The Washington Post reports: Some Iraqi officials refer to it as “the gap,” and it is becoming as pressing a concern as the fight against the Islamic State.
Each month, Iraq’s government pays out nearly $4 billion in salaries and pensions to the military and a bloated array of public-sector workers. But with more than 90 percent of government revenue coming from oil, it is bringing in only about half that as crude prices plunge.
The United States is stepping in to try to make sure the country can continue military spending while it seeks international loans and embarks on an austerity plan. Still, some Iraqi officials and analysts say the government might struggle later this year to pay the 7 million people on the public payroll, which could trigger mass unrest.
With oil prices hovering around $30 a barrel, the entire region is being forced to cut budgets, reduce state handouts and make other painful adjustments. But for Iraq, the decline comes in the midst of an already destabilizing war. There are bills for reconstructing flattened cities and assistance for 3.3 million Iraqis who have been internally displaced over the past two years, with more expected to come. [Continue reading…]