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Iraqi Cabinet approves budget reforms

After failing to agree on a federal budget for 2014, Iraq’s Cabinet has finally approved and submitted its 2015 budget to parliament with an announcement to enact austerity plans.
Iraq's Finance Minister Hoshiyar Zebari speaks during an interview with Reuters in Baghdad November 26, 2014. Zebari called for deep-rooted reforms to stamp out corruption in a military that collapsed in the face of an Islamic State advance, as he prepares to spend nearly a quarter of the 2015 budget on defence. Picture taken November 26, 2014.  REUTERS/Thaier Al-Sudani (IRAQ - Tags: BUSINESS POLITICS MILITARY CIVIL UNREST) - RTR4FT0T

On Dec. 23, Iraq's Cabinet approved and submitted the 2015 federal budget to parliament. This development occurred following months of study to review and reduce the initial budget’s large deficit, which Finance Minister Hoshyar Zebari estimated at $40 billion.

Iraq’s government has certainly tried to address the deficit in the version that was approved on Dec. 23, in which the budget reached 123 trillion Iraqi dinars (nearly $100 billion). Yet, in the end, all of these attempts cannot address Iraq’s budget crisis for 2015 or the following years, given the nature of the Iraqi economy, which mainly depends on oil production, as well as the ongoing failure to achieve alternative economic mechanisms.

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