🔶 Iran’s war has brought Iraq face a liquidity crisis

Although ordinary Iraqis may live thousands of kilometers away from the Strait of Hormuz, the blocking of this international waterway is making life increasingly difficult for many of them.

For about three months, the salary of Mahmoud Waleed has been paid with an increasing delay each time. This 38-year-old teacher receives his salary from Iraq’s Ministry of Education, but because Iraq cannot export enough oil through the Strait of Hormuz, the government has faced a liquidity shortage. As a result, the salaries of thousands of Iraqis like Waleed are not being paid on time.

An Iraqi citizen from Mosul, who tells Deutsche Welle, says: “Delays in paying salaries have a big impact on your life. Like most people, in addition to the initial cost of living, we also have other financial obligations. Every day we reach the conclusion that we have to reduce our expenses and set aside some money for emergencies—at least until things return to normal. This situation really makes people anxious and worried.”

Ahmed, a doctor from the same city who, for personal reasons, did not want to give his full name to Deutsche Welle, adds: “The future seems even more uncertain. This month, our salaries were paid more than 10 days late. The Minister of Health explained that the government does not have sufficient liquidity and that the delay was for this reason. But we really don’t know how long the next delay will last.”

In early August, several small protests were held to protest delayed salary payments. University staff across the country, as well as employees of the Ministry of Electricity, staged protests.

Almost the entire national budget of Iraq—something between 85 and 90 percent—is funded by oil exports. At the same time, Iraq has a broad and growing public sector, and about two-thirds of nearly 30 million Iraqis of working age depend on the government to make a living.