Economic collapse vs. constitutional rights: Iraq's oil revenue dilemma

Shafaq News/ A growing demand for direct pay-outs from Iraq’s oil revenues has sparked lawsuits and warnings from economists, with one expert cautioning that such a move could push the country to the brink of bankruptcy within a year.

Economic expert Nabil Al-Marsoumi estimated Iraq’s 2024 oil revenues at $90 billion, while non-oil revenues stand at just $13 billion, barely enough to cover government spending on electricity, gas, and food rations.

He warned that using oil revenues for direct cash payments would deplete central bank reserves, forcing the government to borrow or print money to cover salaries and social benefits, which cost $70 billion annually.

This, he cautioned, would trigger hyperinflation, send the Iraqi dinar into freefall, and push the economy into crisis within a year. Even distributing half of the oil revenues, he argued, would only delay the collapse by two years.

His remarks come as dozens of Iraqis file lawsuits in appellate courts, citing Article 111 of the constitution, which asserts that "oil and gas belong to all the people of Iraq in all regions and governorates."

Legal experts argue that managing national wealth through public services, rather than direct cash pay-outs, is a more common global approach and raises complex legal questions in this case.

Supporters of the lawsuits see them as a response to growing frustration over how successive governments have managed Iraq’s resources. Some are considering joining the legal action if it gains momentum.