year when oil price in December reached $48 a barrel.

The 2021 government budget avoided major spending reductions or reducing corruption and mainly depends on higher ($60 a barrel would be nice) oil prices to work. For too many Iraqi politicians that is seen as a more realistic solution than taking on the corruption problems involving who gets paid what by the government. Because of the continued corruption and deficit spending, recovery from the recession will take longer. GDP is expected to grow by 1.2 percent in 2021 and about four percent in 2022 and 2024. Before covid19 (2019) GDP was growing at 4.5 percent a year. The continued reluctance of government officials to deal with the corruption means the popular protests will continue.
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Dealing with problems involving Iran or Turkey are also being avoided. Iranian sponsored violence in Iraq or interference in the economy are opposed by most Iraqis. This does not motivate Iraqi politicians to act and that is causing more and more popular discontent. That’s fine with Iran because a government collapse would provide Iran with more opportunities to expand it control in Iraq.

Ramita Navai has been reporting for years on the rise of Shia militias in Iraq, their links to Iran and allegations of abuses carried out against Sunni civilians. In her latest documentary for FRONTLINE, Iraq’s Assassins, Navai investigates accusations that these militias have unleashed a wave of assassinations against activists and critics. In the runup to the film’s February 9 premiere, FRONTLINE spoke with Navai about her past reporting and what had changed when she returned to Iraq in September 2020.

What she found surprised her: “When I first covered [the militias], even though we were exposing Shia militia abuses, they were still very much seen as heroes, especially by the Shia population,” Navai said. “That has completely changed.” She says she wasn’t expecting “how, in these few years, they’re now viewed with absolute fear and they’re viewed as villains. They’re no longer seen as the heroes they once were.”
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Below, Navai discusses the mass protests in Iraq, the Iran-backed Shia militias now accused of killing their critics and why the militias view activists as a threat.
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This interview has been edited for length and clarity.

Since the formation of the new system of governance in Iraq in 2003 immediately after the fall of Saddam Hussein there have been a slew of problems between the Federal Government of Iraq (FGI), centred in Baghdad, and the semi-autonomous Kurdistan Region of Iraq (KRI), governed in large part by its government (the KRG) based in Erbil. Back then in 2003/4 it was broadly agreed that the KRG would export a certain volume of oil from its own fields and Kirkuk via the FGI’s State Oil Marketing Organization (SOMO) and would absolutely not independently sell oil from the fields on the international markets.

In return, the FGI from Baghdad would disburse a certain level of payments to the KRG from Iraq’s central budget. From that point to this there has been near constant dispute over this arrangement but the latest one seriously threatens the decisive splitting of the FGI ad KRI into two completely separate regions, as had also been promised to the KRI by the U.S. in exchange for its army (the Peshmerga) agreeing to be the West’s boots-on-the-ground fighting force against the Islamic State insurgence from 2014.

According to reports from Iraq, the KRI’s government, the KRG, is currently in the process of preparing its own separate annual budget for the first time since a new working budget agreement was agreed in November 2014 between it and the Baghdad-based government of the FGI. The November 2014 agreement required that the KRG would agree to export up to 550,000 barrels per day (bpd) of oil from its own fields and Kirkuk via SOMO and, in return, Baghdad would send 17 per cent of the federal budget after sovereign expenses (around US$500 million at that time) per month in budget payments to the KRG.

​This would allow the KRG to pay the expenses of the semi-autonomous government, most notably the salaries of the large number of direct and indirect KRG employees, plus all other expenses. This 2014 agreement, which functioned properly only sporadically, was then superseded by an understanding reached between the KRG and the new government of the FGI formed in October 2018 centred on the 2019 national budget bill. This required the FGI in Baghdad to transfer sufficient funds from the budget to pay the salaries of KRG employees along with other financial compensation in exchange for the KRG handing over responsibility for the export of at least 250,000 bpd of crude oil to SOMO. Shortly thereafter, though, the FGI – nominally headed at that point by Prime Minister Adil Abdul-Mahdi but controlled behind the scenes by radical cleric Moqtada a-Sadr – started to deliver the funding for the salaries of the KRG employees on a monthly basis, and after that he KRG started to deliver the agreed upon volume of oil to SOMO on a more ad hoc basis. This has been the pattern ever since.

Refugees at Jedaa Camp say they are being forced to evacuate as nearly 24,00 families stare down an uncertain future amid a pandemic.

​​Thousands of internally displaced people (IDPs) in Iraq are worried they will be forced to leave their camp in the northern Nineveh province, which hosts nearly 2,400 families, rights groups and refugees have told Al Jazeera.

Tens of thousands of Iraqis took shelter in refugee camps in Nineveh province, forced from their homes by the war against the ISIL (ISIS) armed group. ISIL was defeated in 2017 nearly three years after it took over large swaths of Iraq and neighbouring Syria.

​Most of the camps in the province have since been shut down but Jedaa Camp, about 65 kilometres (40 miles) south of Mosul city, still hosts refugees who are afraid to go back to their homes because of the security situation.

Special Representative of the UN Secretary-General for Iraq Jeanine Hennis-Plasschaert is facing a fierce wave of criticism over her latest two-day visit to Tehran. Many are demanding her sacking and accusing the UN mission of validating election fraud in the Levantine country.

Despite the United Nations Assistance Mission for Iraq (UNAMI) office in Baghdad confirming to Asharq Al-Awsat that it operates private bureaus in Tehran and other neighboring countries, observers noted that Plasschaert’s visit to Tehran has stirred doubts about the nature of the role played by the mission.

Local media and critics in Baghdad are questioning whether or not UNAMI’s work should involve visiting Iraq’s regional neighbors.

UNAMI said it runs offices across the region because of the great influence geopolitics has over Iraq.

Iraq’s leaders, fearing defeat in planned June vote, manoeuvred to delay the election to buy time, an analyst says.

Iraq’s leaders pushed to postpone parliamentary elections fearing public discontent would lead to their removal from power, an analyst with ties to the government says.
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Prime Minister Mustafa al-Kadhimi, President Barham Salih, and Speaker of the Parliament Mohammad al-Halbusi wanted a later vote over concerns about their prospects for re-election and sought to buy time, said Mohammad Bakhtiar, a Kurdish political analyst who meets regularly with Iraqi decision-makers.

​“At least two of the three leaders of Iraq who favoured early election have realised that their chances of being re-elected are minimal,” Bakhtiar said.

Iraqis suspect Turkey of eyeing the establishment of permanent military bases on their soil.

​Turkish Defence Minister Hulusi Akar began an official visit to Iraq on Monday that observers considered an extension of Turkey’s efforts to impose its security and military equation on Iraq.

This equation, which Ankara has already started implementing on the ground, is based on making Iraqi territories an advanced line of defence for Turkish security and a battleground for Turkey’s war against Kurdistan Workers’ Party (PKK) militants.

Ankara is counting on imposing its equation by force through the intensification of its military operations inside Iraq and the expansion of these operations beyond the border areas inside Iraq.

Iraq announced two deals with countries that Iran hopes can be gradually moved further into its sphere of influence. One of the two, Lebanon, is already seen by Tehran as a key player in the Shia crescent of power that it has been meticulously developing for years - as a counterpoint to the U.S.’s own sphere of influence centred on Saudi Arabia - that stretches from Syria and Lebanon through Iraq and Iran and then south into Yemen.

According to comments last week from Iraq’s new Oil Minister, Ihsan Abdul Jabbar, following a meeting in Baghdad with his Lebanon counterpart, Raymond Ghajar, Iraq will begin exporting fuel to Lebanon this month.

​The geopolitical imperative underpinning this announcement cannot be overstated, given that Iraq itself suffered from extreme power shortages over the summer and remains subject to intermittent power failures in various regions.

So poor is Iraq’s own ability to generate sufficient power for its needs – based on any sort of fuel – that it is locked in to a rolling electricity and gas import deal with Iran that has been the source of extreme friction between it and the U.S. for years. Without any apparent hint of irony, Iraq’s Jabbar stated at the time of announcing the new arrangement with Lebanon last week: “The exported fuel [is] expected to cover the requirements of the Lebanese power stations to generate electricity.”

Iranian Energy Minister Reza Ardakanian has highlighted Tehran and Baghdad’s determination to raise the value of annual trade exchanges to $20 billion, pointing to the major role that the private sectors and a joint investment fund could play in working towards that goal.

Delivering a speech to Iran-Iraq Economic Conference on Tuesday, Ardakanian said the main and common target of the two neighbors at the level of political leaders is to increase the value of annual bilateral trade exchanges to $20 billion.

The energy minister explained that achievement of the trade target requires plans to allow the private sector to get involved in the economic activities freely, remove the trade obstacles, set up a joint investment fund, and settle the problems arising in the transportation industry, standard and customs issues, or the preferential trade arrangements.
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The Iranian Energy Ministry has been tasked three months ago with handling the affairs of Iran-Iraq Economic Cooperation Joint Commission, he noted, saying the first successful plan was to convene the commission after six years.

Iraq denounced on Saturday as “unacceptable” a U.S. decision to blacklist the leader of a state umbrella group for mainly Iran-backed Shi’ite militia.

Washington imposed sanctions on Friday on Faleh al-Fayyad, head of Iraq’s Popular Mobilisation Forces (PMF).
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The U.S. Treasury accused him of leading militia that killed hundreds of protesters with live ammunition during a crackdown on anti-government demonstrations in 2019. It said he had coordinated with Iran’s Revolutionary Guards.

​“We confirm that the decision was an unacceptable surprise,” the Iraqi Foreign Ministry said in a statement, adding that “it will carefully follow up with the current and the new administration in Washington on all decisions issued by the U.S. Treasury Department against Iraqis.”