ERBIL, Kurdistan Region - The Iraqi parliament has approved a resolution that allows the government to apply for external and internal loans in an official parliamentary session on Wednesday, state media has reported.
The session was attended by 168 MPs, according to the state media outlet Iraqi News Agency.
The Iraqi government sent an official request to parliament last week to grant Mustafa al-Kadhimi’s cabinet the power to apply for loans in order to cope with the economic crisis brought on by the drop in oil prices and the coronavirus pandemic that has emptied the government coffers.
Parliament had to negotiate to be able to vote on the resolution, with senior parliamentarians objecting to the proposal based on previous financial records.
“The rejection last week was based on two points: the first being the accumulation of the large amount of loans by the Iraqi government. The second is that there is no clear strategy by the Iraqi government to reduce the accumulated loans and increase the internal revenues of the state,” Jamal Kochar, an MP in the Iraqi parliament told Rudaw Radio on Thursday.
In 2019 the parliament passed a resolution to bar the government from obtaining external loans.
Iraq’s government is hoping to receive loans from the World Bank to survive the current financial crunch, Finance Minister Ali al-Allawi told state media on June 7.
The government decided earlier this month to scrap plans to hash out its 2020 budget and will instead focus on formulating a budget for 2021, due to the high deficit in the budget due to crashing oil revenues.
