December 21, 2004: Iraqi Finance Minister Discusses Plans to Implement Neoliberal Economic Reforms

Top Iraqi officials head to Washington for the second meeting of the Iraq-US Joint Economic Commission. The first meeting took place in September. At a press conference, Iraqi Finance Minister Adil Abdel Mahdi tells reporters that the new Iraqi government is implementing, or intends to implement, a number of major changes to the country’s economy. Some of the reforms he mentions would be part of a new oil law that will be “open to investment, to foreign investment downstream, maybe even upstream.” He explains that the law is being developed by a “high-ranked official from the Oil Ministry” in consultation with “his counterparts and with agencies here in the States.” Mahdi also says that Iraq will review the oil contracts that Saddam Hussein had inked with countries like France and Russia. “So I think this is very promising to the American investors and to American enterprises, certainly to oil companies,” he says. Mahdi also defends an agreement the Iraqi government recently made with the IMF to implement certain reforms, which included an end to food subsidies (see September 29, 2004). “I think this is a necessity for the Iraqi economy,” Mahdi says. “We really need to work on our subsidy side. Subsidies are taking almost 60 percent of our budget. So this is something we have to work on… Other measures really were a real necessity for the Iraqi economy before becoming conditions asked by the IMF.” But as Inter Press Service notes, Iraq’s food subsidies system “have kept millions of Iraqis from starvation under US and UK-pressed sanctions imposed by the United Nations after the 1991 Gulf War.… It is believed that many more Iraqis would have died if not for Hussein’s strong subsidies system that gave food to Iraqi families.” An issue that is apparently not discussed during the two-day meeting between US and Iraqi officials is the large amount of money that is known to have been defrauded from the CPA. In response to a reporter’s question, Mahdi says only, “No, this issue has not been discussed. We are interested to follow such issues, of course. Whatever concerns corruption or money, we are interested.” [US Department of State, 12/21/2004; Inter Press Service, 12/24/2004]