Note from the Author

The collapse of Iraq’s public loan program is another glaring example of a government that serves the wealthy and powerful rather than its citizens. Billions intended for infrastructure, energy, and public services were siphoned off by contractors and businessmen with little oversight, no accountability, and minimal consequences. Ordinary Iraqis bear the cost while influential actors profit, leaving critical services crippled and the economy stagnating.

This is the predictable outcome of a state captured by corruption, sectarian favoritism, and militia influence. When governance is weak and law enforcement selective, public funds are looted with impunity, projects fail, and citizens are left to struggle amid chronic poverty and inadequate infrastructure. The state has failed to enforce transparency, financial oversight, or accountability — proving that Iraq’s institutions exist to serve elites, not the people.

Article:

The loans — intended to fuel investment in infrastructure, energy, and public services — were issued to businessmen and large contractors with little effective oversight, and many recipients failed to repay them at all. At least one high‑profile loan of about $1.2 billion for a power plant project remains unpaid, while others totaling hundreds of millions of dinars were withdrawn with no clear accountability.

Investigators found inflated project costs, missing financial guarantees, and a lack of documented revenue details, meaning funds were often paid out without proper monitoring or proof of work completed. Regulators say this has contributed to Iraq’s stalled economic development, weakened public services, and chronic budget shortfalls.

The failed loans programme exemplifies how corruption has penetrated Iraq’s financial system, allowing influential companies and actors to extract state funds and leave taxpayers bearing the cost.

With Iraq’s economy still heavily dependent on oil revenues, the inability to recoup billions in public loans underscores a failure of governance and accountability that continues to erode trust in state institutions. Experts warn that without meaningful reforms to lending practices and anti‑corruption enforcement, Iraq’s fiscal vulnerabilities will deepen, hampering development and fueling public frustration.