Iraq working on reform package to cut oil revenue dependence, PM's adviser says

BAGHDAD, Iraq — Iraq's government is preparing a comprehensive reform package aimed at reducing the economy's vulnerability to oil price swings, the prime minister's economic adviser, Mazhar Mohammed Salih, said. Salih said public revenues and the state budget remain directly exposed to fluctuations in crude prices and production levels, making the diversification of income sources one of the most urgent policy files. The package focuses on expanding non-oil revenue by improving tax and customs administration, stepping up the fight against smuggling and broadening the use of electronic payments, he added. He pointed to the banking sector as central to diversification, calling for restructuring state-owned banks, strengthening oversight and channeling financing toward small and medium-sized enterprises. The adviser also said private-sector potential in agriculture, industry, transport, services, tourism, communications and energy needs to be unlocked by addressing infrastructure, financing and bureaucratic bottlenecks. In the energy sector, Salih said developing associated gas and domestic natural gas resources would ease pressure on foreign currency reserves and the budget. He stressed the need to cap current spending to preserve fiscal discipline and to channel oil revenues from short-term consumption toward long-term productive investment, adding that steady implementation is essential if diversification is to take hold.