Iraq’s new finance minister will face many challenges: former minister

<p style="text-align: left;">Iraqi Federal finance minister Fuad Hussein addressed the ongoing government formation process and the budget dispute between Baghdad and Erbil during an interview on Friday night, May 1, saying that the next finance minister will have a war on their hands addressing the financial challenges facing Iraq.

Speaking to Iraqi television channel al-Sharqiya, Hussein said the next finance minister would have limited weapons to deal with the economic fallout of slumping oil prices, the global coronavirus pandemic, and local budget disputes.

In April, Iraq exported 3.438 million barrels of oil per day, but at the shockingly low price of $13.80. As a result, it only took in $1.42 billion, or less than half of the previous month&rsquo;s total. Oil prices dropped precipitously over the last several weeks because of market oversupply and slumping demand.

Iraq depends on oil exports for more than 90 percent of its budget, meaning that its budget is certain to take a hit as a result, NRT reported.

Hussein said that the decision to freeze budget transfers to the Kurdistan Regional Government (KRG) was punishment for Erbil&rsquo;s refusal to send oil for export, but added that ultimate responsibility for the decision lay with himself as finance minister, rather than the Council of Ministers&rsquo; General Secretariat, the head of which signed the letter authorizing the freeze.

Last week, Baghdad&rsquo;s patience with Erbil&rsquo;s recalcitrance ran out, fifteen months after the 2019 budget law passed the Council of Representatives, and it stopped all payments to the KRG. As a result, the KRG is facing a major cash shortage and will likely have difficulty making payroll.

The most recent leaked list of potential names for Prime Minister-designate Mustafa al-Kadhimi&rsquo;s cabinet did not contain a nominee for finance minister.

Hussein is a member of the Kurdistan Democratic Party (KDP) and the new nominee is expected to be a Kurd as well, with the Region&rsquo;s parties pushing to have final say over who is selected.

Reporter&rsquo;s code: 50101

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