BAGHDAD — Noura al-Bajari, a member of the Iraqi parliament's Economy and Investment Committee, expressed fear in a press statement Aug. 8 that Iraq will be unable to pay off its debts. She cited dropping prices for the oil upon which the country relies and the costs of the war against the Islamic State, with which the government has fought for control of Iraqi cities since June 2014.

In an interview with the local Iraqi Al-Mada Press, Bajari predicted a very bad scenario for the Iraqi economy should debts remain outstanding. “Iraq would have to face dire economic conditions akin to the prior-2003 period, when the accumulated debt had reached $125 billion,” she said.

Bajari’s apprehension seems justified, especially since the Iraqi government has resorted to domestic and foreign borrowing to be able to bridge the spending deficit as oil prices started to plummet in the summer of 2014. Of note, Iraq depends almost exclusively on oil revenues to finance state spending, and there are no official statistics available on the current size of the debt.

Iraq’s Central Bank has been trying to employ a policy of financial transparency by publishing data on spending, debt and the country’s financial status online. However, the website only displays basic information from 2010 that is not sufficient to gauge the actual size of outstanding debt since the fall in oil prices in 2014.