Iraq, Struggling to Pay Debts and Salaries, Plunges Into Economic Crisis

With its economy hammered by the pandemic and plunging oil and gas prices, which account for 90 percent of government revenue, Iraq was unable to pay government workers for months at a time last year, the New York Times reported. Last month, Iraq devalued its currency, the dinar, for the first time in decades, immediately raising prices on almost everything in a country that relies heavily on imports. And last week, Iran cut Iraq’s supply of electricity and natural gas, citing nonpayment, leaving large parts of the country in the dark for hours a day. “I think it’s dire,” said Ahmed Tabaqchali, an investment banker and senior fellow at the Iraq-based Institute of Regional and International Studies. “Expenditures are way above Iraq’s income.” The financial crisis threatens to destabilize the country, whose government was ousted a year ago after mass protests over corruption and unemployment. Read more.