From Al Jazeera. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.
After months of anti-government protests and political uncertainty, Iraq is now grappling with its worst fiscal crisis in decades.
The country’s economy and state budget are heavily reliant on oil income, and have been hit hard by the sharp decline in global oil prices.
The World Bank has projected Iraq’s GDP to contract by 9.7 percent, with the fiscal deficit expected to reach almost 30 percent of GDP. Iraq’s newly appointed government, led by Mustafa al-Kadhimi, is now faced with a challenging task of implementing long-overdue structural reforms, such as reducing public sector employment while also keeping popular unrest at bay.
But what are the root causes of the current economic crisis and what needs to be done to tackle it? And how can the new government overcome entrenched political interests that oppose reform while also winning over a public that has lost all trust in the political establishment?
Ramzi Neman, the World Bank’s special representative to Iraq, talks to Al Jazeera: