Many questions and question marks are raised about what Mazhar Muhammad Salih, the economic advisor to the Iraqi Prime Minister, revealed that the public debt of Iraq is approximately $70 billion, at a time when the government asserts that it has a cash reserve of more than $100 billion, which raises questions about the reason that prevents the government from To pay off its debts and get rid of the interest owed by it.

Official numbers

Speaking to Al-Jazeera Net, Saleh confirmed that the country's public debt amounts to 70 billion dollars, including internal debts estimated at 50 billion dollars, and that its possession belongs to the Iraqi banking system, pointing out that 63% of the internal public debt belongs to the Central Bank of Iraq, and that it represents local assets. In the structure of the balance sheet of the Central Bank, as for the remainder of the internal debt, it is in the possession of the three government banks (Al-Rafidain, Al-Rasheed, and the Iraqi Commercial Bank) with an annual interest ranging between 2-3%.

As for the external public debt, Saleh explained, "The effective external debt that must be repaid does not exceed $20 billion, which means that the total public debt is currently estimated at $70 billion, and it only constitutes 30-35% of GDP." For the country, which is a very safe percentage compared to the international benchmark of 60%.

Commenting on what the economic advisor said, Professor of Economics at the Iraqi University, Abd al-Rahman al-Mashhadani, confirms the validity of the government figures regarding Iraq's public debt, whether internal or external, explaining that the main problem of Iraq's debts is represented by the internal ones, he said.

Mazhar Muhammad Salih: Iraq's public debt amounts to 70 billion dollars, including 50 billion dollars in internal debts (communication sites)

external debt

The size of the Iraqi government's external debt raises many questions about the reason for not paying it, although the government has a comfortable financial surplus and a large reserve. In this regard, Al-Mashhadani tells Al-Jazeera Net that Iraq's external debt is not currently effective, given that the Japanese, Korean and Chinese loans are long. The term reaches until 2040 with low interest rates that do not exceed 1%, pointing out that the volume of World Bank and International Monetary Fund loans to Iraq does not exceed two billion dollars each, with simple interest rates and for good periods of time.

For his part, the economist Mustafa Akram Hantoush confirms that the external debt due for payment for this year 2023 does not exceed $3 billion, and that the rest of the external debt is scheduled for many years, and therefore the external debt is not considered a shackle to Iraq at the present time and does not pose a danger due to the low interest rates. , according to him.

internal debt

Speaking to Al-Jazeera Net, Hantoush believes that there is a fallacy in the statements of the economic advisor to the Prime Minister regarding the percentage of internal debts belonging to the Central Bank, indicating that the Central Bank had given the government treasury bonds of $ 20 billion when oil prices fell in 2020, as the government deliberately sold These bonds were converted into funds with which the salaries of employees were paid, pointing out that the government returned funds to the Central Bank estimated at about $35 billion without deducting them from the debt list until now.

In the meantime, returning to Al-Mashhadani, where he believes that the main problem of debt is internal due to its large interest rates, indicating that it sometimes reaches high numbers, which requires the government to pay the debts of the Central Bank to get rid of its interest, according to him.

Hantoush: Iraq lost 300 billion dollars as a result of poor management of state budgets (Al-Jazeera)

Positive indicators

The large reserves of the Central Bank and the public debt incurred by Iraq raise many indications, which was confirmed by the economic advisor to the Prime Minister, who believes that the volume of foreign reserves in Iraq is “high” and that it covers the country’s external debt obligations by 5 times, describing this ratio as “high standard.” And reassuring", in addition to reflecting the strength of the country's financial situation, indicating that the procedures for repayment of internal and external debts are carried out through annual allocations approved in the country's federal budget according to the ratios that are set in advance in line with financial imports.

Reliance on oil only

Despite the indications that the government advisor sees as reassuring, economics professor Abd al-Rahman al-Mashhadani believes otherwise, as he describes all figures related to reserves and internal and external debt as "not reassuring" given that Iraq does not have financial revenues other than oil, indicating that Iraq He entered into what is known economically as the term "Dutch disease", which means the country's dependence on oil revenues only without the presence of any other influential revenues.

Al-Mashhadani continues, commenting, "The number of employees in Iraq is now approximately 4.5 million, after the wave of appointments that the government is currently working on, in addition to 500,000 employees in self-financing companies that receive government salaries, with 4 million retirees, and 3 million beneficiaries of the social welfare network, and thus The total number of those who receive salaries from the state is about 12 million Iraqis,” noting that if the Iraqi family is considered to consist of 5 members, the total number will exceed the number of the population of Iraq, which means that all Iraqis depend on government salaries for their livelihood.

A member of the Parliamentary Finance Committee, Jamal Cougar, agrees with this opinion, who added to Al-Jazeera Net that the salaries of employees burden the budget, pointing out that they amounted to about 54 trillion dinars ($36.7 billion) in 2021, then the Al-Kazemi government added about 10 trillion dinars ($680 million) to it. ), while the current government will add the cost, which means that the salaries of employees alone will be approximately 70 trillion dinars ($47.6 billion), according to Cougar.

Al-Mashhadani: Most Iraqis depend on government salaries for their livelihood (Al-Jazeera)

Reserve management

The figures he revealed as cash reserves and public debts illustrate a lot of controversy about the method that must be approved by the government to manage the state’s imports, which is what the economic advisor indicates by saying, “Iraq’s fiscal policy tends to adopt financial discipline, which means gradually reducing the total accumulated public debt, This corresponds to reducing the annual deficit in the federal general budget, while working to limit the debt created within the standard ratios, so that the public debt does not exceed 3% annually.

For her part, the economist Salam Sumaisem believes that the Iraqi cash reserve needs prudent management in order to be able to reconcile the state's imports with what it needs to cover operational and investment expenses.

In her interview with Al-Jazeera Net, Sumaisem pointed out that there is a global financial crisis, and since Iraq is an importing country, it will be affected, which requires the government to manage the financial file and debt wisely in order to manage the general budget deficit, the trade balance deficit, and the payments deficit in order to avoid any financial crisis that the country may face. .

For his part, Hantoush believes that the problem lies in the fact that the country's fiscal surplus exceeds $25 billion, and that a strategic fund must be formed to support the state in the event of a drop in oil prices, similar to many neighboring oil countries that used it at the time of the crisis.