Iraqis have no credibility at all

Rizgar Khoshnaw | Exclusive to iKurd.net

In this article, I am only going to focus on finance and economics and will not get into how unqualified Iraqis are in other areas.

The whole world knows by now it is impossible to deal with Iraq no matter what issues are discussed as they are extremely unprofessional and lack any honesty and credibility.

Iraqis will say anything and pretend to know it all, when in fact they know nothing.

On August 16, 2015, I published an article titled ” Why does the Iraqi government employs corrupt, unqualified and unprofessional personnel?” and in this article, I discussed the issue of oil prices and what the Iraqi oil minister, Mr. Adel Abdul Mahdi, says in this regards.

On the day that I published the article, oil was selling at $54 a barrel and I said that this price will not be sustained at the current level and the price will decline to under $40 shortly.

At the same time, the Iraqi oil minister, Mr. Mahdi, had said in his interview in Vienna, Austria, that the price oil oil will be over $70 a barrel by year’s end!

Interestingly, during an interview yesterday with Assabah newspaper Mr. Mahdi said, ” There is big hope that in the first half or by the end of next year, oil prices will rebound” Now, Mr. Mahdi is “hoping” and not as confident as he was in his interview in Vienna four months ago! Bottom line, Iraqi politicians are have no clue what they are doing and not qualified to administer the government in any shape or way and that is why Iraq is ranked in lowest in the world in everything.

Today, the price of oil is under $35 a barrel! Where did Mr. Mahdi come up with the figure of over $70 a barrel from? What prompt him to say such thing? I do not think anyone has the answer to this question, not even Mr. Mahdi himself!

The Iraqi budget for 2016 has been determined, and agreed on, and will have a $25 Billion deficit, taken into account that the price of oil to be set at approximately $50 a Barrel. As of today, the price of oil is actually 30% less than what the Iraqi government is counting on.

What will the Iraqi government do when they face a $40- $50 Billion deficit instead of $25 Billion? Two days ago, the Iraqi government borrowed $1.2 Billion from IMF and how far will this measly $1.2 Billion go? Of course, this $1.2 Billion of borrowed money will find its way in to the pockets of the Iraqi “politicians” and not the public. Iraq needs an additional $30 Billion a year in order to stay afloat and no way any country or lending institution will lend Iraq such huge amounts.

Of course the Kurdistan Regional Government (KRG) is not immune to such drop in oil prices as they too have suffered tremendously. The continuous drop in price of oil has caused foreign oil companies to see a huge drop in their expenditures in Kurdistan operations and the precipitates drop in their stock.

Take for example, Genel Energy and Gulf Keystone has seen their stock drop by a staggering 97%-98% each since their high! This surly spells serious troubles for them and their operations now and in the near future.

Even thought the price of oil is under $35 a barrel today, I am still very convinced that the price of crude oil will continue to decline. Very soon, and after the lifting of sanctions on Iran, we will see an additional a million barrel of oil a day enter the market. This will add more down side pressure on oil prices internationally.

Furthermore, the US is now has almost half a billion barrel of oil in inventory, a level not see in 80 years, and more oil coming to the market will surly cause a further decline in oil prices.

It is time to face the fact and began to plan on having oil prices hovering around $30 a barrel for a good while.

Rizgar Xoshnaw, a senior Kurdish writer based in Washington, a longtime contributing writer and columnist for iKurd.net.

The opinions are those of the writer and do not necessarily represent the views of iKurd.net or its editors.