During past crises, Iraq turned to America and Iran for help. But now the two are focused on fighting each other
, the vast shantytown east of Baghdad, cars still pack the roads, pilgrims still pray at shrines and people still gather in shops. Many see covid-19 as either a Zionist hoax or a fast track to paradise, so they feel no obligation to comply with the government’s order to stay inside. The government itself seems unprepared. Iraq claims to have just 1,122 cases of the virus, but it is accused of minimising the number. Its public hospitals are not equipped to handle a big outbreak.
If the virus were Iraq’s only problem, that would be enough. Alas, the country is nearly bankrupt—the result of a precipitous decline in the price of oil, which supplies more than 90% of government revenue. Its politics are also a mess, with parties unable to agree on a new prime minister. Iraq’s militias are running amok, while the jihadists of Islamic State regroup. America and Iran, which helped Iraq muddle through past crises, are focused on fighting each other.
Saudi Arabia and Russia are in talks over oil-production cuts, which would provide some relief to Iraq by raising prices. But even if the price of oil jumps by half, Iraq would still be looking at a sizeable budget deficit. As it is, the government cannot afford to pay salaries in the ever-expanding public sector . It has around $60bn in cash reserves, but that could run out by the end of the year, leaving it dependent on a loan from the, which may not be forthcoming.
That may sound alarmist, but Iraq does not have much of a private sector to fall back on. Many firms rely on government contracts. Much of the sector is informal. With a curfew in place, travel restricted and the borders closed, commerce has slowed considerably. Even before the virus, many Iraqis struggled to get by. Such hardship, along with blatant corruption, sparked big protests, beginning last year.
Those have largely subsided as people keep their distance from each other. But Iraq’s politicians are not taking advantage of the calm. Since the prime minister, Adel Abdul-Mahdi, resigned in November, two men have been put forward to take his place. The first, Muhammad Allawi, failed to gain the backing of important Shia parties and their associated militias.
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