A farewell to arms

June 5, 2015   |   Category: Prophecy News   |   Tags:

THE Iraqi prime minister, Haider Abadi, faces many problems in fighting Islamic State (IS), but funding is among the biggest. The costs of war spiralled to an estimated $23 billion in 2015 even as oil prices, on which Iraq depends for the bulk of its revenues, have halved. In Paris on June 2nd for a meeting of his coalition partners, Mr Abadi said he had run out of cash for fresh arms contracts. Red tape compounds the problem, hampering deliveries of previous orders. A consignment from Russia had been stalled by sanctions against that country, Mr Abadi said. And while he says America has given him the nod to accept supplies from Iran, his request for a formal United Nations exemption from the Iran sanctions regime has not been met.

 

Iraq’s south is largely stable, and it had hoped to keep the money flowing by tapping its oil reserves, the world’s second-largest. This month Iraq is set to export a record 3.75m barrels per day (bpd). But the heavily state-controlled oil sector needs substantial investment to meet its advertised target of 8m bpd by 2020, and the government lacks the necessary funds. Iraq’s rampant corruption mattered less when the regime was awash with revenues, but now, the funding for its patronage base is shrinking. Even footing the bill for the 6m Iraqis on the government payroll has become problematic. “We don’t know if we can pay next month’s salaries,” says a senior finance official.

 

Read More: A farewell to arms | The Economist

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