Iraqi deputy PM says economy faces ‘existential crisis’

Iraqi deputy PM says economy faces ‘existential crisis’

Iraq's economy is so riddled with corruption that minor border post jobs are changing hands for as much as $100,000, Iraq's deputy prime minister, Ali Allawi, has admitted.

In an extraordinarily frank speech about his government's efforts to introduce reforms, he said there were no quick wins, adding the economy would probably remain in “existential crisis so long as oil does not reach $70 a barrel for a sustained period” and called for cuts in public spending as its revenues fall short.

Allawi said only a tenth of the $8bn due annually to the Iraqi treasury arrived from border customs, in contrast to Jordan, where 97% was received. He said border customs “are riddled with corruption to the point where minor clerks' jobs in some outposts change there for $50,000 to $100,000 and sometimes it goes up to multiples of that.”

He likened Iraq's situation to the coming of the dry season at a lake in Africa “where the fish become more frenzied as the oxygen levels reduce […] many of these people did not know how to extract rent from this dwindling pool.”

The new government of Mustafa al-Kadhimi, in which Allawi is also finance minister, came to power in May following extended