The IMF now forecasts that Iraq’s GDP will have contracted by 12% in 2020, the worst of any OPEC member, though all are affected by production quota cuts. The Iraqi government, in some desperation, is trying to sell a long-term crude oil supply contract for an up-front fraction of future revenues, $2 billion, to pay operating expenses of government – instead of depositing $1.5 billion in oil revenues with a China state investment bank and receiving $10 billion in infrastructure credits! And its Central Bank just devalued the dinar by approximately 20% at once, to 1450/dollar from 1,190/dollar.
Iraq again has popular demonstrations, but with a critical difference. This time, some of the demonstrations are explicitly for the unlocking of the China-Iraq oil-for-technology agreement of 2019, the implementation of which has been blocked by the current government; and for the Faw port development project not to be an isolated contract, but an aspect of rebuilding of Iraq’s destroyed infrastructure as a whole. These demonstrations, petitions, online groups, and other mobilizations, in which the Schiller Institute has been involved and the Swedish Belt and Road Institute, have succeeded in attaining the formation of a national commission to weigh the alternatives. These are, in particular, the China-Iraq agreement; and the contrary proposal from the government for a turn to the “international capital markets” to get a loan (with interest penalties) and give a Faw port contract to the Korean Daiwoo engineering firm.
