The International Monetary Fund announced in July that it has approved a three-year, $5.34 billion loan for Iraq under the Stand-By Arrangement facility, which it said was focused on “implementing economic and financial policies to help the country cope with lower oil prices and ensure debt sustainability.” The promised financial assistance was made conditional on—among other things—Baghdad settling all debts to international oil companies (IOCs) without adding new debts. To satisfy that condition, this would require Iraq to allocate a big chunk of its oil exports to paying IOCs at the expense of revenues to the treasury. In the current dysfunctional political system in Iraq and the low accountability among its political class, the first victim of this arrangement will be Iraq’s oil market share where it faces fierce competition from Iran and Saudi Arabia.
Continue reading Iraq’s Shrinking Revenues, the I.M.F and the oil dilemma