Exclusive: Iraqi government draws up roadmap to save salaries; Hormuz alternative ready
Exclusive: Iraqi government draws up roadmap to save salaries; Hormuz alternative ready
2026-08-11
Shafaq News – Baghdad
On Tuesday, the Prime Minister’s financial and economic advisor, Mazhar Muhammad Salih, explained the reasons for the government’s continued assurances regarding securing employee salaries in light of the ongoing Strait of Hormuz crisis and the halt in oil exports.
Saleh told Shafaq News Agency: “In line with the Iraqi government’s confirmation on every occasion that the salaries of employees and retirees are secure and not at risk, despite the repercussions of the Strait of Hormuz crisis and the decline in oil exports, this means that the state, even under the current circumstances, still possesses the liquidity and financial tools that enable it to meet its basic obligations.”
He added that the picture does not necessarily look bleak in the long term, as the continuation of the Hormuz crisis will push Iraq, as expected, to increase its reliance on alternative export routes and develop pipeline capacities that can transport oil away from the strait.
He pointed out that “the Kirkuk-Ceyhan pipeline, along with other projects and plans to expand the export network north and west, constitutes one of the most important options available to Iraq, and over time, these routes can accommodate larger quantities of oil, which will help to recover an important part of the revenues that the treasury lost due to the disruption of the southern export route.”
From this perspective, Al-Zaidi’s advisor pointed out that the Hormuz crisis may push Iraq to accelerate a step it already needed, which is to diversify its oil export outlets and not rely on a single route. The more export routes there are, the more capable the Iraqi economy will be of dealing with sudden regional crises.
As for salaries and pensions, Saleh explained that the government’s ability to secure them depends not only on the continued flow of oil through Hormuz, but also on its available liquidity, other non-oil revenues, and the possibility of rearranging spending and using available financial tools.
He stressed that “the continuation of the crisis does not necessarily mean entering into a salary crisis, and it is likely that salaries will remain at the forefront of government spending priorities, while financial pressures are being dealt with through managing expenditures and activating oil alternatives.”
The Prime Minister’s financial and economic advisor concluded by saying that “salaries are secured in the present, and the bet for the future is to boost revenues and diversify oil export methods, which will give Iraqi finances a greater space of security and stability.”
This comes as the crisis of delayed salary payments for a number of Iraqi state employees has exceeded 40 days, and a large segment of workers in government institutions are still waiting for their financial entitlements, amidst accumulated living obligations and increasing economic pressures that have begun to be clearly reflected in Iraqi markets.
With the ongoing liquidity crisis acknowledged by the Iraqi government, the problem of delayed salaries has transformed from a financial matter within the Ministry of Finance into a daily crisis affecting buying and selling activity and the ability of families to meet their basic needs, amid fears that markets will enter a longer recession if pressures on government spending continue.
These developments come at a time when the Iraqi budget is facing increasing pressure due to declining oil revenues and disrupted exports, while operating expenses continue to rise, with monthly salary obligations amounting to about 7.8 trillion Iraqi dinars, while the government has not yet been able to provide the full amounts required.
The Ministry of Finance had announced the provision of approximately 3.2 trillion dinars to disburse part of the obligations, at a time when government estimates indicate a large cash gap that affected the timing of the release of dues to a number of ministries and public entities.
shafaq.com
