Iraq’s government spending has exceeded that of several more economically diversified nations, despite the country’s continued dependence on oil and ongoing economic stagnation. According to Manar Al-Obaidi, the head of the Iraq Future Foundation, this trend highlights Iraq’s financial imbalance.
Over the past decade, Iraq’s total revenues have amounted to 1,028 trillion Iraqi dinars ($784.4 million), with a staggering 92% of these revenues coming from oil. Only 8% has been generated through taxes, customs, and other sources. Meanwhile, government spending during the same period has reached 1,007 trillion dinars ($768.4 million). Additionally, unsettled advances between 100-150 trillion dinars ($114.5 billion) have pushed total expenditures beyond 1,100 trillion dinars (around $1 trillion).
Iraq’s annual budget of approximately $100 billion far exceeds that of several nations with more diversified economies. For comparison, the UAE spends $65 billion annually, Malaysia $82 billion, and Singapore $77 billion. These nations have also developed economies with annual GDPs around $500 billion. Despite Iraq’s vast natural resources and a large population, it remains trapped in a cycle of oil dependency, chronic financial mismanagement, and high unemployment.
Al-Obaidi pointed out that these countries, unlike Iraq, do not rely on abundant natural resources. Yet, they have managed to build thriving economies with significantly smaller budgets. In contrast, Iraq continues to face the challenges of financial instability and underperformance. “The problem has never been a lack of resources but rather how they are managed,” Al-Obaidi explained.
He further stressed that unless urgent reforms are implemented, Iraq’s reliance on a rentier economy will only deepen the country’s financial difficulties. Al-Obaidi advocated for the diversification of the economy, better management of spending, and the elimination of financial waste to ensure long-term economic stability.
In his conclusion, Al-Obaidi emphasized that Iraq’s success depends on “a stable government to improve development management.” Without this stability, he warned, the country could face systemic failure. The need for effective governance and sound economic planning has never been more urgent.