photo: Eddy van Wessel


Sunday, March 27, 2016

Cutting Iraq’s excessive fat is not enough

Iraq is like a fat man who desperately needs to lose weight - was the image the Iraqi minister of Oil, Adil Abdulmahdi painted during the recent Sulaimani Forum of the American University (AUIS).

It was an image that stuck, in relation to what the economic world calls the Dutch disease, or how a country that earns big on oil, neglects to work on incentives to build a strong private sector. A disease that has brought Iraq into serious problems when the oil prices went down to an all-time low.

The fat is made up by the 7 million employees of the Iraqi state, gone up from a mere 850,000 in 2004, said the Iraqi minister. “Fat people have less energy and more health problems. If we do not get rid of this fat, we will go down a bad road.”

He was calling for major reforms, repeating what has been said by many: that now is the correct moment to do so. Meaning that if the painful task of cutting government jobs is not conducted at a time that the state is suffering from budget deficits, it will never happen once the oil price goes up again and the need for reform becomes less pressing. Read more here

No comments: