BY: Shatha Kalel
The speech delivered by Iraq’s new Prime Minister, Ali Al-Zaidi, was not merely an announcement of a new government program. Rather, it carried significant economic and political messages that reflect the magnitude of the challenges facing the Iraqi state at a critical moment in its history. When the government speaks about comprehensive economic reform, combating corruption, stimulating investment, and supporting the private sector, it is implicitly acknowledging that Iraq is not facing a temporary financial crisis, but rather a deep structural crisis that has accumulated over many years and has weakened the country’s ability to achieve sustainable development.
Today, Iraq remains heavily dependent on oil revenues to finance its national budget, while other productive sectors continue to play only a limited role in the economy. Economically, this is known as a rentier economy, a model that ties the future of the state more closely to fluctuations in global oil prices than to production, investment, and innovation. As the world rapidly moves toward alternative energy sources and advanced technologies, the long-term sustainability of this model becomes increasingly uncertain.
This is why the government’s emphasis on supporting the private sector is particularly important. The issue is not simply about encouraging entrepreneurs or attracting investors; it is about redefining the relationship between the state and the economy. Governments cannot indefinitely absorb hundreds of thousands of young people into the public sector, while Iraq must create new employment opportunities every year for growing numbers of graduates and job seekers. Building a productive economy capable of generating added value is therefore no longer an option but a strategic necessity.
However, corruption remains the most significant and complex challenge. In Iraq, corruption is no longer limited to administrative violations or isolated cases of misconduct. It has evolved into an interconnected system that has undermined institutional efficiency, drained public resources, and weakened the confidence of both citizens and investors. For this reason, the success of any genuine reform effort should not be measured by the number of public statements or temporary committees, but by the government’s ability to establish strong oversight and institutional mechanisms capable of identifying weaknesses, holding officials accountable, and closing the loopholes that allow corruption to persist.
If the government is serious about addressing this issue, it must move beyond pursuing individual cases and instead undertake a comprehensive review of state performance since 2003. Genuine reform begins with understanding what happened over the past two decades, how enormous public budgets were spent, and what tangible results were achieved. This highlights the need for an independent national body composed of economic, financial, legal, and technical experts to evaluate government projects, review public spending, and assess institutional performance across ministries and provinces.
The purpose of such a review extends beyond identifying wasted funds or assigning responsibility. It must also measure the true economic cost of corruption. Every stalled project, every inflated contract, and every lost investment opportunity resulting from poor management represents a direct loss in economic growth, employment opportunities, and public services. In other words, corruption does not merely steal money; it steals years of development that could have transformed the lives of millions of citizens.
Such a review would also allow for a thorough evaluation of government policies and administrative leadership during previous periods. It would help determine whether senior positions were awarded based on competence and expertise or on political quotas and partisan affiliations. This issue is one of the fundamental keys to long-term reform because building a strong state begins with building institutions led by qualified professionals.
Politically, this path is just as important as it is economically. Nations are not judged solely by the size of their resources but by their ability to manage those resources efficiently, fairly, and transparently. The higher the levels of accountability and good governance, the greater the public’s trust in government, and the stronger Iraq’s ability to attract investment and build meaningful economic partnerships with the international community.
Today, Iraq stands before a historic opportunity that may not come again soon. The country can either transform reform into a genuine nation-building project that strengthens institutions, reduces excessive dependence on oil, and lays the foundations for sustainable development, or reforms may remain confined to promises and slogans. Ultimately, the question that will determine Iraq’s future is not how much natural wealth it possesses, but how effectively it manages that wealth and transforms it from a temporary source of income into the foundation of a strong economy and a capable institutional state prepared to meet the challenges of the future.
Economic Studies Unit – North America Office
Center for Linkage Studies and Strategic Research