Al-Zaydi’s three options
Al-Zaydi’s three options
2026-10-12 00:22
Dr. Shwan Zangana
Mr. Ali Al-Zaidi, the Iraqi Prime Minister, revealed the reasons for the decision regarding the contraction of the Iraqi currency, in a session he attended in the Iraqi Parliament. He stated that he was faced with three options, the best of which was bitter: either to extend the time gap for employee salaries to 45 days, instead of the usual period, or to deduct 30% from employee salaries as a mandatory savings, or to borrow externally.
In fact, he is not correct in what he says. The flaw and error in his diagnosis may be due to his ignorance and lack of administrative and economic experience, or poor guidance from his advisors, or his desire to choose the easiest option, like those who came before him, or his haste in anticipating events, so he stumbled in making the decision to change the price of the national currency.
The first and second options are feasible and have been practiced by many governments, but they are unfair because they place the burdens, sins, and corruption of all previous and current governments on the employees and retirees only. This contradicts the rules of justice and the provisions of the Iraqi constitution. However, al-Zaydi could have deducted 10% or more from the salaries of senior employees, those with special grades, or those whose salary exceeds 1.5 million Iraqi dinars. Note that this option is a popular demand that al-Zaydi could exploit to enhance his popularity.
As for the third option, which is borrowing, it seems to have overlooked the fact that the ratio of public debt (internal and external) to GDP does not exceed 40%, a ratio that is internationally classified as within safe and moderate limits. This ratio is 126% in America, 80% in China, and 230% in Japan.
It is clear that the option of borrowing was open to the Al-Zaidi government, so why did Al-Zaidi not use this option?
Burdening the budget with debt is a bad option, certainly, but it is a better option than the decision to shrink the national currency, which will result in higher inflation rates and a high cost of living, while the direct impact of borrowing is limited to the budget only. This option was, and still is, wide open to the Al-Zidi government, and everything he said in this regard is deception and half-truths.
I am not here to explain and reveal the many options that Al-Zaydi can choose, as he and his advisory team are well aware of that, and most of them are feasible options, but I limited my commentary to the three options that he claimed and mentioned in the House of Representatives.
Al-Zaydi claims that he inherited a government mired in debt and a rentier economy with a flawed structure and infrastructure, and he is truthful in what he claims. So, in this situation, is it not his responsibility to have begun his work by putting in place a real economic program, not just ink on paper like the programs of his predecessors, through which he would restructure and reform the Iraqi economy?
Almost half a year has passed since al-Zaydi took office, and the Iraqi economy has not witnessed a clear program based on a specific economic theory or system that would reassure the citizen, the investor, and foreign capital. All government actions are reactions and scattered, uncontrolled daily administrative procedures that are not governed by a specific strategy. Therefore, al-Zaydi’s government is an extension of previous governments in spreading the influence of corruption and economic dysfunction across Iraq and its people.
I fear that al-Zaidi will resemble his predecessors, and I fear that his government will not be different from its predecessors, and that it will not be able to bear the burdens of Iraq, and I fear that the Iraqi people will be ruled by something similar to the Syrian regime, if al-Zaidi fails.
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