I recently mentioned that the situation in Anbar could have a negative impact on the Iraq economy. The International Center for Development Studies (ICDS) based in the United Kingdom warned that the Iraq government would be bankrupt in three years. The military operation in Anbar, are currently fighting the terrorists. It is costing the Iraq government 7 million dollars a day.
The current deficit according to (ICDS) is approximately 50 billion dollars and the Iraq government runs the risk of Bankruptcy in 2017. Currently, the Iraq government is unable to pay the salaries of their employees as well as the salaries of the Kurdistan Regional Government (KRG).
As of now, the February salary payments will be paid. There are only half the funds available for the government employees for March.
Major oil companies are voicing their concerns about the security and the economy situation and could possibly leave the country. Leaving Iraq with lower production of oil and lacking the experience to produce more.
The U.K report stated that the $50 billion dollar deficit is unjustified as the Iraq budget was based on $90 oil prices and the oil price has not been lower than $100. It appears that maybe some corruption is involved in stealing the state money.
There is a new class according to the U.K. report of rich people currently in Iraq. This upper class are benefiting from their relationship with the Iraq government.
It was reported a few days ago that this group of people wanted to have private jets at the Baghdad airport. The Ministry of Transportation (MoT) has approved the sale of these private jets and they are going to be paid for by government funds.
Economists are surprised that the Iraq government can have a budget and never have to reveal the actual expenditures.
The Iraq government has not published the reports on their spending in their government accounts since 2004.
American Contractor will continue to monitor the situation and report on what is happening in Iraq. Iraq will eventually get past all of these issues. It may just take a little longer than we all anticipated.