Al-Sudani, who presented his government composition with an emphasis on forming a comprehensive cabinet, fighting corruption, prioritizing the economy and employment, reducing the inflation and ensuring economic growth, industrial development, and cherishing the environment and water resources, is facing various challenges ahead of fulfilling his promises. The experience of his predecessor Mustafa al-Kadhimi demonstrated that lacking a realistic understanding of Iraqi's conditions can perpetuate the crises and even intensify them. Like al-Kadhimi, al-Sudani is taking the office in the middle of a political crisis, accumulated economic problems, street unrest, and strained international atmosphere and should deal with a litany of unanswered popular demands.
In his speech delivered to the parliament, al-Sudani promised to implement economic reforms, fight corruption, improve public services, and eliminate poverty and unemployment. He also promised to amend the election law within three months and hold early parliamentary elections within next year. Here are the main challenges that Sudani's government has to deal with.
Economic problems and public services challenge
In the past decade, every government that assumed to power in Iraq
announced economy as its priority. This shows the high importance of
economic problems in the eyes of the people and in political and social
developments in the country.
According to the UN reports, one-third of Iraq's 42 million population live in poverty and face livelihood problems. Also, a large part of the educated young population is unemployed. Not long ago, Madhar Mohammad Saleh, the economic and financial adviser to al-Kadhimi, announced the unemployment rate at 16 percent. Also, the decrease of water resources, expansion of deserts, and the lack of public services in remote areas have led to an increase in migration from villages to cities, effectively leading to unemployment.
This comes while the Iraqi growth rate in recent years has been declining on average. In 2020 and amid coronavirus peak, the growth was minus 11 and , in parallel, the GDP dropped considerably, though the economy may post some improvement as a result of higher oil prices in recent months, amid predictions by the World Bank that suggest a 5.4 percent growth rate between 2022 and 2024.
A large part of the government's income is used to pay the
government's current expenses, especially the salaries of the government
employees and the import of goods, while the development of industrial
and welfare infrastructure, the reconstruction of worn-out
infrastructure, and rebuilding the destruction caused by anti-ISIS
battle require large resources.
Electricity outages are one of the main sources of public discontentment
in Iraq. On average, Iraq has grid power for just 2-5 hours a day, and
in the rest of the day, the citizens have to provide power using
generators, which foist on them excessive costs.
Ahmad Musa, the spokesman for the Iraqi Ministry of Electricity, recently reported that Iraq now produces more than 24,000 megawatts per day, however, 32,000 megawatts per day are needed to provide sustainable electricity throughout the country.
Iraq is a major gas importer despite its position as a world energy producer. The country with 1.67 percent of the world gas reserves, or 3.17 billion cubic meters, is the world's 11 gas reserves owner, but lack of infrastructure make it not only lose the export potential, but also become one of the major gas importers. It is mainly dependent on the neighboring Iran for its gas imports.
Meanwhile, some gas exploration and production projects given by the Ministry of Petroleum to foreign companies, including France's Total (worth of of $10 billion), are progressing slowly.
Also, rebuilding the destruction caused by battle against ISIS represents a big economic challenge to the new Iraqi government. The Council on Foreign Relations, an American think tank, in a report on challenges Iraq is facing said that post-ISIS Iraq has 2 million internally-displaced people and nearly 9 million people still rely on humanitarian aid due to the crisis caused by the long-time war in the country. The report adds that “reconstruction is projected to costs at least $88 billion.”
The administrative corruption beast
In recent years, Iraq has made its highest oil revenues in the past few
decades. In a report by Reuters, citing Iraqi government sources, the
country's oil income in the first half of 2022 was more than $60
billion. Also in March, Iraq announced that its oil revenues have
increased sharply and reached their highest level in the last 50 years.
In March, the Ministry of Oil recorded the sale of 100,563,999 barrels
worth of $11.7 billion— the highest revenues since 1972.
Despite these huge incomes, it seems that widespread corruption in the sizable government institutions will misappropriate these revenues.
Al-Sudani’s predecessors promised to fight against corruption as their top priorities but either were incapable of fulfilling their promises or their measures did not meet popular expectations.
Reduced political support and restive streets
Amid these piled-up challenges, the biggest threat to al-Sudani’s government is the tumultuous political and social situation out of which the government rose. Al-Sudani knows he has to head a government that its founding coalition is not a product of a consensus of major political forces in the parliament since 2003, and with resignation of Sadrist Movement's lawmakers en masse and Muqtada al-Sadr's rejection of participation in the new government, a politically strong and revisionist force is absent in the politics. Though the powerful Shiite cleric said he retired from the politics, experience of his erratic stances tell the new government should not be inattentive of his unpredictable actions.
In recent years, Iraq's streets have been always witness to
tensions and unrest, with the unstable economic conditions and
political tensions adding to the government's troubles in the streets.
What the streets declined to come to terms with is the government's
expectation of protesters’ patience for gradual improvement of
conditions.
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