(MENAFN- The Journal Of Turkish Weekly) Despite possessing the fifth largest oil reserves in the world, Iraq is facing a worsening economic crisis.
Huge increases in army expenditures to combat Daesh combined with decreasing international oil prices has forced the Iraqi government to delay paying its debts international debts, which are estimated to range in the billions of dollars.
The ongoing war against Daesh, which controls large swathes of northern and western Iraq, is consuming vast amounts of funding.
Falah Hasan, an economic analyst with the Ministry of Planning, says that the economic crisis started in 2003, with a minimal impact on the economy due to high oil prices at the time, which was at 100 dollars per barrel.
The drastic decrease in oil prices, with prices falling by half, has played a large part in the current economic crisis.
"The current crisis is because of mismanagement and corruption, a lack of strategic planning for more than twelve years, and depending on one resource only. There is no internal economy and manufacturing is paralyzed because of a lack of electricity," Hasan told Anadolu Agency.
He cites the electricity sector as an example, as it has consumed billions of dollars in investment but to avail due to corruption and mismanagement.
Mohamad Hamidi, a member of the Iraqi parliament, said that the energy committee has proposed many recommendations to overcome the electricity crisis.
The recommendations include placing the committee under the prime minister's control so that he can coordinate relations between the relevant ministries and supply the necessary technocrats.
It also recommends opening the gates to well-known, international companies to establish new electricity plants, and obliging the concerned ministries to promptly provide the necessary funding for these projects.
Iraqi Prime Minister Haider al-Abadi recently announced that the country's revenues in the first half of 2015 were $23 billion, but did not mention its expenditures.
Due to the budget deficit, the Ministry of Planning halted 9,000 projects across Iraq and the government issued a law allowing external government borrowing.
Sarhan Ahmad, a member of the Iraqi parliament's economic committee, said that the 2015 budget law determined the methods to be used to overcome the current crisis: borrowing from the IMF and World Bank; issuing local or international bonds; and increasing the taxes on imported goods.
Over the past few weeks, Abadi's government has issued millions of dollars worth of local and international bonds and increased taxes on imported goods.
These policies led to large protests in the majority of the central and southern governorates.
Ahmad says the budget deficit will not be closed "without countering corruption in the country and applying accountability."
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