Terzi Warns Iraq Budget Could Turn into a Wage Bill Within Five Years

Former lawmaker Fevzi Ekrem Terzi said Iraq is heading into a serious fiscal crisis and warned that, under the current trajectory, the federal budget could become little more than a structure dedicated to salary payments within five years. He said uncontrolled election-linked hiring is widening the problem by crowding out real economic measures needed to reduce unemployment among young people and graduates. Terzi said the state is already financing a broad population that includes about 5 million employees, pensioners and people receiving social assistance. He estimated that 70 to 75 percent of the budget goes to salaries and operating expenses. He stressed that Iraq remains almost entirely dependent on oil, making public finances vulnerable to any decline in petroleum revenue. Such a drop, he said, could unsettle the state budget and increase pressure to borrow. To ease the crisis, Terzi called for stronger support for the private sector, the opening of investment, and a restructuring of public employment policy.