Sudani's warning on 'socialist mentality' draws debate in Iraq

BAGHDAD, Iraq — Prime Minister Mohammed Shia al-Sudani’s warning that Iraq needs to move away from a “socialist mentality” has prompted debate over the country’s economic model. Analysts say Iraq is neither socialist nor capitalist, but instead relies heavily on a rentier economy built on oil revenues. Iraq exports millions of barrels of oil a day and brings in high budget revenue, yet it continues to face crumbling infrastructure, chronic electricity and water shortages, and serious gaps in the health sector. Oil income accounts for 90% to 95% of the state budget, while the contribution of agriculture and industry is described as almost negligible. Despite the Tigris and Euphrates rivers and fertile farmland, Iraq imports more than 80% of its food from neighboring countries. The country’s Central Bank holds foreign currency reserves of more than $100 billion, but exchange-rate swings in the open market and a wide gap between the official rate and the parallel market continue to persist.