US dolllars, Iranian rials and Iraqi dinars shown at an Iraqi currency exchange (Credit: Essam al-Sudani, Reuters, 2018).
Iraq devalued its currency by more than 20 percent on Saturday. A US dollar now exchanges for 1460 Iraqi dinars, after trading at 1182 dinars just the day before. It was the first devaluation for Iraq’s currency since 2003 in the wake of the downfall of Saddam Hussein’s regime.
As the world’s third largest exporter of oil, Iraq has been especially hard-hit by the sharp drop in oil prices in 2020 resulting from a drop in demand due to the coronavirus pandemic. The International Monetary Fund (IMF) expects Iraq’s economy to contract at least 12 percent by the end of the year, a key indicator of the OPEC nation’s dire economic situation. Iraq’s government recently requested billions in upfront cash payments for new oil contracts, as thousands of government employees have gone with little or no salary for months, despite record deficit spending.
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FAI has teams on the ground throughout Kurdistan, partnering with authorities and residents for medical care, education, aid distribution and more.
Baghdad’s economic austerity has directly impacted the autonomous Kurdistan region in the north, where a legal arrangement between Kurdish and Iraqi authorities allows the central government to sell Kurdish oil internationally in return for payouts that finance the Kurdistan Regional Government (KRG). Market downturns and persistent corruption have emptied coffers and delayed payments, meaning that Kurdish teachers, health care workers, law enforcement and other government employees have gone without pay, creating a powder keg of public sentiment which has overflowed in recent weeks.
We ask the global FAI family to make intercession on behalf of the people of Iraqi Kurdistan and Greater Iraq as the combined effects of COVID-19, oil prices and graft continue to sap the economy and place the lives of its citizens at risk. We pray for the Kurdish family living nearby one of our field team leaders in which two siblings are teachers and currently unpaid, while another is recovering from major surgery, forcing the family to choose between buying food and medication. We pray for success in ongoing negotiations between Baghdad and Erbil for oil revenue that is needed by Kurdistan’s government. We pray for the Lord to restrain foreign states and organizations from infiltrating Kurdistan and fomenting unrest. And as always, we pray that upheaval and uncertainty in the communities in which we live and serve would open new doors for Good News of great joy during this difficult Christmas season.
Maranatha.
